What to Look for in a Cofounder – an Evolving Personal Framework
Most of the HBS students take the “Founders’ Dilemmas” class with the hope to find the “magic formula” to answer the question of “what to look for in a cofounder.” Unfortunately, even a class with “Founders” in its title does not seems to have the magic bullet answer: we analyze cases and experiences of past founding teams with the hope of using pattern recognition skills to guide us through future founding events, and that appears to be the best approach available. However, others’ experiences can only go so far – knowing who you are, how you function, and analyzing your previous experiences might be even more important.
I have (fortunately?) had the experience of working on my own startup with a cofounder while at HBS for about a year before the founding team split happened. Having previously worked in VC, I had some exposures to capital structure and founder issues through indirect observations and anecdotes. Being a first-time founder, I tried to rely on the “rules of thumbs” I picked up as a VC, but most of the time I had to rely on my instincts. Coming out of and reflecting on my first founding experience, I started to construct a “cofounder framework” that I hope to help me form better judgments around cofounder selection next time around:
- On the same page regarding expectations and goals in life as well as the venture. This ranges from the practical question of “how long are you willing to go/can you last without a salary?” to “why are you doing this?” and “do you want to build A company?” vs. “are you interested in solving this very specific problem (and just this problem)?”. In my opinion, this is the single most important element that can contribute to a founding team success (or cause failure). If cofounders are not aligned on these issues, they will run into problems when times get tough – one wants to persevere while the other one might mentally give up much quicker.
- Complimentary skill sets so that the team is “uniquely positioned” to tackle the space/solve the problem. Using the investor lenses, I would love to see a team slide in the deck highlighting all the right functional and industry experiences that the founding team collectively possess to have an “unfair advantage” to tackle the problem this startup is trying to solve. Why should I have a lower standard when I switch roles from investor to founder? In the world of startups you are always raising against time, but I believe this is one of those decisions that you can’t rush into. Be patient and find the best people you can possibly convince to partner with – optimizing on your founding team is one of the best investments you can make to increase your startup’s chance of success.
- Personality fit. Starting a company is hard, and you will be working ALL THE TIME with your cofounder – you most likely will spend more time with him/her than with your significant other. If you don’t respect each other and can’t enjoy hanging out and working together for long periods of time, then it’s probably a bad decision to team up. This quality is hard to observe at first, but you can test the compatibility by working together over a “test period” on small projects before fully committing yourself.
I expect this framework to continuously evolve and develop as I incorporate more personal experiences and observations, but hopefully it will help me increase the chance of success in my next venture by avoiding major “founder issues”.