Gilt Groupe co-founders Alexis Maybank and Alexandra Wilkis, Steve Jobs and Steve Wozniak of Apple Inc., Bill Gates and Paul Allen of Microsoft, Procter and Gamble’s William Procter and James Gamble.
Some of the world’s most successful companies were started by co-founders — matches made in startup heaven.
Starting a business with a co-founder is ideal for some, while others opt to launch their idea solo. But if you believe that it takes two (or more people) to make your startup a success, don’t forget to vet your potential business partner(s) and find out if he or she truly has what it takes. Whether you’re launching a new business or bringing on a co-founder for your existing company, here are five questions to consider before you partner up.
What’s your co-founders’ track record?
Have you ever read a trading disclaimer? For example, most financial investment products are marketed with the caveat that “past performance is not necessarily indicative of future results.” Despite this, the financial media’s assessments of funds and fund managers are often based not on prospects or qualifications but instead on their recent historical performance.
What’s your potential co-founders historical performance? Sure. It is not a guarantee of future behavior, but it can be used as a gauge – amongst others – to decipher a person’s mindset, ethics, commitment level, past successes and failures. Does your co-founder belong to any teams or organizations? Is he or she cognizant of how to contribute to a team and simultaneously make an individual contribution? How does your new business partner view past achievements and challenges?
Asking these types of questions can help you assess whether or not your co-founder is high risk – and if you can stomach the possible disappointment of your partner not meeting your high expectations. Learning more about your co-founders’ background can often put their startup potential in perspective.
What motivates your co-founder?
Is your co-founder motivated to launch a startup for money, fame, lifestyle, time, accolades? Why does your new business partner actually want to start a business? Understanding a person’s motivation – the “why” behind their decision — will help you decide if they’re a good fit. For example, if you partner up with someone looking for a quick exit and payout and you’re starting a company to manage long-term, you’ll both have distinctly different viewpoints and goals. Non-alignment to a clear company vision can only breed problems in the long-term. Vet potential co-founders by understanding their true goals and gaining clarity on your objectives.
Does your co-founder know how to execute?
There are plenty of talented professionals with specialized knowledge and skill sets, but the key question is this: can your prospective partner execute on knowledge? It’s one thing to know “what to do” and an entirely different thing to “actually do it.” Developing and sharing an operating agreement that clearly outlines roles and accountability will help you gauge if your new co-founder can actually deliver. Tactical execution, or a lack thereof, can make or break a startup. So, outlining what is expected – all of the daily dirty details – can act as a litmus test and possibly engage your new co-founder in a trial run.
What is your co-founders’ lifestyle?
What’s important to your prospective business partner? This may seem irrelevant, but the truth is this – understanding a person’s priorities will save you a lot of potential frustration down the road. Getting a good idea of the type of commitments, people and things that are a constant in your co-founders life is paramount. Your new business will face some of its toughest challenges during its early stages. Thus, an untrustworthy, non-committal, tactically-unavailable co-founder will only stand in your way.
Can your co-founder stay in their lane?
We all have areas that we excel in. Is your co-founder aware of his or her strengths and how to apply them to your new venture? Your reason for bringing on a co-founder should be to cancel out weaknesses and multiply efforts. If a prospective business partner is unaware of how to add value and insists on “weaving in and out of their lane” (i.e. not delivering on core competencies) you may find that discord is sure to follow. Decide upfront what contribution each co-founder will make – most importantly, how each of you can create value and mutually align to it.