Wondering how to find the right cofounder but don’t know where to start? Wellington’s Nick Harley shares valuable advice for first time business builders.
I like to think I’m a decent footballer, a better than the average golfer and through my experience in the building trade, I can turn my hand to anything practical. I’m also a terrible chess player, crap at computer games and I’d expect most five year old girls to give me a beating at tennis.
Nobody is good at everything – we all have different skill sets, interests and things we suck at. So why should this be any different when starting a business?
If you are a solo founder, you may be able to do it all on your own initially but you’re making it very difficult for yourself. You can’t be everywhere, you can’t do everything and eventually you WILL need a team to grow further. If you’re scared about giving up on control or equity, then read on.
In my opinion, founders or early stage companies should only have a team of two or three people. Two people with opposing skill sets are the ideal scenario, not just for the company, but for investors too.
Some time ago I came across a startup with six founders. This will never work. Even if everyone gets along, puts in equal amounts of effort and the company succeeds in raising a seed round (they were hoping to raise an early seed round so they could work on it full time), if the investor were to take 40% of the company they’d be left with 10% each. They’d also have to cover six people’s full-time wages.
If and when they needed further funding, they’ll be down to 6-8% each. Not much return if they eventually sell out for $10M one day, so what would happen to their motivation along the way knowing they own so little? If you have more than three founders, I believe you have a problem.
Finding a technical cofounder
It’s a common issue – you have an idea that will require some technical know-how (eg coding, engineering, science) but don’t have those skills yourself. Hence you need what they call in startup world a “technical” cofounder. The problem is that any skilled people worth their salt are generally already otherwise employed. So why should a well paid developer, engineer or maker give it up and come and work on your startup?
Well, they won’t unless you can sell them the dream. If you have a good business idea and you can convince a technical cofounder to join you then you’ll be in a good position, but it’s not easy and it will not happen unless you make it happen.
I’ve had this problem myself. My first startup was a web based software system for the hostel industry, and I had limited technical experience. I thought I could do everything myself and outsourced the development to a company in Romania through a freelancing website – big mistake! If you are planning on doing this, I strongly advise against this route.
Building an MVP (Minimum Viable Product) is relatively cheap. After you have validated your idea and studied your market (which costs next to nothing), you can build screenshots or a very simple demo. Using a freelancer for this is fine, but if you let them build your final product, you’ll regret it.
You can then use this market research and MVP to show potential customers and also try to hook yourself a technical cofounder/developer etc. Go to networking events, startup events and meetups and talk to people. There are plenty of Meetups, groups and events for NZ startups and entrepreneurs but the biggest thing to note here is that they won’t come and find you – you have to get out, get networking and find them!
Finding a non-technical cofounder
In the reverse situation, sometimes it’s the technical people who have a cool idea and product they’ve built. Because they have the skills to do it themselves they can often just get on and build it, but need help in order to market it and turn their idea into a business.
With all that product knowledge and technical understanding, a common trap that technical founders fall into is thinking that it qualifies them to also handle the business and sales side too. They then go out and get someone else who is also technical to help cover the load on the building side.
That’s not the best scenario though. You should always try and match your skills with a cofounder who has opposing skills while you focus on what you are good at. So if you’re a technical founder you should generally be partnering with a non-technical founder.
What if your business has no technical aspect at all?
If you have a physical product or are offering a service, you might not need a technical co-founder at all. But if you are looking to go big you still need help and the same advice still applies. Look for someone with opposing skills.
Are you good at branding, sales and marketing but struggle with financials and the day to day running of the business? Find someone who can help you in other areas so that you can focus on your strengths.
One person might be good at systems, the other might be happier managing customers.
One person might also want to do both, but ask yourself, is that where you/they will be the most useful?
Getting the right fit
Once you find someone willing to help you, don’t jump in with both feet straight away. It could be that you will be spending more time with this person over the next few years than your friends, family and significant other. In fact they will be your other significant other, so you might want to date a few times before you pop the big question.
Do they have the same motivations? Do they have the same goals? It’s OK to be different in personality, but you’ll need to work alongside this person and you need to be going in the same direction or there will be trouble. If you argue, can it be easily sorted out because you’ll certainly have disagreements.
There are several things you’ll need to put in place to protect yourself (eg vesting schedules, shareholders agreements) and give any partnership the best chance of success. I encourage you to spend your earliest funds on legal work rather than blowing it building your product. This is especially important if you’re starting a business with friends – something that happens all the time. You don’t want to leave it until things go wrong and find out you are too late. Many friendships have been lost, and many hard lessons learnt due to disagreements between founders.
Have a trial period and see if this cofounder is the right match. Are their skills complementary to yours? Do you get on well? Put yourself out there, put the right things in place and luck will find you if give it the opportunity.