One of the most common reasons why a company fails is not because the quality of the technology or the size of the market, but rather, it is because of a misalignment between the co-founders of the company.
Just in the past two weeks, I’ve dealt with two strong startup teams that are dealing with a “co-founder break-up” –without having to ruin the company.
Let’s face it, every person has a different reason for why they start or join the founding team of a company. Some want to “change the world.” Some want “to build things that impact millions of lives.” To be honest, many people are in it to have the chance to win the venture lotto, hitting the jackpot of having more than one per cent of shares when a company get listed or acquired, acquiring “life-changing wealth.”
Of course, 99 per cent of startups fail, so it might have been better for most to just work a corporate job. Regardless, it’s very important to know what each other’s motivations are before you commit yourself and spend 10-12 (or more) hours per day with a group of people for at least three to five years.
When I was starting Plentina, a new fintech startup focused on alternative credit scoring and micro-lending in the Philippines, I met one of my Stanford friends who has successfully built a company and exited her startup. She gave me very important advice on cofounder alignment.
She also exclaimed that it is important to develop this transparency early on because, like marriage, there is typically a “honeymoon period” of 12-18 months where everything seems to be fine. But when sh#t hits the fan, then this conversation will be most important to come back to understand each other.
Here are the most important questions to sit-down with your co-founder when you start or shortly thereafter. My advice is to do a “double-blind test” where each one of you writes down the answers separately and discusses.
- How does this startup align with your personal purpose?
- Why are you personally building this startup?
- What is a good outcome for the startup and when do you expect this?
- What is your end goal in 10 years and how does this startup help you achieve this?
- Any life changes over the course of the startup that we must anticipate?
- What are the non-negotiables for you (meaning the situations or values where you will stop everything)?
- What are the areas where you are best at and areas where you are weak at?
- How can I as your co-founder help you achieve your 10-year goal?
Starting a company is hard, and often come with many risks. It is undoubtedly an emotional roller coaster. I hope that you all get to ask these questions to each other early on; not just to avoid heartache later on, but also be able to focus on building the business rather than dealing with co-founder drama.
Have you asked these questions already? If so, would love to hear what other questions you think should be asked as the founding team gets formed.
This article was first published on e27, on Aug. 29, 2020.