Startups: The importance of the Founder Chemistry

I have been involved in some interesting conversations recently, where technical founders are struggling to find business co-founders and vice versa. Additionally, there seems to be the search for the holy grail of what defines an effective founder. Everything from age analysis, to combinations and structures. But I wonder if there is a magic bullet theory that could be derived here?

In my limited experience, these are the elements that I found critically important.

1) A respected and aligned knowledge base

Maybe unusual to be at the top of my list, but I believe this is one of the culprits for many relationship breakups disguised as other things. Take the case of a technical and non-technical cofounder, one must respect and trust the other’s knowledge and experience. As a non-technical founder, if you are questioning every technical decision that your partner is making, you are doomed for failure. But this trust needs to be earned. You need to make decisions your partner’s and your team will respect. As soon as you do something that smells of something different, that respect is not only lost, but everybody’s motivation will be channeled into something they think is more important, and it not you or your startup.

2) Equalized commitment

This is not about a 50/50 split, but about the commitment each of you are willing to provide. Do you agree that once the business is sustainable, that you may have to give up your day jobs? Do you have alternative agendas going on, or does one of you see this as a pet project while the other is banking his whole life on it? Nothing wrong with any of these scenarios if you discuss this prior and both agree the arrangement you are entering into.

3) Strategic alignment

One would argue that this is the no# 1 important aspect. That you all agree what the strategic direction is. What is going on in your head is agreed by everyone, but this may be only your perception. The best way to tackle this is through your existing strategic discussions, but don’t forget to try and do some crystal ball gazing. Ie/ when toting out your grand plan, start asking some ‘what if’ questions; “what if we run out of money in 18 months?”, “what if someone offers to acquire us in 12 months, but at a fraction of our expectations?”. See if you are all on the same page in the early days with these types of decisions. I would also recommend you keep notes here – believe me, people’s attitudes change when real money is being thrown around.

4) Clearly defined and accepted responsibilities and accountabilities

This is almost business management 101, but I have seen so many disputes occur because there was no clear concept of who should be doing what. “you mean you expect me to write the monthly newsletters?”, “when did it become my role to go out and do sales?!”. Remember that “accountability” is the decision maker, while “responsibility” is the doer. If you have not used one before, I love using RACI matrices for this.

5) Vito power

This is a hard one, and I struggled to define it. But what happens when you are just totally at odds as to what the decision should be? The rule defined above should help here, but it’s the big strategic decisions that I am talking about, most specifically “time to pivot”! When one founder believes that the current model isn’t working, and it’s time to change, while the other founder is convinced that the existing one has not been exhaustively tested and we should persist. This is a critically important decision, but who wins? The best path you have is to try and argue your case and persuade the other side, and I encourage that this is done until all avenues are exhausted. Failing that, someone may have to pull the Vito card. But keep in mind, its not going to be pretty if you do!

Anything else you want to add?