A company is only as good as the people in it, which means it is important to pick the co-founders that will give your startup the best chance of success. There are three factors that are critically important while picking co-founders for your startup: how many, how you get along, and which roles you will play.
The prototypical startup has one to four founders. According to a study by MIT Sloan School of Management, each additional co-founder up to four increases the chances of a startup’s success. Paul Buchheit, the creator of Gmail and a partner at Y Combinator, says the “sweet spot” is two to three founders.
Why not one or five?
Five founders is generally considered too many because decisions are made slower with more people, and shares of the company are diluted to a point that may deter investors. One founder is too few because starting a business is simply too much work and emotional strain for one person. One person can’t bounce ideas off herself, and is much less likely to realize when she is making an obviously bad decision. Plus, when times inevitably get tough, one of the most powerful forces that can hold a company together is the founders’ drive not to let one another down.
It feels like every major entrepreneurship and business publication has its own answer to what comprises a “perfect” co-founder combination (see here, here, and here, for example). The stereotypical “perfectly balanced” co-founding team has a Hustler, Hacker, and Hipster. This means, someone who can sell (to customers and investors), someone technical, and a designer/creative person. But that is not to say those three skills are the only ones that matter in the early days of your company. From what I’ve seen in other successful founding teams and through research, your founding team should have people that can handle at least the following six roles (in no particular order):
- Sales & Marketing
In the early days of your startup, founders will fulfill several of these roles at once. As you progress, you can hire employees to specialize.
Typically, the primary Founder/CEO will be a vision person, along with one or several other skills. There is a massive list of useful skills that make an effective CEO, but the most important are arguably the ability to thrive in uncertainty and the ability to project a “reality distortion field.” According to Steve Blank, a serial entrepreneur whose book launched the Lean Startup movement, startups move quickly and grow in environments “where almost all of the variables are unknown.” That is, there are no concrete answers for who your customers are, how much you should charge, what your channels of distribution will be, etc. A good CEO and founder can make quick decisions and is not afraid of the uncertainty.
Additionally, a good CEO convinces everyone involved with the startup - co-founders, employees, investors - that the idea isn’t as crazy as it sounds and that they can achieve the goals necessary to make it work. She can project a “reality distortion field” that knocks down doubts and keeps the team motivated.
For the other founders, Blank has a simple two question test to determine if someone belongs on the founding team:
- Do you have a company without them?
- Can you find someone else just like them?
If both answers are no, you have a co-founder. If either answer is yes, you can hire them as an employee once your startup takes off.
How You Get Along
Building a business is a long process, much of which involves spending a lot of time at your emotional worst with your partners. This is why it is important for founders to get along as people, not just to be a perfect balance of skills. It is wildly unrealistic to expect that you and your co-founders will suppress personal disputes and always act professionally in pursuit of a shared goal. Y Combinator founder Paul Graham says that “most disputes are not due to the situation, but the people. Which means they’re inevitable. Don’t suppress misgivings.” Misgivings are much easier to address before starting the company than after.
Make an effort to understand your co-founders emotionally. You should get to a point where if your co-founder is subtly upset, you are the first to notice, and you know why. Even if she isn’t upset with you, you should know the best way to recognize her frustration, and help her work through it.
Choosing the right team is one of the most important decisions you will make during the process of creating and growing your startup. You have to choose the right number of founders, with the right balance of skills, who get along with one another as both professionals and people. If you do create a great team, however, your startup will be strong, resilient, and ready to take off.
Jack Fischl is a co-founder at Keteka.com - a website that connects travelers with authentic tours and activities in Latin America and allows them to book their experiences online.