How to Choose a Co-Founder

When we think of entrepreneurship we tend to think of famous entrepreneurs.

Elon. Steve Jobs. Oprah. Mark Zuckerberg. Richard Branson. Jack Ma. Sara Blakely.

Can you think of any companies with co-founders?

It’s more than you might think.

 

Prominent Companies Started by Co-Founders

  • Airbnb
  • Alibaba Group
  • Apple
  • Baidu
  • Ben & Jerry’s
  • Birchbox
  • DropBox
  • Facebook
  • Google
  • Hewlett-Packard
  • Infosys
  • Instagram
  • Intel
  • Johnson & Johnson
  • Microsoft
  • Netflix
  • PayPal
  • Rent the Runway
  • Skype
  • Snapchat
  • Sony
  • Spotify
  • Twitter
  •  YouTube

 

The Myth of the Solo Entrepreneur

We’re enamored with the myth of the solo entrepreneur, but in reality entrepreneurship is a team sport.

Entrepreneurship is a team sport.

It’s hard to know exactly what percentage of companies are started by solo entrepreneurs versus co-founders. Researcher Dr. Lerong He, writing in the Journal of Business Venturing, estimates that 50-70 percent of new firms are started by partners (more than one founder). Of the top 20 Y Combinator startups (in terms of valuation) recently, all of them have at least two founders.

When I taught entrepreneurship at the Stockholm School of Entrepreneurship, I used to enjoy asking my students if they knew what the following startups had in common: Birchbox, Bright Horizons, Dropbox, Google, HP, Rent the Runway, SoundCloud, and Yahoo? Any guesses?

Their co-founders were all classmates. If you’re in school, part of your job is to study and learn and pass your exams. Another part of your job is to meet interesting people that may become great friends or, who knows, partners.

 

The Critical Co-Founder Decision

Choosing your co-founder(s) is clearly one of the most important decisions you’ll make. Yet many people overlook it. And then it comes back to bite them.

Many have likened the co-founder relationship to a marriage, with all the time spent together, the pressures, the importance, and more. Too often, it devolves into blaming and mistrust. And sometimes into a painful divorce (and one that can destroy the venture).

“The moment of truth is when you ask, ‘Are these the people I want to be in trouble with for the next five, ten, fifteen years of my life?’ Because as you build a new business, one thing’s for sure: You’ll get into trouble.”John Doerr, Kleiner Perkins

How to Pick Co-Founders

In his article, “How to Pick a Co-founder,” entrepreneur Michael Fertik outlines ten helpful criteria for choosing a co-founder:

  1. Complementary temperament
  2. Different operational skills
  3. Similar work habits
  4. Self-sufficiency
  5. History of working together
  6. Emotional buoyancy
  7. Total honesty
  8. Comfort in own skin
  9. A personality you like
  10. The same overall vision

That’s a great list, and I’d underline a few—history of working together, emotional buoyancy, total honesty, and comfort in own skin—as being especially important.

 

What to Probe For

I’d also add eight things to probe for when considering someone as a potential co-founder:

1. Integrity. Fertik mentions total honesty, but integrity goes beyond that. It includes a strong moral compass, a commitment to ethical decisions and actions (”doing the right thing, even when it’s costly or hard,” as we defined it in Triple Crown Leadership: Building Excellent, Ethical, and Enduring Organizations), and the sense of wholeness that comes from knowing who you are, embracing that, and not living a divided life. 

2. Affinity. Do you like her? Are you energized by her, or drained? Do you resonate with her?

3. Admiration. Is this a person you look up to, at least in some ways? Someone who can bring out the best in you and help make you better?

4. Culture. Do you agree on the type of organizational culture you’d like to build? Have you talked about it, and are you in sync about this critical piece (one that many startups overlook, at their peril)?

5. Commitment. Given the level of risk you’ll be taking on together with a new venture in brutal conditions of time pressure, resource constraints, uncertainty, and chaos, are you certain that this person is fully committed to this venture? And do you have evidence of this in their actions and investments, not just their words?

6. Emotional intelligence. Can he recognize and understand emotions in himself and others? And can he use that awareness effectively to manage his relationships and actions? Does he have emotional blind spots or triggers that get the best of him?

7. Different experience and outlook. You don’t need a clone. You need someone who comes from a different vantage point, with a different background, and with a different viewpoint on things. This will cause some confusion and conflict, but if you can manage through it you’ll end up making much better decisions in the long run.

8. Head and heart.” In Triple Crown Leadership we noted that most people tend to focus on “head” characteristics (like knowledge, skills, technical competence, and intelligence) when evaluating people, while ignoring “heart” characteristics (like courage, passion, resilience, and authenticity). The latter can be just as important, and sometimes even more so—especially when you’re under fire together.

“My biggest mistake is probably weighing too much on someone’s talent and not someone’s personality. I think it matters whether someone has a good heart…. Starting and growing a business is as much about the innovation, drive, and determination of the people behind it as the product they sell.”Elon Musk

 

Helpful Assessments

It can be hard to know a lot about someone before working closely with them over time. Sometimes assessments can provide more information as you explore complementarity and fit. Some examples:

Of course, assessments have their limitations.

The best way to vet this is to work with someone intensively under challenging conditions. Then you can really get a sense of how well you work together, your trust levels, and how well you work through challenges and conflict.

Bottom line: Look before you leap, and choose wisely. You’ll be very glad you did.

 

Reflection Questions

  • How much scrutiny do you use in assessing co-founders?
  • What’s your process, and how might it be improved?
  • What are you looking for?

 

Articles on Co-Founders

Videos on Co-Founders

 

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Gregg Vanourek is a writer, teacher, speaker, and coach on personal and leadership development. He is co-author of three books, including LIFE Entrepreneurs: Ordinary People Creating Extraordinary Lives (a manifesto for integrating our life and work with purpose and passion) and Triple Crown Leadership: Building Excellent, Ethical, and Enduring Organizations (called “the best book on leadership since Good to Great“). Take Gregg’s Traps Test (Common Traps of Living), check out his Best Articles, get his newsletter, or watch his TEDx talk. If you found value in this article, please forward it to a friend. Every little bit helps!

Founder-Venture Fit for Entrepreneurs

With startups, many people focus on what entrepreneur and investor Marc Andreessen calls “product/market fit”: “being in a good market with a product that can satisfy that market.” It’s a great point, and too many ventures fail or founder because they never find it.

But not nearly enough attention is paid to what I call “founder-venture fit”: when the venture matches well with the founder’s (or co-founders’) knowledge, strengths, passions, and values. Some have written about similar ideas—“founder-market fit” or “founder fit”—but too many aspiring entrepreneurs miss this critical point.

Serial entrepreneur and investor Brad Feld wrote: “I’ve come to believe that—especially among first time entrepreneurs—founder market fit is much more important than product market fit at the inception of the company.”

 

Examples of Founder-Venture Fit

When we survey the startup landscape, we see founder/venture fit in spades:

We see it with Elon Musk, who grew up fascinated by technology and physics, learned to think deeply about “first principles,” and became unsettled by dark scenarios about the planet’s future without bold action, big bets, and breathtaking innovation. Looking back, he said, “I really was thinking about this stuff in college…. I like to make technologies real that I think are important for the future and useful in some sort of way.”

We see it at Spotify, where co-founder Daniel Ek combined his two passions growing up (music and technology).

We see it with Oprah Winfrey, who found a brilliant and personal way to “Turn your wounds into wisdom,” as she says.

We see it with Virgin’s Richard Branson, who exudes personality and fun in all his endeavors.

We see it at GoPro with founder Nick Woodman’s love of adventure and entertainment: “It comes down to how much authentic passion you have for something.”

We see it at Patagonia with Yvon Chouinard’s background in rock climbing and environmentalism. At Patagonia, they “use business to inspire and implement solutions to the environmental crisis.”

Thinking back about his early days with Paul Allen at Microsoft, Bill Gates mused, “We just loved writing software.”

So what are we to make of this? Tech entrepreneur and investor Chris Dixon notes that “founder/market fit can be developed through experience: No one is born with knowledge of the education market, online advertising, or clean energy technologies. You can learn about these markets by building test projects, working at relevant companies, or simply doing extensive research.”

He adds this important note as well: “founders should realize that a startup is an endeavor that generally lasts many years. You should fit your market not only because you understand it, but because you love it — and will continue to love it as your product and market change over time.”

And how do we gauge whether we (or others) have it? James Currier from NFX, a seed-stage venture firm, identified4 Signs of Founder-Venture Fit”:

  1. Obsession: he counsels founders, “don’t start a company unless you can’t not do it… unless you can’t sleep at night and your brain is exploding with the idea.”
  2. Founder Story: a compelling “why” inside the founder that resonates with the venture’s target customers.
  3. Personality: a nature and set of interests that resonates with peers and customers.
  4. Experience: knowledge and experience can surely help, but he notes that “too much experience is not always a good thing. Certainly, we do look for founders who have enough industry experience that they understand the market. But not so much experience that they don’t have any disruption left in them…. Too much knowledge is a blocker to innovation.”

Too many aspiring entrepreneurs want to be founders for reasons that may not serve them well or stand the test of time—reasons like a desire for recognition or fame.

Entrepreneurship isn’t for the faint of heart. For many, it will require an obscene amount of commitment, persistence, and resilience—the kinds that usually flow from a true sense of purpose, calling, and conviction. Do you burn for this idea, for this cause, for this opportunity to generate value and have impact?

The entrepreneurial path is both exhilarating and exasperating. You’re wise to find a great founder-venture fit at the outset.

 

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Gregg Vanourek is a writer, teacher, speaker, and coach on personal and leadership development. He is co-author of three books, including LIFE Entrepreneurs: Ordinary People Creating Extraordinary Lives (a manifesto for integrating our life and work with purpose and passion) and Triple Crown Leadership: Building Excellent, Ethical, and Enduring Organizations (called “the best book on leadership since Good to Great“). Take Gregg’s Traps Test (Common Traps of Living), check out his Best Articles, get his newsletter, or watch his TEDx talk. If you found value in this article, please forward it to a friend. Every little bit helps!