Evaluating potential co-founders
Nov. 13, 2020
Finding a good co-founder is the most important task before starting a company, for many reasons such as: you're getting married, they normally get half, breaking up may kill the company, success is also dependent on them, their vibes matter and reflect on your experience of daily work together, and obviously because you're going to work together every day, all day long, for a few years, so you better be in the same mind set too and enjoy the ride while it lasts.
I saw many occasions where it was clear something isn't working and yet the founders suffered and didn't let go, and hopped into the venture despite the bad signals. Please don't.
I believe that finding a good partner is more important than finding a good idea. If you have an idea and even potential customers (not paying yet!) but you didn't manage to find a partner (even by giving half of your company) then perhaps your idea isn't that compelling for all the money in the world, perhaps you don't know how to sell the dream, perhaps the idea itself really sucks. But obviously something is wrong and you need to ask yourself what it is ASAP. And if you lie to yourself, it will only be a waste of time. I saw people that preferred to keep the idea, to give up on their partners. I saw partners that knew they're not getting along well, but they believed it would get better (spoiler alert: it never does), and suffered from bad partnership for years. Sometimes one day they wake up and realize it's time to leave, and sadly most often they don't. I guess they don't have the courage to let it sink when their partnership fails. It's hard, but what are founders for if not for the hard decisions they have to call? Staying in a comfort zone will get you this far.
Yes, you can go solo, I know great founders who did it and it worked for them. I don't believe it's worth the mental headache to go solo (you don't have anyone to share your burden with, or consult on how to take a hard decision, and it's not the same with your shrink, she doesn't have stakes in the company like you do). And more importantly, I believe it's about having fun on the journey, so I rather be accompanied by great people I admire along my side.
Let me reiterate an assumption here that things don't get better in relationships, what you see is what you get from day one - yes, this can be a whole discussion on its own, but I'm pragmatic: I don't have the time to fix my founders' relationships, I have enough problems on my plate, like selling the damned product, raising capital, recruiting people, and managing them. Note that I mean this in the context of the time before you sign a foundation contract to start a company and make the pact official.
Given this assumption, it means that once I do something, I try to make sure it's a good foundation and that I can move on to the next thing without looking back. So finding a good founder/partner for the journey is critical, as it's the foundation for the whole company, and literally called "founder" for that exact reason.
What I'm looking for in a partner then, to name a few:
A good personality, someone I can trust while I'm away
An expert or very strong background in whatever field the company requires (security for cyber, financial for fintech, etc), they can prove to be quick learners too, cool
Worthy of being a founder - they're independent, driving the company, hungry for success, people want to work with them
A game changer - capable of solving problems and creating value on their own
And obviously, you complement each other
That's it, not much, heh?
Now, on the other, these are the things I don't want to see in a partner:
They think they're always right, they like to argue for sake of argument
Being ass-holes or improper behaviour even though they're phenomenal in their craft
Being greedy, or lack of self integrity
Not respecting or undervaluing people
Less self-ego (rather than ego for general success)
The main issue I hear and see most of the times from my friends is that they are capable of sensing a bad signal from day one in the state of "let's check we're fit for being partners", but they then decide to ignore these signals for the sake of "omg, let's f@cking do it already!". Being too eager degrades your senses I guess, and again people are too excited and not enough checking or facing reality.
A few more things: don't give a chance to a founder from day one, either they're fit or they aren't. Don't take chances on someone for the dream company you want to start. They will often let you down. And this one is super important: ask yourself whether that person is better being an employee in the company (even a first one with lotsa stock options), it means they're not worthy of being founders, however they're still very valuable as employees, nothing's wrong with that. The excitement and need to find founders can blur your sight of finding the right persons to work together with you.
Evaluating a potential founder - Normally I like to work with a person for, at least, a few days full time, in the same office (remote isn't okay, it has its implications and this is super critical for the evaluation process) and to feel them. To see how they work, whether they're team players, whether they finish their task to the last tiny bit (and not over achievers either), whether they're fun to be around (well most of the times, we all have our downs), whether they're independent and contribute a lot to the task at hand. People ask me what I work with if there's no company or tasks yet, and my answer is that I just come up with something relevant, like writing a deck together, or researching the market. There's so much that you can learn from a short period working with a person, just be alert and wary and just with yourself, and you will know whether there's a fit. It has to feel good, as simple as that. It's also alright to give them a problem and be there with them to see how they work out the solution, whether they have a method, whether they know to document it, explain it, separate technology-speak from product, and so on.
Last but not least - make sure you have the same philosophy from what you want from the company you're starting together. If one founder is already a rich second timer, and you're a first timer, your interests might not be aligned, make sure you discuss this! Do the exercise of writing down what is "success for you and for the company", and then read it out to each other and discuss it. Talk about the vision of the company (not the goals/objectives!!) and about the values of how you want to run this company, and make sure you see things in the same wavelength! See if you're both aiming for the long run too. And make sure you can agree on roles and responsibilities, don't postpone this.
Also, not all partnerships require/deserve an equal division of the (stocks) cake among the founders, it's alright to give more to a founder that brings more value eventually, you need to feel it makes sense and that you can live with that.
I will finish with saying that I knew one equation for success: good people + strong technologists, and I emailed about 15 friends from the army whom I really liked and thought highly of. And out of all of them, eventually we started only 5 friends to run projects, for half a year, even doing chores like cleaning the toilets ourselves (not much income in the beginning, and somewhat on purpose, I won't lie), and then I saw who's in for the dirty work and who's avoiding it (it's not only about coding, that's the matter). Then it was obvious who should stay and who should leave. And eventually we stayed with only 2 partners that we got along so well and we thought about coming up with a second company one day...