Starting a startup is no easy feat, and neither are relationships, especially when it comes to business partnerships. The success rate of marriages is already 50%, but the success rate of co-founder relationships must be even lower. A startup will test and stress the relationship between founders, even if it doesn't end the relationship, as founders rarely grow in the same direction and at the same pace over the life of a startup.
However, it is possible to not just survive but thrive in co-founder relationships. Here are some tips on how to do just that:
- Ensure Alignment: FreshBooks' co-founder and former CEO, Mike McDerment, used to say that "alignment and shared values" are the two things you need to succeed in life and business. Before getting started, make sure that you and your partner have a great fit, and that your values intersect. Alignment means having common ground, preferences, and priorities. If one of you wants a lifestyle business and the other wants to raise as much capital as possible, for example, this relationship (and potentially the business) will not work.
- Separate Ownership from Operations: As co-founders, you are both owners and operators, and these two roles need to be managed separately. As owners, you are peers, but as operators, you are not. To avoid conflicts, meet periodically (2-4 times per year) as founders, but not to discuss operating issues - instead, discuss ownership issues and the health of the co-founder relationship. Take time to re-align, re-confirm your shared values and goals, and re-commit to the cause.
- Look for Issues Before They Arise: Don't waste time worrying about your co-founder, but do check in systematically (monthly) to see if there are any issues, big or small, that are bothering them. Small things that go unaddressed can quickly become big things, just as in most marriages. Proactively working on the relationship is also important, just like you would with anything else that is important to you. Ideally, you should enjoy spending time with your co-founder and make an effort to do so regularly. Your friendship should be separate from the business relationship.
- Have Realistic Expectations: Even if you follow all the above suggestions, recognize that one or more of your co-founders may leave the business before you reach the finish line. Be prepared for this and make the transition as painless as possible. Consider having vesting for founder shares, and even consider a period longer than four years, as most startups take double that time or more to get to an exit.
In conclusion, managing co-founder relationships can be challenging, but it is possible to have them not just survive but thrive. Ensure alignment, separate ownership from operations, look for issues before they arise, and have realistic expectations. By following these tips, you can set your co-founder relationship up for success.
