

Starting Up: 1 or 2, 3 is Too Much - alanthonyc
http://www.bothsidesofthetable.com/2009/12/01/hiring-at-a-startup-know-your-weaknesses/

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pg
"Well, duh, if you have 3 equal co-founders you personally have just diluted
by 66.66% and you haven’t even raised a penny!"

This argument is mistaken. If the third person can do as much work as each of
the first two, they will each have less of a proportionately more valuable
company.

If the dilution argument were correct, the optimal number of founders would be
1, and that is certainly not true.

We find from experience that 2 or 3 founders is optimal. If famous companies
more often have 2 founders than 3, it's probably mostly because people who
want to start their own companies are rare; obviously clusters of 2 are going
to be more common than clusters of 3.

~~~
alanthonyc
I agree with your point on dilution.

The problem is that finding a co-founder with the requisite skillset,
motivation and personality match is hard...it's almost like finding someone to
marry. However, I know need at least one. The sheer amount of work to be done
makes it a necessity, especially while I'm finishing out my current contract
as a consultant.

But until I find the right person, it's going to just be me, slogging away.

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alanthonyc
_"I recommend that you start a company by yourself and own 100% of it. Once
it’s set up I recommend bringing in a co-founder and giving them 10-30% of the
company depending upon when you bring them in. I advocate treating them like a
co-founder in every way except when they join and how much equity they get."_

I'm glad he said this. This has been my plan, not so much by design but just
by circumstance, but it's nice to have validation.

~~~
pchristensen
Ditto. I hadn't heard anyone specifically endorse this before, but it's what
circumstance gave me with my startup. It's a good way to do a 2-person startup
with no danger at all of a power deadlock.

~~~
Periodic
I've heard the recommendation to never equally share power or you will risk
deadlock. Always agree to either have a neutral arbiter or go with the old
51/49 split so that if it ever comes down to it the issue can be decided
decisively instead of resulting in delays and over-compromises.

~~~
nathos
Is it possible that having to use one's 2% majority share to force a decision
is just as bad as a deadlock? (as far as affecting morale, a founder leaving,
etc.)

We've had the 51/49 split driven into our heads for so long, I wonder if
anyone out there can share the ramifications of actually having to use it.

~~~
dstorrs
My co-founder and I took a different tack: "50/50 and a quarter".

\- 50/50 split on equity

\- Decisions are made by consensus when possible (so far, always).

\- If we absolutely cannot agree, we flip a coin (a quarter)

\- If either of us decides to leave the company, the other must buy him out.
So, if we ever actually get to a coinflip decision, we just ask ourselves "do
I care about this so much that I'm willing to walk if I lose, or will I live
with it?" Whatever the answer is, the decision can go forward.

~~~
eru
Do you use the shotgun clause for buyouts?
(<http://en.wikipedia.org/wiki/Shotgun_clause>)

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Periodic
I think there may be a danger in labeling yourself based on your weaknesses.
It could lead to subconsciously shutting down options because they involve
your "weakness". Essentially, if you don't explore your weakness and try to
gain strength in that area then you risk letting it atrophy.

For example, if you're a "technically-savvy, introverted programmer" and you
hire in a "outgoing marketeer" to handle all the customer relations then you
may find that you loose touch with customers and loose sight of the company as
a whole.

~~~
cadwag
While it is true that anything you don't exercise will atrophy, like you said,
but - at the same time - you can't be a master at everything.

The person that can be a master programmer and a charismatic salesmen is very
rare indeed. In fact, so rare that I would be surprised if they exist at all.

So I agree, you shouldn't completely ignore tasks that don't fall under your
speciality; but also, work on those tasks only enough to maintain a certain
level of competency and skill. Then you can hopefully stay in touch enough and
not "loose sight of the company as a whole."

