I have worked with over 30 early stage startups over the last two years and the first area the founders should look at is themselves. Hoping things will turn out OK is a sure-fire way of storing up problems for later, when it may really matter. If you can’t agree now, it’s best to find out sooner than later. If you are lucky enough to start making some money you will see how people suddenly change.
Here are a few pointers on where to dig. It is more than likely others will have differing options so please comment, politely!
The solo founder might think they are immune to many issues and they would largely be right. But it is a lonely path and you will still have arguments, except they will be with yourself. If you are out of action, the business is down. Time management, mentors and delegation will need to be mastered, but that goes for all founders anyway.
Tech-only founders? We’ll just hire a salesman to sell our stuff. No. One of you needs to grab the business development reins, like it or not. No-one will be able to sell it better than you. It will be painful at first but keep at it, as it is a skill which will serve you well. Resist the urge to tinker with the product, that’s your cofounder’s role. Talk to potential customers and get inside their skin. An advantage is that you know a few important facts; no software is ever “ready” or “bug free”, and you know you will re-write the whole damn thing a few times. These facts can be a horrible revelation for non-tech founders.
Business-only founders? We’ll hire a few devs or outsource the dev and she’ll be right. This is never as easy as it sounds. Communicating your requirements to someone sitting opposite you is hard enough, let alone in another country or via a third party. There will be misunderstandings, cost overruns, bugs, mysterious delays, features added you didn’t ask for, and features missing that you did ask for. Nothing is “obvious”. Start looking early and if you find someone good don’t be cheap. Delegate one of you to be the key interface to the developer. Learn how it works at a macro level. Ask a friendly developer to explain what technical debt is and how it will hurt unless paid off regularly.
What about other commitments? At the pointy end of a PhD? Visa expiring soon? Young family? Elderly parents? Long holidays planned and paid for? Getting married? Another business going well? Other professional demands on time? Unless you find out and plan for contingencies, these can bite hard. Big presentation next week? Oh I’ll be in Iceland – you’re on your own.
How supportive are your partners? You will be living and breathing this baby for the foreseeable future. It can get tiring for your partner. You will miss dinners and probably even forget birthdays. You may rely on them for providing for the family while you bootstrap. Are you both ready for that? Is your co-founder’s partner ready for that?
Oh and money. How much do you have saved? What is it for? Are all the founders coming to the table with the same amount? If not, what does that mean? What if a founder hits an unexpected rough patch? How long is everyone actually capable of having hardly any money, but also how long can you actually stand it? Do all the founders and their partners have the same tolerance of poverty?
Then there is dedication. Is this 100% all guns blazing death or glory? Or just something to give a go for a few months to see if it makes you a millionaire and look cool? How much do you all want it, and do you all want it the same amount? If you get offered your dream job, do you turn it down? Under what circumstances do you decide to call it quits?
Are the founders family or friends? On one hand this is positive. There is hopefully a level of trust and understanding of each other’s strengths, weaknesses and honesty. But are you up to telling your best mate that he is letting the side down, or telling your significant other to redo the presentation at 1am because it is crap and you need it by 9am?
What are your mindsets? If you are all type A’s or big picture thinkers then some things might slip through the cracks. But a good mix will mean some killer arguments about priorities.
What sort of experience is there? All founders need a good understanding of the startup toolkit – lean canvas, design thinking, whatever – and also some actual real life experience of the joy and horror of startup life. Coming from a closeted corporate world without the understanding of what you are in for can be a rude shock.
Do you like travelling and meeting people? You’d better. The startup needs you to move to London or San Francisco. Can you? Would you?
Are connections important? Certainly they can be useful especially if the founder is a well-known expert in their field. It can open doors and give credibility. But not at the expense of ensuring making sure that as many of the other attributes are there. Can they afford a huge pay drop? Are they comfortable talking to people they don’t know? Is their time really free enough to manage the demands of a startup?
How many founders is too many founders? Mathematically the more there are, the more likely one or more of the above bad scenarios will arise. Three at a pinch? Four plus? Will you ever decide on anything? What will you all do?
Finally a slew of adjectives that you should be able to all identify with. Organised. Expert. Enthusiastic. Pragmatic. Tireless. Humble. If you can see the antonyms of these in your proposed founder, beware. Chaotic. Dilettante. Dull. Perfectionist. Apathetic. Pretentious.
OK OK so what does a killer founder team look like? To be honest they are as rare as hen’s teeth, just as there is rarely a perfect startup idea. But it would be a mix of an experienced but pragmatic tech founder, with a charismatic and dogged business founder. Their vision and commitment are aligned, and they are blessed with patient and well paid partners. They have worked closely together in the past and already know how to have arguments without too much violence. They can tag team when one of them is down, and they both have deep and credible expertise in their domain.
Oh and of course they will have worked on, discussed and signed a fair co-founders agreement.
Have I missed anything? Disagree? Off you go then….