You have an idea, product, or service that you think people would want to buy. Since you are running the business, the majority of the profits will flow to you. The simplicity of this process is what motivates thousands of people to contemplate starting their own company. However, what halts the majority of these people in their tracks is what comes next.
The initial idea of starting a business is simple.
However, once you start to explore becoming the founder of a startup or small business, you start to uncover all of the other moving parts that have little to do with your initial idea. This includes things like legal, logistics, startup costs, hiring staff, marketing campaigns, sales tactics, business plans, and more. Depending on what you are trying to launch, this may also include steps such as finding investors and technical work that you may know very little about.
It is difficult to enter the startup world for several reasons. Having a great idea is not enough. You may be required to navigate things like raising capital and pitching to investors. If your product revolves around a program, tool, or software, you will at least need to develop a general understanding of how to manage the technical aspects such as coding and web development. You do not need to have this knowledge when starting a company, but you should plan on figuring out a way to learn what you need to as quickly as possible.
Do you really need a co-founder?
Yes, most entrepreneurs need a co-founder, but some don’t.
You have to find a co-founder who has the skills you don’t. Once again, this is simple on paper, but complicated in real life. A co-founder is much more than someone who helps you tackle the things you don’t want to do. They become a partner in making your vision a reality. By taking on a co-founder, you are allowing someone else’s opinions to affect the direction of the idea that you originally came up with.
The First Step in Finding a Co-Founder
Before we dive deeper into the pros and cons of having a co-founder, you should understand one key fact that is often overlooked.
If you bring on a co-founder, there should be a motivating reason for them to be part of your company. Contrary to popular belief, they do not need to be as passionate about your vision as you are. They probably won’t be, and that’s ok. If you really think about it, to say that every founder needs to find someone else who is as passionate about their ideas as they are is really unrealistic.
What IS important is that they see your company as a vehicle to get them where they are now to where they want to be in their own path. Here are 3 situational examples:
#1 If an individual’s goal is to be an executive of a public company, then they might want to join a startup that has the goal of either going IPO or selling to a public company. Or, they could take the obvious route and work their way up the corporate ladder avoiding the startup scene entirely!
#2. If their dream is to cash out at a young age, they may look into joining startups with a strong exit strategy.
#3. On the other hand, if they want to be part of growing company where they can make a big impact and enjoy a long and lucrative career, then their best option might be a lifestyle business, which is defined as a business set up and run by its founders primarily with the aim of sustaining a particular level of income and no more; or to provide a foundation from which to enjoy a particular lifestyle.
It is difficult to gain a complete understanding of someone’s motives or anticipate their behavior during a certain situation that may or may not arise. However, you can ask certain questions to determine their mindset and attitude towards becoming a co-founder. You can ask them to speak about their long-term goals and what they hope to achieve out of coming on board to join you as a co-founder. You can also inquire about whether or not they have been a co-founder before and what their processes are for dealing with issues and challenges.
The Main Reason Why You Need a Co-Founder
There are several reasons why you should consider bringing on a co-founder. But the most significant one is:
Sharing Key Responsibilities
A co-founder is someone that in theory can help you manage the day-to-day stress of running a company. When something goes wrong, there are now two minds working to fix it instead of just one. When a problem arises you may benefit tremendously from another set of eyes and different opinions. At times, you may be too close to the problem and suffer from clouded judgment. Your co-founder can prove an educated and unbiased solution that you may not have thought of yet.
Advisors and employees can be beneficial when it comes to seeking advice and solutions. However, there are limits to what you can count on them for. For example, it is unreasonable to call an employee in the middle of the night about a high-level technical or logistical issue. Also, as a startup founder, you tend to use your employees as a sounding board for new ideas that are not fully formulated yet. They may be more inclined to take your ideas and run with them to make you happy instead of giving you the honest feedback you need.
A paid advisor’s main objective is to help you navigate the major problems that arise, not the everyday stuff. However, if they are not a paid advisor, their availability will be limited. Also, only a co-founder would be willing to split your start-up costs because they are expecting to be compensated on the back end.
A significant reason entrepreneurs bring on a partner of this magnitude is to impress or satisfy the investors they are meeting with. When you are asking a firm or individual to invest significant amounts of capital, you need to show you have covered all of your basis. Investors want to see that each area of your business will be managed by an expert. This helps mitigate the risk of failure and decrease the possibility of them losing their investment.
The Biggest Point of Consideration When Getting a Co-Founder
At this point, you may be thinking that bringing on a 50/50 partner to run your company is a no brainer.
If that is the case, it may surprise you to learn that a majority of high-potential startups fail due to conflict amongst co-founders.
Harvard Business professor Noam Wasserman studied 10,000 founders for his book “The Founder Dilemma” and found that over 65% of startups will fail because of issues over leadership, money, strategy, credit, and blame between feuding co-founders who cannot work together for the good of the company.
It’s a bit of a paradox when you come to think about it. On the one hand, we have investors who request your team with a co-founder to compliment your strengths. However, while that may work in the short-term, it appears that any benefit it brings may be washed out in the long-term. What is the point in appeasing an investor if the decision you make has the overwhelming risk of dooming your company forever?
If you feel strongly that you have a company you want to start and are not interested in having a co-founder, it is important to know you are not alone. Sarah Blakely is the founder of Spanx, a billion-dollar brand that sells sports apparel and intimate wear for women. She was able to secure the necessary investments and experience tremendous growth without the help of a co-founder. She followed a tried and true formula of crafting an idea, working hard, having a vision, and running her business with herself at the top.
If you did a Google search, you would find many successful entrepreneurs with stories similar to Sarah’s. The point is this: do not let anyone tell you that you need a co-founder to make your dreams a reality. If you find someone that shares your vision and you can get along with, then it is something to consider. However, do not force something to fit if it doesn’t just to appease an investor or check a box off your list.
The Role of a Business Coach
A business coach could be the middle ground or compromise solution you are looking for.
A business coach can advise you on various areas of your business, especially the ones you feel you are weak in. However, the final decision will always rest with you. Your coach may request an explanation but it is because they want to make sure you are making the right call. They will not argue with you the way a stubborn co-founder might. Your coach can also make recommendations and provide advice based on fact, not emotion because they are not financially invested in your company.
Investing in a business coach may satisfy the concerns of your investors as well. They will be impressed that you are acknowledging your faults and have decided to invest your money into finding ways to solve them. You can position this coach as a “senior advisor” when presenting your pitch and layout their qualification and experience. This may silence any critics who are hesitant to invest due to your lack of knowledge or experience in a specific area.
In a perfect world, every entrepreneur would find a co-founder who perfectly balances them out and together they launch the perfect product without issue. However, the world of launching a startup is far from perfect. The short-term benefits of bringing on a partner may seem appealing. However, the long-term damage could be irreversible. Unless you find that ideal partner, you are better off investing in the right coach and let them guide you in the right direction while you make the final decisions.
Are you looking to invest in a coach to guide you through your entrepreneurial journey? Book a free introductory call here to see if you’d be a fit to work with me, and get early access to all of my content!
Hi! I’m Diane Prince. I co-founded a company that we built from scratch to $50 million in six years and sold to a strategic buyer. I am a keynote speaker that talks and writes about building startups, founding businesses, and entrepreneurship. I share my perspective from my own experience from over 25 years building, scaling, and selling businesses.
Connect with me through the social icons below!