How to look out for co-founders and where can you find your better half in business? The moment you need a co-founder is not always when the business starts. What should you match as co-founders and what to be different at? How can you tap along each other and maintain a longer partnership?
In the August In Your Shoes event, we invited Maegan Yip from XNode Singapore and Chen Zhang from Cowtransfer to discuss these co-founder questions.
When a startup company has 2 or more co-founders, what elements shall the co-founders care about most. Should they be the identical self of each other or have considerate differences? From the audience poll, the top 3 things co-founders shall match are vision (78.6%), compatibility and chemistry (64.3%), and passion (42.9%).
Vision is usually the first thing you talk about when scouting a co-founder, while compatibility and chemistry needs to be tested out with core values and the connection in between. In reality, you are probably checking a little bit of everything, from commitment to alignment of values, from communication style to passion and motivation…Great team dynamics have a higher chance of entrepreneurial success. Plus, investors always look out for the team. They want to see passion, adaptability and good team dynamics.
You shall also pay attention to desirable differences. The most common challenge faced by founders, especially during the company’s building stage, is that founders tend to have the inability to acquire all skills. It's important to find the right key person who can help you strike a work balance. In other words, you need to find someone who has complimentary skillsets, different expertise, as well as different perspective.
Chen thought the top 3 matching elements of co-founders shall be skillsets, vision, and commitment. As an entrepreneur for the first time, it’s hard to know what kind of co-founder you really need. You might have certain pre-set requirements but it’s easy to make mistake picking the wrong person. However, there could be ways to minimize this type of mistake by clarifying the things you are looking for and why it’s important. In Chen's startup journey, commitment in both efforts and money is critical. A founders’ financial investment helps to clarify the founders’ share, increase commitment beyond passion, and test the belief in the company’s business model particularly in the tough time.
Coming from a venture builder perspective, co-founders are not balanced when it comes to commitment. For an early-stage founding team with business person and tech person, people always assume that business person has to go out and do customer validation calls. In reality, it’s both of them. Both founders need to do that and experience the uncomfortable parts of doing something outside your comfort zone. You can see commitment turn out through that. Regarding the financial commitment, it also depends on what you are building in the end of the day. For software build-up, founders may trip along the way. For hardware startups, co-founders need to figure out how to invest earlier. As to deep-tech startups, financial investment plans for the long scale. Moreover, where you are at your lives (younger age or with a family to raise) may affect the founders financial stability and investment.
How to deal with co-founder freak-outs and maintain a healthy and productive co-founder partnership? It’s said that 2/3 of high-potential startups tend to fail even after raising the VC funding. Many things could go wrong in the early-stage founder dynamic. Agreeing on roles is super crucial. The co-founders shall also manage communication and trust, practice zero-ego clash, balance working hours, and provide emotional support.
Chen had three months hesitation before finally decided to break up with his co-founder. The hardest part was making the decision instead of announcing to the team. The question in the first place for him was how the company could survive instead of how to deal with the co-founder conflicts.
It helps to have a matrix system and hard conversation with your co-founder. For example, you can use a team canvas to lay out vision, roles and responsibilities, and how to deal with conflicts. List things that are important to each person, where you see yourselves in 5 years, what will you do if you were to breakout, etc. and have a transparent conversation over the topics.
Your friend or family is probably not the ideal source for co-founder. Your close personal visions may mis-align with what you want to create the company for. Leveraging on your business and industry network could work. It makes sense to partner up with someone who has the domain expertise, as you do not want to jump into an industry that's completely different or unfamiliar and you have to build everything from scratch. You may also talk to your potential investors, who can help in both business suggestion and co-founder referrals.
There are also other platforms and cool ways to scout business co-founders. If you prefer social settings, it’s a good idea to attend networking events for startups and indulge in the ecosystem. One fun way is to participate in hackathons where you can meet random people within 24-48 hours and create something together.
To know the answers to the above questions, welcome to watch the video at: https://mp.weixin.qq.com/s/1mrh_DsB80HsX-nAjtkieg
“In your shoes 创业有得聊” is a series of events for startup founders. We invite experts from different backgrounds as well as startups with pain points in their entrepreneurial journey, to meet, talk and share tips with practical tools and methodologies.