A few weeks ago in one of our Community Office Hours with our COO Andrew Tibbitts, a sole founder asked for advice on what to do next. After an hour of talking the advice was seemingly simple; ‘find a co-founder.’
Conversations about co-founders spring up often at TechHub, since our space is buzzing with ideas that have the potential to be the next unicorn. When those ideas are in early stages it can be enough to have one person figuring it out, but as the product starts taking shape the sole founder usually finds themselves stretched and that's when the dreaded ‘do I need a co-founder?’ question arises. The simple answer to this question in most (but not all) cases is ‘yes, you do need a cofounder’ and here are the reasons why:
The financial reasons
VCs and investors try to avoid investing in solo founders
VCs overwhelmingly say that they try to avoid investing in solo founders and the ones they do are often serial entrepreneur with past success. It’s usually, one of two reasons:
1 - Statistically, a business with one founder is likelier to die
2 - If you are a sole founder and something happens to you the business is likely to die as you are the only person who knows every detail of it.
Split the early and out-of-office expenses
You will have early expenses, be it paying for a space to work from, or hiring freelancers. In the earlier days when all you have is an idea and a few sketches it’s usually too soon for external investment so a lot of the first expenses will be coming out of your own pocket. Two pockets are always better than one.
The practical reasons
Divide and conquer
No matter how productive or how driven you are still human and there are only 24 hours in a day and 7 days in a week. You still have to sleep, eat, and sometimes dedicate time to friends, partners, families and possibly children. There is only so much time and so much one human can do before they start alienating their loved ones and burning out; having two people working on the company can get so much more done in the same amount of time. Are you concerned about giving up equity? Don’t be. Would you rather own 50 percent of something or 100 percent of nothing?
A different opinion
As amazing as it is to always have people agree with you it’s not always great for your business. It's incredibly important to hear a different perspective from time to time that comes from someone who knows the business just as well as you do, and that person can only be a co-founder.
The emotional health reasons
You are not alone
Being a founder is not just stressful, it’s also lonely. It doesn’t matter how many loved ones you have, or how close you are with a partner, they will never fully relate or understand what you and your business are going through. They may also not want your only conversation to be about work after a tough day at the office. As a solo entrepreneur you’ll definitely feel alone, so put yourself in a situation to share the stress with someone that you’re working with every day.
Get a co-founder but be smart
You will occasionally come across an article or a forum post that talks about how a co-founder relationship went sour and destroyed the company. Yes, these things happen, however, this is essentially the business equivalent of that friend who swears off love every time they come out of a relationship. That one wasn’t right, but another one can be.
Most importantly there are ways of protecting yourself and your company from a relationship that goes sour. It’s essential to create a contract that underlines what your and your co-founder's expectations are, and what are the consequences if they are not met, which should include the measure of taking back the shares and firing the co-founder. Relying on trust and your friendship is not enough.
So you know you need a co-founder, what next? Go out and meet people. But before you do, just like in any hiring process, you should sit down and make a list of who and what you are searching for.
I want another me
A recruitment adviser who came in as part of our support programme recently mentioned that what sole founders usually tell her is ‘I need another one of me.’ To that, she usually shakes her head saying: ‘no, you need the opposite of you'. With someone the same as you, you could start fighting over who does the same tasks and could end up in a power struggle. You need someone who shares your values and goals, but who can complement your skill set, not replicate it.
Making and selling
Kent Teague, the Managing Partner of Gold Creek Capital, who recently spoke at Urbano Breakfast (link), pointed out that most early functions within a startup can be divided into:
1 - finding new customers and communicating the value of what you are doing to your early customers
2 - figuring out by testing and interviewing users how to make the product better
Some people call this division business/product, others tech/sales, makers/doers, Jobs/Wozniak. No matter what wording you choose for the pairing, the idea stays the same - the two founders cannot focus on the same aspect of the business as there will then be no business.
So figure out what you are best at - product or finding business opportunities, and then go find your opposite. Of course, this is easier said than done so best read one of these articles about how to find a co-founder.
Future reading about how to find a co-founder:
*There is a lot of literature on sole founders and VC’s, to our knowledge most if not all of it are opinion pieces that come from experience and rarely backed by numbers and research. Here are some examples of the literature that you can read to find out more.
An opinion piece from Paul Graham from Y-Combinator, Welcome To The Unicorn Club: Learning From Billion-Dollar Startups by Aileen Lee - only four ‘unicorn’ startups have sole founders, a Q&A from PROfounders Capital
If you want to get more diverse opinions about the issue it’s worth looking at this and this quora forums. As well as this Cofounderslab forum.
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