December 13th, 2023 | By: Wil Schroter
There's no perfect to know if you've found a great Co-Founder, but there are some really obvious ways to tell you're about to recruit a bad one!
Yet picking Co-Founders isn't something many of us will do more than once in our lifetime, so how could we possibly know what to look for? There's no absolute checklist, but there are 3 categories where most Founders don't press hard enough — Selection, Shared Cost, and Commitment.
Technically there's a fourth, which is "personality type," but that's so incredibly hard to determine in the early stages (see: all of dating and marriage) that it's almost not worth mentioning compared to the Big Three. If all of these start to sound way too familiar, it may be worth thinking about an exit strategy.
Whenever someone asks me whether the Co-Founder they are considering is a good fit, I ask, "How would you compare them to the other candidates?" knowing full well there never are any. Isn't it crazy that the single most important person we will ever "hire" often only needs to be the first to show up to get the job?
Of course, there's a reason for that — we're not exactly dealing with a long line of applicants! But that should be our first red flag. If we have next to zero options for who to hire for this critical role, is going "all in" on the first available person our best decision right now?
We don't have to go all in immediately. We can simply engage this candidate on a temporary or consulting basis as a trial (for both sides). Let's see if they show up for work 3 to 6 months from now before we give them half of our future net worth. It's OK — and preferable — to bail on a few bad fits before we find the right one.
When people say they want equity, what they mean is an upside. What they fail to realize is in the formative stages, we are all paying to go to work. So when a Co-Founder joins without being told they also have to shoulder their percentage of the cost, we're just waiting for the other shoe to drop.
The right Co-Founder will ask what kinds of expenses they need to absorb and calculate their ability to to so, and for how long. The wrong Co-Founder will either never ask (because they don't understand what Co-Founder equity means) or they will just assume the "company" takes care of expenses, not realizing that they ARE the company!
The way to make this work is to not only lay out the upside scenario but also explain what current and projected costs might look like, too. If our Co-Founder-to-be is scared off over shouldering $500 per month in expenses, imagine when the real bills start coming (like payroll).
There's an old saying in investment banking that goes, "If you can't come in on Saturday, don't bother coming in on Sunday." When people hear that quote, they simply think it means, "Oh my! We have to work on weekends?" but the spirit of that quote is much different. It means if you're not fully committed, no matter what, go find another job.
Startups are very much a "come in Saturday" type operation, whether we're working our weekends or not. There are very few Founders who don't understand this inherently, but getting someone else to understand it is very difficult to do. The perfect Co-Founder will outwork us. They are there on our metaphorical Sunday without asking. The Co-Founder we're going to dread is the one that clock punches out at 5 p.m. while we're still doing their share of the work.
There's no perfect way to gauge the level of commitment a future Co-Founder might have without actually seeing them work. That's why a trial period is always a good idea to see what kind of athlete they are before recruiting them to our team. There's nothing worse than finding out you've hitched your startup wagon not to a stallion, but to a donkey.
I’m Burnt Out. What Do I Do? When we hit a point of burnout it's important that we understand what to do about it. If we ignore it, the problem only gets much worse. So let's take a look at what Founders do to deal with burnout head-on.
How To Write A Business Plan: A Comprehensive Guide A step-by-step guide on writing a business plan to catch an investor's attention & serve as a guiding star for your business.
What if I Fired Everyone and Started Over? (podcast) As your business grows, everything changes. All things evolve, and skills must upgrade. This includes everyone in the entire organization.
Wil Schroter is the Founder + CEO @ Startups.com, a startup platform that includes Bizplan, Clarity, Fundable, Launchrock, and Zirtual. He started his first company at age 19 which grew to over $700 million in billings within 5 years (despite his involvement). After that he launched 8 more companies, the last 3 venture backed, to refine his learning of what not to do. He's a seasoned expert at starting companies and a total amateur at everything else.