A look at many of the world’s most popular businesses will tell you that it was not a one-person effort.
Running a business needs exclusive focus on several aspects like product development, marketing, operations and support – and most often, the skills needed to execute this is not possessed by one individual. A co-founder will have you covered where your own skills are inadequate.
But here’s the thing – finding a co-founder is difficult. Extremely difficult. Take a look around and you will find that most founders knew their co-founders either at school, university or at their place of work.
Working together on a project helps you gauge the other person’s acumen and alignment with your own work process. Having a co-founder can also push you harder and make your business dream a reality.
A co-founder hired from your personal network can be a good fit because you both know how to work well with the other person.
Doesn’t sound all that challenging, right? But it doesn’t work that way in the real world. For one, not everyone is motivated to startup. Most people are perfectly happy finding challenging roles in their salaried professions.
Which is perfectly fine.
But then, having the same urge to startup like you do is alone not enough. People with entrepreneurial aspirations often have their own dream projects that they want to work on. That is, they are seeking people to work on their ideas just like you want to find people to work on yours.
Unless both of you are magically seeking to solve the same problem, your hunt for a co-founder does come to fruition.
Then, there are these other issues. You need to share similar work ethic and philosophies with your co-founder.
Soon after you start, you will find that one of you is not putting in the same number of hours as the other. Which is again fine in some cases.
For example, the technical co-founder may find herself working more hours in the beginning compared to the operational or marketing guy. At least, the work put in by the other is not as tangible as the technical output you can measure.
This can create discord soon after you start working together. There is also a clash of philosophies. I personally like to bootstrap everything I work on. I have got entire websites built with outsourced developers for less than $200.
I have friends who have started up several times – and each time they did, they put in a significant chunk of their savings into it. We are good friends, but are not compatible to start up together.
Do I outsource?
So you are someone who can either market a product or code, or be the industry specialist evangelizing the product.
No matter what your specialty is, there are agencies that can take up the other components of your business. They can be your technical co-founder. Or a marketing co-founder depending on what skills you need.
I have built several websites this way through third party web development agencies. The advantage with taking this route is that you preserve all of your equity. Co-founders come at a cost – they take up as much as 50% of your business. By spending money on the development or marketing, you can retain all of this yourself.
But again, zero times zero is zero. A specialist co-founder can take your business to greater heights. Working solo can be frustrating many times and you may not always be as successful as you can, with a team.
There are other issues that may crop up as well. The biggest, and perhaps the most expensive, is pivoting.
You do not always succeed with the product idea you set out to build. What happens when you spend several grand building a product only to realize that your customers aren’t willing to pay for this?
You pivot.
But pivoting with an outsourced workforce can be damn expensive. You are basically writing off all the money you spent on the first idea and have to be prepared to spend more building the next one.
With a co-founder, all you lose is time. With an agency, it is time plus money.
However, consider this – your co-founder is one person. A web agency is a team; a replaceable team at that.
I have had instances where the co-founder I partnered with had a baby or moved to a new job. In both these cases, they got busy with the change in their lives and our project fell through.
This probably would not have happened if I had hired a web agency.
I have had offers in the past from web agencies who offered to partner as a co-founder. That is, I offer a stake to this business (and not to an individual). This way, I get to enjoy the best of both worlds.
However, most agencies are not ready for such a proposal simply because they have staff to pay for. Your startup could take several months to make money (or not make any money at all), but they have to pay their developers right away. An equity strategy may only work if you already have a trusted relationship with the agency and they are on a lean few months when they can take up additional projects.
That brings us to the question – how does the relationship continue during busy months. Would they forego money-making projects to clear their schedule for a business that they only have an equity in? That is very unlikely.
Which means, there are going to be times when you need a feature to be built or a bug to be fixed urgently, but your “cofounder” is busy on another project.
But truth be told, this can also happen with an individual co-founder. Make sure you have drafted contracts that outline the minimum expected commitment from each contributing member.
And that’s the big gamble. There is no real answer to the question of whether you need a co-founder to succeed or not. There are pros and cons with every alternative out here and so, ultimately, you do you.
