You and your co-founder need to be 'business soulmates.' Here's how to make sure you're in sync.
The most important employee decision you will ever make as an entrepreneur is your first one: choosing your co-founder. Together, you will create the foundation upon which your company will be built; how well you two work together will dictate the business model, the culture, and ultimately, the company’s level of success.
Yet choosing the right co-founder is a decision that a surprising number of entrepreneurs mishandle. To avoid the dire consequences of choosing an ill-fitting co-founder, follow these rules:
It’s Business, Not Personal
When it comes to selecting a co-founder, comfort is king. You two will be discussing business problems with one another virtually every day, so you want someone who you feel comfortable enough with to be able to voice your opinions freely.
The perfect co-founder is your “business soulmate.” While it’s unrealistic to think you will agree with your co-founder on every decision, your life and business philosophies should be aligned. This will ensure that despite minor differences, you will remain united on the company’s values and direction.
Unfortunately, this means that choosing a friend as your co-founder is typically a bad idea.
At Sageworks, I call my partner on weekends to discuss business problems. We are not friends in the traditional sense, but we genuinely enjoy one another as businesspeople. In the past, some of my friendships have become strained when differences of opinion on business decisions caused friction in our personal lives. It’s naive to think that friends will be able to completely separate their business selves from their personal selves-- and eventually, any personal tension will negatively affect the company.
Don’t just assume: “We’re friends, so let’s start a business together.” A smarter entrepreneurial mindset would be “Who is best suited to help me we build this thing?”
Look for Complementary Skill Sets
Business, like life, is about balance. That’s why you and your co-founder should have an inside-outside dynamic between the two of you. One person should be Mr. (or Ms.) Outside, one person should be Mr. Inside, and these two roles will likely reflect each person’s personality.
The Outside partner should be your company’s face to the world. He or she should focus on raising money, business development, securing partnerships, and recruiting the most talented employee candidates available. This person will likely be the more gregarious, outgoing of the two, as his or her goal will be to assert the company’s vision on the world outside of the office.
The Inside partner does exactly what the name implies. He or she should be more concerned with making sure the company’s goals and vision are executed. The Inside partner should be the person who naturally drifts toward overseeing operations and finding elegant solutions to your company’s problems. He or she will ensure that your product or service delivers on the message that the Outside partner is spreading.
Focus on Accomplishments, not Background
Far too often people are impressed with where someone worked or where he or she went to business school. The company or school that a possible co-founder came from pales in comparison to what the person did while they were there.
When choosing your co-founder, look at their track record rather than just their accolades. If a person made a tangible difference at her last company--whether it was Apple or a mom-and-pop store-;she is more likely to replicate that performance. A person who was a successful business founder in the past, regardless of the size of that company, is more likely to help you now than someone with a well-polished resume.
BRIAN HAMILTON is the co-founder and chairman of Sageworks, an Inc. 500 honoree. Hamilton is an original co-developer of FIND (Financial Information into Narrative Data), which converts financial numbers into plain language.