Having a co-founder startup might be a very good idea for the most because it divides responsibilities, expenses and brings in a fresh new perspective to the table. But finding a co-founder can be tricky. Cofounding a venture is very similar to entering into a marriage. Not only are you going to spend 12 to 14 hours a day together, you are going to mutually discuss and take several decisions which can potentially lead to disagreements. Disagreements are good, disharmony is not.
Here are 8 critical questions which you should ask before you finalize your startup co-founder.
Before you start reading, I must tell you that these questions are suggestive and must be taken with a pinch of salt. It is quite possible that you and your potential co-founder may gel really well, even if there is a mismatch on the below parameters, provided you both display exceptional levels of emotional intelligence and empathy towards each other.
So let’s get started.
1. Are you starting at similar financial levels?
A lot of times you may be tempted into venturing into a business with someone who is extremely sound financially. While you may think that this person will put in money when it matters, it may not always be so. On the other hand if you are starting up with someone who is in dire need of money, you may end up taking short-sighted and reckless decisions which are not beneficial in the long run. Generally, if one cofounder is more debt-ridden than the other, he/she can tend to be more restless.
The right kind of a partnership would be where both you and your co-founder are at similar financial levels, so that there is a similar kind of pressure on both of you. When it comes to sensitive subjects like reinvesting in the company or drawing money, these things matter.
2. Do you have similar upbringing?
Of course no two people can be the same. Even siblings who are born and brought up in the same house can have very very different perspectives. Yet, you should consider that you and your potential cofounder have similar upbringing because business is full of decisions. Some decisions can be very uncomfortable. For example whether to take up a slightly risky project or not. Decisions like this can lead to extreme disharmony. Having similar upbringing mitigates this risk to an extent, and you can come to a common consensus faster.
3. Do you have similar life goals for the next 5 – 8 years?
The first year of a Startup, similar to the first year of marriage, is considered as the honeymoon phase. Things can get very different after about three years when it is time to scale up and take massive financial decisions. When you and your co founder have similar life goals over a period of next 5 to 8 years, you can give each other that time and mindspace. You relieve yourself of some unwanted time pressures.
4. Are you getting into the partnership for similar reasons?
There can be situations like:
– One of you is starting the company to sell it off within 3 to 5 years time, whereas the other may want to take the business public.
– One of you may be looking for quick revenue, to pay the bills, while the other is a more patient type, and is willing to reinvest in the company.
Whatever the situation, conflicts among co-founders is amongst the biggest reasons for failure of startups. If you want to stay away from conflicts, it is better to get into this partnership for a similar reason.
5. Do you give similar importance to money?
Money is important. But exactly how important? Do you wish to withdraw money out of the company, or you wish to reinvest? What is that amount which you MUST take home every month, in order to pay your bills. Is there a significant gap between what the co-founders need to take back home?
What is the definition of a small project for you? Are you willing to take up small projects? What is the revenue you anticipate in the first year and the second year of business. Are these numbers similar for both?
6. Do you have similar lifestyle and ambitions?
Would you like to go to similar restaurants for team dinners? Do you drink a similar brand of scotch or wine? Do you want to drive the same exotic car one day, or want to travel to a similar exotic destination? Questions like these will give you an idea about each other’s lifestyles and ambitions. The gap in ambitions is among the hardest gaps to bridge.
Trust me, all these small things will start to matter when there is a common pool of money from which both your expenses are being taken care of.
7. Do your skills complement each other?
Best cofounding teams are those whose skills complement each other. Skills can be those which are directly going to be used in business, such as marketing, design, sales, management, etc. Are you bringing to the table skills which are equally important?
8. Is at least one of you an expert in the domain?
The last one is probably the most important one. As suggested by Robert Kiyosaki in his book ‘Rich Dad, Poor Dad’, if you are getting into a business which you don’t have expertise in, it is a recipe for disaster. At least one of the cofounders needs to be the domain expert, who can guide about the intricate details of the industry.
This person will likely also have references of those who can give you business or potential employees which you may want to hire in the future.
If you recklessly join hands with someone, you may end up in a very sticky situation. To put it straight, your partnership with you cofounder will determine the success and failure of your venture.
I am planning on conducting cofounder counselling sessions. Let me know if you are interested.