Bill Gates & Paul Allen, Steve Jobs & Steve Woz, You & ??
From my article originally published in The Entrepreneur (newsletter of the Entrepreneurship Cell, IIT Kharagpur), about selecting a co-founder for your dream venture, the way the top guns did it. I had earlier discussed The Power of the Duo in the series on Sramana Mitra and Dominique Trempont’s keynote address at Entrepreneurship Summit 2009, IIT Kharagpur.
They say choosing your spouse is the most important decision you will make in your life. Similarly, choosing your co-founder(s) is the most important decision you will make while building your startup, since one could argue that at least for some period of time, you’ll be spending more waking hours with your co-founder than your significant other. Great partnerships are like marriages, they need a lot of common ground, strong mutual attraction and a willingness to work hard – especially through the inevitable issues.
You first need to dispel the delusion that you don’t need a co-founder. You do. You may have all the requisite skills, but even then, co-founders help spread the work and make better decisions. Sure, you can talk to your brilliant self, but that’s not as effective. The selection of co-founder(s) is one of the key determinants of long-term success in a startup. But if you have the wrong guy, that’s a hard problem to get over with.
Knowing them beforehand
The idea is that by having gotten to know the person, you’ve already had a chance to see how they work, how they think and whether you’re likely to get along. This makes your college or workplace friend circle a very useful hunting ground for a potential business partner. Consider Chad Hurley, Steve Chen and Jawed Karim, for instance. Chen and Karim were classmates at the University of Illinois, who then met Hurley at PayPal, where all three were employees. They then founded YouTube, which received funding from Sequoia Capital, whose partner Roelof Botha, who also joined the YouTube board of directors, was the CFO of PayPal.
You better be good friends with them as well, since you’re going to spend a lot of time working together. Also, there will be times in the startup lifetime that will test your relationship with your co-founder, so make sure you understand the stakes before going in.
Someone you can trust
Mistrust can be a cancer for your startup. The good news is that you can avoid it by choosing a founder you trust, and then work to foster deeper trust in your relationship over time. Keep in mind that it’s a never ending process.
Play fair. You can’t expect others to care as much about the business when they don’t see themselves getting a fair share. This goes hand-in-hand with trust.
Great minds think alike
There should be aligned interest and commitment from your co-founder. You both have to (at some level) be committed to not only building a company, but the same company. If one of you wants to create a company you run forever (and reap profits) and the other wants to take a shot at a high-flying startup that gets sold or goes public some day, you’ll have a problem.
Of course, co-founders may influence each other’s decisions in this context. Afterall, Larry Page’s “BackRub” might just have remained a research project on citation backlinks in research papers, with limited commercial value, unless Sergey Brin, a fellow Stanford Ph.D. student and close friend, had not come to the rescue and worked with him to make it what we today know as Google.
Choose your compliment
A co-founder should be strong in areas you are not. A great compliment to your skills is someone who loves to do things you hate, someone who makes the sum of your parts greater than the whole. If Steve Wozniak had remained the nerd who was simply skeptical of the idea of selling computers, and had not been convinced by Steve Jobs, the born-entrepreneur, to come up with a company so that they could at least say that to their grandkids, neither would’ve conceived Apple Computers independently.
Make sure at least one of the founders has the technical expertise. This is so you don’t have to try and outsource the actual product development. Similarly, make sure at least one of you can sell. No great idea is of any use to a startup that can’t market it properly. Effectively, you need to identify your “type”, and look for the corresponding complementary skill in your partner.
Practice, not just preach
You need a co-founder who can get things done. If you have a great idea, and you want to bring it to life, find someone who is passionate about your vision, and who is willing to work for it. Since startups involve lots and lots of work (some fun, some not so fun), part of the value of your co-founder should be that the work can be distributed. If your co-founder is too “strategy” focused too early, you’ll get buried because there’s too much to do.
Passion is easy to spot. Years after the two had befriended each other at Lakeside School, Seattle, where they used to tweak the school’s scheduling program to place themselves in classes with more female students, and had faced several penalties for other naughty uses of their programming skills, one of them dropped out of Washington State University and called on the other (in Harvard then) to do the same, for starting a venture together. Both understood each others’ passion and immediately complied. They were Paul Allen and Bill gates, and thus was born, Microsoft.
Microsoft co-founders Bill Gates and Paul Allen, at 13 and 15 years of age respectively
Talk the talk
Have the hard discussions around equity, compensation and responsibilities early. This stuff does not get easier over time – it gets harder.
How should the division of shares be controlled? Who will make the decisions? What happens if one of us leaves the company? Can any of us be fired? By whom? For what reasons? What are our personal goals for the startup? Will this be the primary activity for each of us? What part of our plan are we each unwilling to change? Will any of us be investing cash in the company? If so, how is this treated? What will we pay ourselves? Who gets to change this in the future?
Deferring these conversations is a great way to ensure problems later.
So what are you waiting for? Step out and start looking.