You have the idea for the next big thing that’ll revolutionize the world? Unless you are Jack Ma(the solo founder of China’s most valuable startup, Alibaba) you need to find company to help translate your vision into reality.
Any successful startup needs ‘a hacker, a hustler and a hipster’. Chan Chaiyochlarb, in an interesting article, shows some quick research he did to determine the number of cofounders in well known and successful startups, which came to 2.09. Now finding your 2.09 co-founders is no cakewalk, a lot of brilliant ideas have fizzled out due to lack of a strong founding team.
Before we get into the meat I would like to clarify one thing, you do not need a co-founder from the very beginning. It is going to be harder to find someone early on in your project and it will also cost you a lot more. It’ll help a lot if you have something to show and after successful user feedback sessions, hire a developer to build a basic version of your product . It’s much easier to find a co-founder once you have built something and validated the concept with customers. You need to get to the point where you have done EVERYTHING you can possibly do to prove the value of your idea. Co-founders from the beginning usually have a 50/50 partnership and equal partnerships from the start can get very unstable over a course of time especially if they formed over a short period of time and without putting your potential co-founder through enough scrutiny
The relationship you have with your co-founders is a Professional Marriage of sorts - before you say ‘I do’ there are a ton of metrics and volumes of checkboxes that need to be ticked off. It can be a nightmare to find the perfect match and you might have to go through hell and back to even find someone close to being that.
We often see co-founders who are friends in college that go on to build a super successful startup like Larry Page/Sergey Brin friends from Stanford. When it works out it works out great, but if things don’t go as planned the fall out can jeopardize the enterprise.
It is tempting to share an idea and begin working on it with a bunch of friends. You end up with a few strong people and a few tag-alongs and this needs to be avoided at all costs That’s not to say that working with friends is a bad idea – in fact, you really want someone you can trust, but make sure the skills are there too.
Look at the team you are building and make sure only the A team makes it. If you are building anything but that you need to stop and start fresh. It is never easy to hire an incompetent acquaintance as a co-founder and cut them loose at a later point , it is going to cost you a chunk of the company, you need to tread lightly.
Here are a few ideas that might come to your aid in this struggle
The number should ideally be between 2 and 3 , startups with too many founders will only dilute the talent and all partnerships among co-founders need not be equal there can be a 50/30/20 or a 50/40/10 whatever suits the needs of your business well.
Also all the people you need to work for you initially need not be taken on board as partners, try and hire people to work for you wherever possible.
What usually happens is for one entrepreneur to seek out a partner for a skill he/she is lacking. For example you are a tech guy with no great understanding on how to run a business, you need a hustler and if you’re a hustler with minimum to no tech understanding you need a hacker.
You have to clearly convey all the roles and responsibilities that need to be fulfilled by your co-founder upfront and make sure they are on the same page. It is a great thing for everyone to collaborate by cultivating open culture but that does not always translate into putting everyone in charge, it will only result in chaos.
You need to take control and establish boundaries and a fully operational management system that dictates all co-founders to have reporting obligations. There can only be one CEO calling all the shots.
Set expectations on what kind of other skills the co-founder needs to possess to be part of your work life. And these expectations have to be met, there can be no exceptions. You need someone who has a general domain expertise of your market, who has some credibility with his experience (if you are hiring a complete stranger), also when you pitch your product to them see if they get pumped about the idea. They cannot give their 100% if it doesn’t excite them they way it does you.
This might be the most cliched thing to look for but I cannot stress this one enough, It is very critical for them to have a great listening skill. A lot of Venture Capitalists did not fund great ideas because the founders could not follow and answer accurately. You need people who can absorb all the information provided and react appropriately.
Here’s a quick checklist that the founder of EquityZen, Atish Davda followed while building it’s founding team:
Leap of faith
Willingness to learn
Where can you find the ONE?
Now since you know What and Who you need to know where you can find one too. Here’s the good news and the bad news though. The good news is that there are a lot of places online like Founder2be or there are a lot of networking events for founders to find their potential other founder. But here’s the bad news:
"Almost everyone attending these events are trying to find a co-founder for themselves, this can only mean that only a handful of people are available to join any other startup, it is going to be slim pickings".
The best place to find your co-founder is from your personal network and the personal network of their personal network, keep digging till you meet someone who is as excited about your idea and checks all the boxes you had on your checklist.
Nanxi Liu, an employee of Startup Advice & Strategy writes I've never found co-founders on a co-founder dating site or co-founder networking event. I feel like the top talents don't need to go to those places to find great partners. If they're so good, they're being poached left and right by people or they're already working on something cool. You just need to convince them that what you're doing is cooler.
After doing all the above when you narrow down on a few folks, your primary mission statement is come up with an assessment of sorts to test the extent of their expertise, since you are hiring for something you are lacking take the help of your friends who are SMEs on the same to design this assessment and also to best evaluate the responses.
The journey doesn't end here, the assessment was only an entry level test. Grab a coffee with your top candidates, try to see how the vibe is between you two, there needs to be a sizeable harmony of personalities. Like I mentioned earlier this is a professional marriage , there needs to be a strong connect of ideology and your skillsets should also complement each other.Try to meet the candidate at least 2 to 3 times before you make up your mind about inviting them into your idea. Also be prepared to answer any questions they have for you, they might ask some personal information also and you need to be prepared to provide them all they information they need and give them a heads up about any other major commitments in your life. Here are a few questions you need to be able to answer before heading out to meet the candidate.
How are the roles and responsibilities going to be split?How will the equity be split?What’s on the horizon for the next couple of months?How much do we need to raise and for what percentage of equity?How much money do we already have?What will the first 10 hires be like?What lifestyle and family commitments do you have?Do you plan to sell this at some point or is this it?You need to ask them typical questions you ask your employees too and also add on a few questions to understand how they vision their startup for example:If you want to begin a new company, how would you do it?How would you approach hiring people?Long term goal with your career? What are your 10/20/30 years goals.Tell me about a major disagreement you had recently- elaborate
Andrew Chen, who heads Growth at Uber has a list of questions to ask a potential co-founder to best understand their values/culture and you need to ask these as you observe the guy:
If you put them in a room with 5 peers, would they emerge with the 5 guys signed up to follow them?
Would you feel comfortable introducing them to everyone you know?
If you say something they disagree with, how long does it take before they push back? How hard do they push back?
If you guys disagree on their side of the complementary skills, what happens? What happens if it’s on your side of the domain expertise?
Everyone is different, but you need to keep an eye out for someone who can convince a sizeable amount of people to sign up for your product, who adamantly pursues the task at hand, basically you need a peer not an employee.
You might need to have long discussions about these questions to best understand their psyche, these are all difficult to have, but there needs to be a clear expectation setting done before jumping into bed with your partner.
The biggest conversation for any potential co-founders will be Equity. Until it is discussed it will be an elephant in the room. It is your responsibility to allocate ownership of the firm among the founders. You need to be as objective as possible, this can get very delicate but it is important to tackle this right at the beginning.
Also keep in mind that only 90% is available. It is a good practice to set aside 10% for future rank and file hires. All co-founders are not necessarily co-equal and telling this to your potential co-founder can be tough but it’s best to clarify this rather than getting stuck much later in the timeline of your enterprise
Talk about their personal commitments, if they are married, with kids or if they are going through any rough patches in the family. You can never be surprised, rather you cannot afford to get surprised. You need to fully understand their circumstances and always be prepared
Speak a lot about how you envision the culture for the enterprise, it is a huge red flag if your potential co-founder disagrees with what you have in mind. Discuss it at length to see if you can meet each other mid way. If it doesn't work out, part ways. You cannot hire someone who agrees to everything you believe in also , he might be a Yes man. You need strong willed people who are not afraid to voice their ideas.
Apart from these , you need to do a full legal workup on the candidate and ask a lot of questions probing into the mind of the potential co-founder spanning from their business ideas, beliefs to casual conversations about their passions, hobbies and before you leave from the meeting you need to know everything there is to know about a person, after all it is your dream project, but also make sure they know everything about you trust works both ways.
Before you evaluate all the prospects you need to ask yourself these questions:
Who are your other choices? And where does each one of them sit on skill levels
Will they scale if your enterprise expands
What are their pitfalls?
Can you trust them as a CEO? And handling direct reports
Who’s someone you want to impress? Would you let them do a 1:1 with your co-founder?
Could you imagine reporting to them?
‘How will you know that you’ve found “the one”?’ It is a combination of two things , the guy needs to be totally badass at the skill you are primarily hiring him for but you also need to feel right about it in your gut, this can be a time consuming and often frustrating activity but I can assure you that you it’s not going to the first person you meet, only after meeting a lot of people you can find the best one from the lot.
You need to make sure that the candidate fits all the boxes because you will be potentially spending hundreds of hours, it’s best to spend enough time up front before you can make an offer of any sort
The ‘ONE’ is just as excited and motivated as you are about your idea. The one feels like they belong to your team. That’s when you know your work is done. Always remember the product is going to belong to them too and they will invest their best efforts and time; it needs to be their baby too.