We personally invest in companies that have a team of cofounders because we believe that working with a team is better than working solo, but one size doesn’t always fit all. I’ve met plenty of successful founders that have built massive companies on their own: Jeff Bezos founder of Amazon, Pierre Omidyar founder of Ebay, Gabriel Weinberg founder of DuckDuckGo, and plenty of others. Here’s the thing, these founders are not in the norm. They are highly educated “freaks” (I mean that as an insane compliment) that could juggle the thousands of moving parts within their company.
You may have all the attributes of a solo entrepreneur. But we believe a significant amount of founders aren’t Bezos, Omidyard, or Weinberg, so be sure to examine your motivations prior to going off on your own. Although it’s rare to successfully do it alone, we do actually encourage you to skip this entire Cofounder Course and build your venture as a solo entrepreneur if you fall within the following cofounder disqualifiers:
If you’re still reading, that simply means you aren’t meant to be a solo entrepreneur. Good! We love startup founders that don’t fall into the cofounder disqualifiers (frankly, we like when founders increase their chances of success). Now slow down for a second, and take a moment to understand exactly why you’re motivated to form a partnership. This is one of your most important business decisions, that’s why it’s the second step in building a successful company. We don’t usually recommend this but this is one of the few phases in entrepreneurship where you need to be selfish… that’s right, you need to take time to analyze and define exactly what you are looking for in a partnership. You NEED to understand why you want a partner in the first place:
All of these are good things, but it is important to identify what you need prior to defining what you want in a partner. Let’s quickly break down the potential partner NEEDS listed above in greater detail.
The major question when deciding if you need additional resources really comes down to whether or not you can successfully launch your startup on your own. Some entrepreneurs can do it on their own and some entrepreneurs can’t. To identify what category you fall into, examine your business plan or startup map of where you want to go with the business and identify if you are missing any critical resources. Take the business plan or map and jot down a list of the critical resources necessary to successfully launch your business: accounting services, web development, sales experience, marketing capabilities, etc. With that list in hand, take time to identify gaps between the resources you have and the resources you need help accessing. WARNING, after identifying gaps, a large majority of first time entrepreneurs rush off to fill those gaps with cofounders. Don’t do that! The gaps you identified don’t necessarily need to be filled by another cofounder. Before rushing into a cofounder relationship, take the list of your gaps/short-comings and identify if secondary sources may fill those needs: Can you outsource the work, get a volunteer, find an intern, buy a resource, or hire an employee? If the answer is no to each of these secondary options, then you can start the cofounder hiring process.
If you identified a team as one of your cofounder needs, be careful… Identifying your need for a team can sometimes go beyond the actual gaps that can be filled in your organization by specific resources or skills. We aren’t faulting you for wanting a team. After all, with entrepreneurship being a long and arduous journey, you may want/need a team for moral support or you might just prefer to work with a team to decrease that sense of isolation and increase the comfortability that comes in numbers when pursuing a risky project.
Whatever your reasoning for a team, please be advised, because from personal experience, wanting a cofounder based on this merit alone makes it difficult to clearly specify what that other cofounder should deliver to the business. If you don’t define what the cofounder does and what value that cofounder provides beyond the comfort of having a team, you may end up looking for a cheerleader instead of a valuable business asset. Just be conscious that many failing cofounder stories come out of this section and we don’t want it to be you.
Innovation synergies are commonly a need in startups creating a new concept, service, or technology that has never been seen before. Whether you put this need on your list originally or not, if you are creating something new, you should be looking for a cofounder in an attempt to build innovation synergies. Creating something that has never been created is tough. There are no road maps. There is very little guidance. And there will be a hell of a lot of problems/setbacks. That’s why you need a partner that can help you rapidly innovate. You need a partner that can help come up with solutions to problems that have never been solved before. You need a partner to bounce ideas off of and talk through the execution of those ideas. Most importantly, you need a partner that can help diversify the risk of creating something new. For all of you that fall into this category, your journey will be the longest, hardest and most rewarding.
The last motivating factor associated with needing a cofounder is due to external factors. Some startups want to join accelerator programs (accelerator programs commonly only take startups with cofounders) and others are hoping to receive a large investment opportunity (VCs commonly search out partners). These are examples of external factors that play a role in many startup decisions. If this describes your startup, take a moment to identify exactly where your priorities lie. If, for example, you decide to look for a partner because you want to get into Y Combinator (an accelerator that requires founders of two or three), please consider if the opportunity is worth giving up equity in your company to a partner. Remember, a partnership in your business is the closest thing you will find to a real marriage, so don’t take it lightly. Getting married for one small opportunity is only worth it if that opportunity could potentially change the entire outcome your organization (enhance the company growth 12 – 36 months, increase the startups runway by 6 – 12 months, create access to resources that would otherwise be impossible).
Quick note from your teacher prior to jumping into the cofounder lesson. This isn’t a blog, so we won’t be adding intros and conclusions to every lesson. Sometimes there may be an erupt stop that sends you to the next lesson; because that may just be the natural flow of the content. With that in mind, we’ll see you in the next lesson.