Reading: How to choose your co-founder(s) – and where to find them8 min
How to choose your co-founder(s) – and where to find them
Soaked by Slush – 365
© Annika Leppäaho
Getting a startup off the ground is about more than having a good idea. Managing a company from setup to success can become quite a challenge for a single founder. How should you proceed if you want to get one or more partners on board? Melanie Gabriel, Co-founder and CMO of the Swiss FinTech scaleup Yokoy takes a closer look.
Expect to learn:
- Know what to look for
- Putting yourself out there
- Making the relationship work
Steve Jobs, Bill Gates, Mark Zuckerberg – be it Apple, Microsoft, or Facebook, many of today’s big tech corporations are associated with one founder, a charismatic personality behind a groundbreaking idea. But while their names are strongly linked to their company, all of these examples have one thing in common: Jobs, Gates, and Zuckerberg were not going at it alone when they established their business. They had co-founders at their side that played a crucial role in shaping the journey right from the start.
Looking at the stories of these companies, having a co-founder does not seem that bad of an idea. In fact, it is a pretty good one. Simply put: building a business from the ground up is hard. There are many questions you have to find the right answers to and many uncertainties to overcome; all the while, success is never guaranteed. For founders who fly solo this means a huge amount of responsibility and a lot of pressure every step of the way.
With a partner – or partners – in crime it becomes much easier to manage the ups and downs of getting a startup off the ground. You are all sitting in the same boat and thus reduce the mental strain of having to do everything on your own. Having a co-founder also eases the burden of having to make difficult decisions, because you have someone to bounce ideas off and do not have to carry the weight of the outcome all by yourself.
These very considerations also led us to build our company Yokoy as a team. But while two or three founders might seem “normal”, we have gone a little beyond scope and have five founders on board. This required all the more careful deliberation on how such a partnership should and would work.
If you are in the game of looking for a co-founder, let’s dive deeper into two key questions: 1) What do I have to look out for in a co-founder? And 2) how do I find one?
Know what to look for
Setting up a startup comes with a whole lot of uncertainties. Does your idea really fit the market? Do you solve an actual problem? Is technology far enough along to make your idea actually feasible? While there is no surefire approach to turning your idea into an actual success, the same applies to finding the right co-founder. In short: there is no secret recipe for you to follow. But there are a few factors to look out for when you start your quest.
1# Make sure you complement each other
When it comes to skills, we made the experience that it helps to not have too similar profiles but rather look for someone who complements your expertise. Finding the right balance is key here and also depends on the sector your business is operating in. For instance, if you are a technology expert with a great idea for a software product, you might want to focus on finding somebody with a deep business understanding. Thus, you avoid that you end up standing on each other’s toes and arguing about responsibilities and competencies.
In fact, having complementary profiles is what made the setup of Yokoy actually possible in the first place. We all have a pretty distinct field of expertise, from software development, sales, marketing, and finance. Therefore, it was clear from the start who will focus on what and who takes over which role. For a comparatively big team of founders, such a clear separation of competencies is especially important. Otherwise, you will be more focused on infighting than getting anything done – something you might work out more easily when you are just two or three co-founders.
Of course, your co-founder also has to be a fit from a personality standpoint. Investors do not just invest in ideas, they invest in the people behind the idea. Therefore, make sure to find a co-founder who is heading in the same direction as you. Ultimately, it is all about having the same mindset – only then can you overcome the odds.
2# Make sure you share the same values
When looking for a co-founder, you have to align on values. What should your company stand for? What should be the core pillars of your company’s culture? What is important to you as a leader? All of these questions are something you have to first get straight for yourself. This requires brutal honesty because only in this way will you identify the things that are not negotiable for you. It is never a good idea to compromise on values – especially if you have to work with your co-founder for years on end.
At Yokoy, we had these discussions right from the start. One value we put a lot of focus on from the beginning was diversity, whether that be in terms of education level, age, gender or ethnical background etc. This was due to our conviction that great innovation happens when there are people with different backgrounds sitting at the decision table, shaping the product and the company.
Related to that, another foundational value for us has been taking care of our culture. You can have the best product and the best timing, but what really makes the difference between good and great startups is the people.
3# Make sure you share the same vision
Of course, every founder dreams of building a successful business. But which path do you want to take? Do you want to take a more steady and slower approach to growth and mitigate risk? Or do you want to think big, go all in right from the start and grow quickly? Your vision of how you want to build your business is key – and you have to check if your co-founder is along for the ride.
At Yokoy, we were quickly at the point of going all in. We decided to look for venture capital to fund our vision and growth. From 1.7 million Swiss Francs in seed funding, we went to a $26 million Series A and an $80 million Series B round. All of this would not have been possible if all five of us were not fully committed to this approach.
Put yourself out there
Finding the right co-founder is about connecting with the right people. All of us founders at Yokoy already had previous experience working in different startups and corporations, and it was these experiences that ultimately brought us together as a team.
Our CTO Devis Lussi, who originally had the company idea, has been a friend of mine for over a decade. We were originally brought together by common friends and our passion for mountain climbing. Meanwhile, Devis knew Philippe Sahli, our CEO, back from his work at EY. Philippe knew Thomas Inhelder, our CFO, and Lars Mangelsdorf, our CCO from his time at the Swiss scaleup Beekeeper.
For us, existing networks then played a central role in bringing us together. But this does not mean that you necessarily need previous work experience or even an already existing network to find a co-founder. In the end, it is about getting your idea out there. Maybe you have worked with somebody on a project at school or university; maybe you are going to relevant industry events; maybe you are taking part in formats such as co-founder speed dating; or maybe you are building your network on LinkedIn.
What you should always be clear on is what a co-founder should bring to the table. This is where the factors mentioned above come into play. What complementary skills do you need, what values should you share, and what vision do you have for your startup going forward?
Some parting advice
Put a ring on it
Finding a co-founder is only half of the story. Because afterwards, you get down to the nitty-gritty of how you want to work together. This is mostly about defining the key responsibilities of everyone involved, which should not be that hard if you decided to go with a complementary co-founder.
And never forget the equity topic. How do you want to divvy up the shares? You should put all of this down in writing right at the start. Because when money is involved, conflicts can quickly arise and things might get ugly.
Communication is key
At this point, you might have guessed that communication is the decisive factor during the entire search for a co-founder. You have to communicate openly and be willing to speak out even unpleasant truths among each other. In the end, it is all about trust, which must be present at every step of the way.
And finally: there is no need to rush – take your time. All of this might have sounded a little like dating advice and, to be honest, finding a co-founder can feel like that at times.