Happy founding teams are all alike; every unhappy founding team is unhappy in its own way. — Anna Karenina principle of founding relationships
Building a company is an incredibly arduous journey. One that will (if you are lucky) span a decade or more with occasional highs and frequent lows. Who you choose to go on that journey with is one of, if not the most, impactful decisions you will make in the life of your business. This article outlines my belief that mutual respect, above all else, is the key to selecting the right co-founder. And that the secret to maintaining a healthy relationship with your co-founder is to ensure that respect is upheld.
Co-founder breakup is one of the leading reasons for startup failure and, even when it’s not listed on the death certificate, I suspect co-founder disagreements are the ultimate reason for many more failures than we realise. Like an underlying health condition, if the relationship between founders is not healthy the organisation cannot be healthy in the long run. When founders no longer communicate openly and honestly a plague of misaligned incentives and objectives starts to take root. Morale degrades, decisions get delayed and decline begins.
While the evidence suggests that you should partner with one or more co-founders; even if you’re going it alone, the message and lessons here apply equally well to early team members and to teams more generally.
The Mistaken Importance of Affection and Complementarity
When individuals form teams, co-founding or otherwise, there is a natural tendency to gravitate toward people that satisfy one or both of the following:
- Affection - They’re people we like
- Complementarity - They’re people with complementary skills
This is understandable because it’s easy to identity people who we like and who are likely to be complementary. We’re conditioned to quickly determine if we’d like to hang out with someone and we can identify the skills we think we need from a resume. In contrast, respect is impossible to identify quickly because it’s won in inches and lost in miles. It takes time to build trust with someone and it shouldn’t be bestowed cheaply. So, while I’ll go into why affection and complementarity are flawed measures of suitability, it’s worth pointing out that respect is not an easy thing to identify or optimise for (but it’s worth doing so anyway).
Don’t work with people because you like them
Working with people you enjoy being around is doubtlessly fantastic. In an ideal world you’d only work with people you really like. However, when thinking about building a business, affection should be viewed as an incredible bonus, rather than a necessary condition.
The reason is quite simple. The job of a co-founder is not to be a friend. Or at least acting as a friend is only one part of their job description. Very often they will need to tell you hard truths and give honest feedback. This is made quite difficult if the predominant mode of your relationship is one of friendship. That’s not to say it cannot be done, it’s simply to say that the relationship cannot be friend-first, co-founder second.
When thinking about who to work with, both for co-founders and in the early team, I find it helpful to think about the following quadrant, with affection and respect as orthogonal axes.
Perhaps surprisingly, I think the worst combination to work with is someone you like but don’t respect. This is like a friend that’s fun at a bar but you wouldn’t trust to babysit. The reason this archetype is worst is firstly that it’s much less tempting to work with someone you neither like nor respect, so you’re much less likely to make that mistake. Secondly, if you do find yourself in this situation, it’s much easier to fix (or get out of) a relationship where you respect, but don’t have much affection for, the other person. Lastly, I believe genuine affection can grow out of mutual respect, not so the inverse.
Interestingly, there are many examples of successful partnerships where there is evidently a great deal of respect but where the individuals are not exactly best friends (top left in the above). A quote from the venture capitalist Doug Leone comes immediately to mind. However, my favourite example are the magicians Penn & Teller, who have the longest running show in Las Vegas history. This video sums up everything this article is about beautifully, but to pick a few quotes:
“The most important thing about our partnership is that its not based on cuddly love and affection. Over 35 years, by many definitions, he has to be my best friend ... But we're much more like 2 guys who own a dry cleaning business … When Teller and I don't like each other, it doesn't change much of anything.”
”We have much more respect than affection and I think there’s a lot to be learned from how much stronger respect is than affection. For one we understand respect and we don’t understand affection.”
”He's become my best friend but through a very circuitous route, through respect and through work.”
Finally, I want to caution against optimising for affection because it’s very easy to go too far with mutual affection. This is what Kim Scott calls “Ruinous Empathy”, where your affection for one another is preventing hard but necessary conversations. In contrast, I don’t think you can go far enough with mutual respect (although you can with one-sided respect - which looks like absolute deference and passivity).
Don’t work with people because they have complementary skills
It's very tempting to think the ideal partner is one who possesses the inverse of your skill set. If they have a product brain, you have a sales brain. They’re energised by getting out to talk with customers, while you feel most productive writing code at the office.
Obviously having a mix of skills is important in a small team. In the limit, you cannot all do exactly the same job. However, I see a couple of related issues with using this as an absolute criterion to decide who to work with:
- It’s not that relevant in the long run
- It neglects personal growth
The relevance of complementary skills
If you're on a decade long journey together, you have very little idea what skills will be required for the vast majority of that time. You can make an educated guess, and of course you should. However, finding a co-founder cannot be a skills-based box-ticking exercise.
To the extent to which skills can be selected a priori, your aspirations should always be outstripping your skills anyway. You should be under-qualified in some ways, at all times, for what you're trying to do. This is often because nobody has tried what you are trying, and therefore nobody has the exact mix of skills “required”. Or it might be that new opportunities arise that require a completely new set of skills. That is the nature of entrepreneurship. Mutual respect means that you realise this reality and you trust each other to figure it out as you go (i.e. personal growth).
Finally, as you grow the team, you can begin to hire for the skills you realise you both lack. If you’re doing hiring correctly, you and your co-founder should be the least qualified in the vast majority of the “hard” skills your business needs.
Personal Growth
The best founders are demonstrably constant learners. As we’ve discussed, it’s simply not possible to possess all the skills you eventually need at the outset. Indeed, it’s not even possible to know what those skills are going to be.
Working with people based only on their skillset today is shortsighted in the extreme. You probably want a minimum bar of skill or experience but you are much better served looking at the slope of their career to date, rather than the Y-intercept. In other words, bias toward people that will grow quickly with you, and with the company you’re building together.
Respect means trusting that someone can grow personally. It also means trusting that your cofounder will do things that are not in their wheelhouse (often tasks “beneath” them), and that they’ll action personal feedback to grow themselves, in order to make the company a success.
However, you must have a right-to-win
The caveat to all of the above is that you must, as a team, have a strong right-to-win in the space where you plan to operate. That does not mean a bulletproof 5 year roadmap. It means you need to have the ability to access your initial customers and the ability to build the v1 of your solution, as you understand both to be today.
If you and your co-founder lack the skills to do that, you should rightly question whether this is the correctly idea for you as a team.
The Importance of Respect
Now that we’ve discussed what not to optimise for, and alluded to respect in the process. It’s time to directly address why respect is so important for co-founding teams. Both why you should seek it out in a potential co-founder and continue to build, encourage and model it with your co-founder and your entire team.
Respect is a necessary precursor to trust
In early stage companies trust is absolutely essential. The environment is highly uncertain, extremely stressful, and there is very often a lot of money and ego involved. Therefore you want people around you that you can trust implicitly to act in your, and your company’s, best interests.
The obvious example concerns control of the company. Contracts can only do so much before you need to trust that you co-founder will act with your interests in mind, even when they have the opportunity to benefit at your expense. But this is the most extreme situation. The more common and more interesting examples are ones where you have to trust your co-founder’s day-to-day decisions.
Very often these decisions must be made when only one of you is only somewhat certain. You must therefore trust the gut feeling of someone else, or ask them to trust yours. Very rarely will you have the luxury of getting to 100% conviction from everyone. It's important that you trust your co-founder’s judgement and equally, if not more, important that mistaken conviction is not held against them. When startups stop taking risk they die. The best way to encourage appropriate risk is to build psychological safety predicated upon deep respect.
Respect breeds high performance
Quite simply, people that respect one another want to work harder for one another. Respect builds the right environment for high performing teams. While the topic of culture is one for another essay, my personal view is that great startups are ones that operate like professional sports teams.
You can contrast this with companies that are “like a family”. In a family respect is granted by admission. You respect, and do things for, one another by virtue of who you are. You don’t have to work to keep that respect, it is virtually unconditional. In a sports team respect is granted only because it is earned and one must continue to perform to keep that level of respect.
Earning and keeping respect is therefore a mechanism that motivates your co-founder and everyone on the team to consistently perform at their highest level. To go above and beyond their own expectations of themselves for others. Moreover, respect is a long term motivation. You can’t earn respect without continually doing the work or play politics without eventually losing the respect of your colleagues. Startups are ultimately positive sum and positive sum games should only be played with long-term people.
Finally, mutual respect allows people to be radically candid - to say what they think while giving a damn about the person they’re saying it to. This is incredibly important for high performance and doubly so for startups. You don’t have the luxuries of time or budget. If things are not going to plan you must speak up. You have to feel comfortable critiquing work, demanding higher standards, and delivering news people don’t want to hear. Equally, you have to feel comfortable, even appreciate, being on the receiving end of criticism. Respect is the substrate that lets you deliver “bad” news in a way that is constructive.
Respect Aligns People
Respect is a necessary, but not sufficient, condition to align people. Having a clear vision, and the ability to communicate that vision is paramount. However the majority of your team's average week is going to be spent not absorbing a vision document, or talking about the future. It's going to be working extremely hard on the challenges in front of them.
Respect solves the "when you’re not in the room" question. It fills the gaps where mission and vision are not guidance enough. People that respect one another act in the collective interest. That means that, more often than not, they make the correct calls. They don't leave messes for others to clean up or say "someone else will do it". Once again, respect aligns people to contribute to the positive sum rather than free-ride on the work of others.
Respect is energising
To respect someone is to have a deep appreciation for their talents and how they conduct themselves. It's massively energising to work with individuals for whom you have a lot of respect. Otherwise boring meetings can be completely energised by their contributions and watching them solve problems can reformat what you thought was possible.
This is so incredibly important because there are times where you will lose the thread of why you're doing what you're doing. This is one of the many reasons being a solo-founder is so difficult. Having someone with you that is able to energise and inspire you on the mission and on the future is valuable beyond measure in those moments.
Conversely, when respect is lacking between co-founders. Meetings are like wading through treacle or walking on eggshells - if you're not talking over each other, you're talking past each other. And when it comes to the work, both of you feel your contributions are not valued or not recognised at all. That’s energy sapping and soul destroying.
Bret Taylor (Chairman OpenAI, creator of Google Maps) talks about how, when he was looking for a co-founder for his 2nd business, he was looking not only for a partner in business but also in the struggles. Finding someone you respect is a way to identity who is likely to be a great partner in the those struggles.
Conclusion
Whether you’re looking for a co-founder, evaluating the health of your relationship with your co-founder or considering the health of your team more broadly. I hope that you hold respect as a fundamental attribute to consider and to foster in your relationships.
Finally I want to reiterate, everything above holds only for mutual respect. And because respect is not given, but earned; that means modelling the behaviours you want to see, keeping the promise you make and going the extra mile for your team every day.
Camin McCluskey is Co-Founder of Stackfix. Stackfix helps startups find the right software, fast. If you or any company you know are looking for CRM / Customer Support / Applicant Tracking / HRIS software - go to www.stackfix.com (it's totally free).