Why It's Better to Launch With a Co-Founder
I've had the opportunity to launch two businesses in completely different ways. At TripAdvisor I launched as chairman and co-founder, with CEO Steve Kaufer and two other co-founders. CarGurus, my current company, I started on my own. Thankfully, both have grown to be sizable, profitable companies, but the fact remains that the solo course has been markedly more challenging.
Owners will tell you their company is "their baby," and I am no exception. The intensity and excitement of starting a new venture, and the weight of responsibility that comes with every tough decision, is a lot like raising a child. Start-ups and parenting can be demanding, frustrating and rewarding at any given moment, and having a partner with whom to share the burden/adventure is invaluable.
The right co-founder not only brings complementary skills and viewpoints, but can also offer a sounding board through tough decision-making. At TripAdvisor, for example, we came within months of running out of money and faced the agonizing decision of whether to scrap a business model that we had invested two years building. Making such a tough decision was not straightforward, but it was much easier with partners to talk through the pros and cons of such a new direction.
A team approach also allows for a division of labor and focus, which can be especially beneficial in the early days of a start-up. Coming into TripAdvisor, I brought a business background that was complementary to Steve Kaufer's strong technical/product vision. In contrast, at CarGurus, I launched without a co-founder at the initial founding stage. With my focus naturally tilting toward the business side, early versions of our online service arguably lacked a well defined product vision. Eventually I brought on board a strong VP of engineering who has added tremendous focus to this part of the business. In hindsight, I think this lack of a technical co-founder hurt our product offering in our early days.
If you do decide to launch with a co-founder, here are some additional thoughts:
1. There can be only one CEO.
At TripAdvisor, I was chairman and co-founder but Steve Kaufer was the CEO. I was there to provide advice and guidance, but in the end Steve made the final calls. In any company there has to be one unambiguous leader. In my view and experience, co-CEOs simply do not work.
2. Be clear about who does what.
With partners, make sure there are clear lines of responsibility and don't meddle in your partner's part of the business. Perhaps one person takes the business side while the other manages the product. Communicate so you and your partner(s) understand who does what.
3. Do your homework.
You are about to enter into a 5-to-10-year marriage with your partner(s). Make sure you do your due diligence. Even if you think you know the person, have he or she give you references you can call to get the scoop on what it is like to work with this person.
4. Be clear about ownership.
Before you start any work or raise any money, make sure you and your partners are clear on who owns what percentage of the company. Make sure this understanding is written up in a legal document so there can be no misunderstandings later. You should make sure that each co-founders' stock is subject to a vesting schedule, so that if any of your partners leave the company later down the road, the company can retrieve some portion of his or her unvested stock. You want all partners invested for the long haul.
Yes, you can go it alone. However, take it from someone who has fostered a company both with and without a partner: The long, hard trek is much easier with someone to share the load.