
The Co-Founder Relationship - kawera
http://avc.com/2018/01/the-co-founder-relationship/
======
thesausageking
The startup cult is wrong about this. It's much better if founders can "keep
it in the family" and always work out any issues among themselves, with a
trusted person not connected to the company, if needed. Once investors and
board get involved, they may use the instability against you.

Fred (avc), has done this a number of times in the past. One well-documented
example is detailed in Hatching Twitter. While Ev was CEO of Twitter, Fred and
the board told Ev he was doing a great job. At the same time, they were
secretly meeting with Jack to engineer the plan they would later carry out to
push Ev out of Twitter and bring in an outside CEO.

------
dahart
> Founder conflict is pervasive in startup land but is not discussed very
> often.

All the options discussed in the article are last resort. I'd love to see some
more coaching about what the causes are, how to identify it early, and how to
handle it _before_ it's a real problem.

My experience as a co-founder is that very minor differences in personal
agendas between two people can turn into large problems later, even when the
two co-founders are respectful, honest, diplomatic, and willing to compromise.

I'm sure it's a lot like bands, how the majority of them break up over
"artistic differences". Everyone has their own reasons for doing what they're
doing, and they line up exactly with other people's reasons almost never.

I'd love to hear about how to identify misalignments early, because I've tried
and I find it _very_ difficult. Everyone's excited early on and trying to
avoid conflict, myself included. I'd love to hear about what to do about it
when misalignment is discovered, it's not obvious that there's a solution -- I
can't change the reasons I joined a band or launched into a startup, I can't
expect someone else to modify their hopes and dreams just because mine aren't
the same.

~~~
gfodor
Spot on. In my last startup failure I think there were two major lessons:

\- You can never really be sure of your co-founders personal goals or
priorities until there is a crisis situation that forces them to be surfaced.

\- In crisis situations, nothing else matters more than power structures, both
formal and informal. (Conversely, outside of crises, power structures
generally lurk beneath the surface while ths sun is shinning.)

Tactical lessons would be to ensure any venture you are a part of you are
hedged from finding yourself behind a single-point-of-failure in the power
structure, be it a co-founder, an investor, a partner, or a client. Always
have an escape hatch or at lease an assurance than in any particular crisis
you will have options to influence the outcome, and not be gated by a singular
entity's decisions or influence.

~~~
jeffmould
_You can never really be sure of your co-founders personal goals or priorities
until there is a crisis situation that forces them to be surfaced._

100% accurate and I would say is probably the root of most founder breakups.
It is easy to say you are "in it together" and your interests are aligned when
everything is going well. But the minute something happens that has even the
slightest potential to impact someone's personal goals or priorities, the
spirit of being in it together can easily fly out the window. I believe that
human nature makes this piece inevitable to some extent. People can naturally
grow defensive when their goals or priorities are threatened. I think the
bigger problem comes when that person hides that from the other founder(s).
They continue to put up a front by saying that everything is ok, but their
actions tell a different story.

------
neom
Speaking from experience. Talking to the board when you're not a founder or on
the board can be a very very delicate things and is likely to get you fired if
you approach it incorrectly. I'd recommend taking _one_ board member out for a
coffee and really posing it as asking for advice, not asking the board to get
involved. I would also advise against doing this behind the CEOs back. That
being said, getting board advice can really help you see how to support the
founders more meaningfully.

~~~
sillysaurus3
This comment bothers me, but I can't quite put my finger on why. It's not you
– your intentions are quite good. It's valuable information.

I think it's bothersome because it's true. And that reveals just how
subservient employees actually are. If you're an employee, you're servile. It
permeates everything you do, and the way you're forced to interact and think
with everyone around you. But especially those above and below you.

In fact, "above" and "below" you are artificial terms. We're all people. Yet
some people are more special than others.

It's very hard to want to participate in such a system. But this is a personal
flaw of mine.

~~~
20180201
that's a very pessimistic view, and one that doesn't take into account the
reality of being an executive or board member.

i'm a co-founder/executive of a small technology company. i have employees
that used to be in my position when they were younger, but now they want to
just do their jobs and go home.

in other words, they don't have intense, heated discussions about strategy,
make firing and hiring decisions, make large spending decisions, discuss the
financial bookkeeping side of the business, try to raise money from or sell to
really unpleasant people, soothe angry customers and employees, because _they
don 't want to_. they don't want their work day interrupted by a bunch of
anxiety-ridden executive half-conversations and rants with no real conclusions
or answers.

almost none of their personal money is on the line, and very little of their
potential income is on the line. they can go and find another 100k job
tomorrow, they could possibly even make MORE money at their next job just by
the dumb luck of losing their current one. did you ever think about that?

but... now here's the part you won't like: the reason you hold your opinion is
because you want something more than what you have now. and that fundamental
mis-alignment is going to cause you some level of frustration, because you
think of yourself as a shot caller, when you aren't (or, more specifically,
don't have to be). and when you're told what to do you get resentful, because
you think you know better. well, maybe you do, maybe you don't. but you don't
write the checks, and that's what a business is.

if you want to be involved at the upper levels, nothing is stopping you. you
just need to either find that job, or create one for yourself.

stepping into conversations in which you have no context and no skin in the
game is a real fast way to get yourself shunned because you have shared NONE
of the downside but you walk in the door like you have all the answers. quite
frankly, that's bullshit. and quite frankly, even if it isn't, you don't have
any influence in that situation so it's irrelevant.

~~~
csa
> stepping into conversations in which you have no context and no skin in the
> game is a real fast way to get yourself shunned because you have shared NONE
> of the downside but you walk in the door like you have all the answers.
> quite frankly, that's bullshit. and quite frankly, even if it isn't, you
> don't have any influence in that situation so it's irrelevant.

If you have any good investors, and at this point I somehow doubt it, this
comment just made them shit in their pants and/or write off their investment
in you.

I strongly encourage you to learn to listen to the folks around you carefully,
especially the experienced ones. Sometimes the folks with no skin in the game
are the only people who will give you an accurate picture of what’s going on.

If you are “shunning” any of your employees for any reason, then you’ve got
major problems.

If you don’t think experienced (older) people don’t have at least some of the
answers and treat them accordingly, then you’ve got major problems. This is
true even if they don’t come in with a perfect attitude — note that attitude
can usually be fixed with gentle prodding from a skilled leader.

If you think that one has to have (significant?) exposure to downsides to have
any of the answers, then you’ve got major problems.

If you haven’t given your employees enough information and enough autonomy to
help move your company in the right direction, then you’ve got major problems.

Best of luck... I’m afraid to say that I think you will need a healthy dose of
it.

~~~
Spooky23
So you think it’s a good idea for employees to go to the board with a position
out of sync with management and bypass the management chain?

I’ve never seen any place in business, non-profit or government where that was
a scenario that would benefit the employee unless the employee was very
politically savvy, was in a very senior position and had special circumstances
(past relationships, etc)

~~~
csa
> So you think it’s a good idea for employees to go to the board with a
> position out of sync with management and bypass the management chain?

The article says very specifically:

"The team underneath the founders should feel like they have the right, and
the responsibility, to talk to the Board and investor group when founder
dysfunction gets really bad. In general the idea of the team going around the
leaders to the Board is a big “no no” in startup land, but there are a few
places where that needs to happen, like outing illegal or dishonest actions,
or harassment. Likewise, if the co-founder relationship is so bad that the
company is being seriously harmed, the team should feel a responsibility to
come to the Board with that information."

I stand by this.

~~~
notyourday
The article is written by a VC trying to protect his turf. Lying is rampant in
startup world, up and down the chain of management. It is also routine in the
world built around startups. VCs lie to execs. Execs lie to leadership.
Leadership lies to management. Management lies to rank and file. In our
politically correct culture it is just not called "lying" \- it may be called
"accelerating" or "explaining" or "moving the needle". This, in turn, creates
a situation where everyone with an ounce of brain and common sense needs to
figure out not just a real picture but a real picture as seen by every layer
of organization or players.

I especially take issue with this:

"The team underneath the founders should feel like they have the right, and
the responsibility, to talk to the Board and investor group when founder
dysfunction gets really bad. In general the idea of the team going around the
leaders to the Board is a big “no no” in startup land, but there are a few
places where that needs to happen, like outing illegal or dishonest actions,
or harassment. "

Had this been the case we would not have had scandals at Zenefits and Uber.
The big no-no in a startup land is no stop looking like a cash cows for VCs.

------
alain94040
If you want to have fun for a second, I collected some co-founder issues from
famous startups, based on court documents filings. You can read it here:
[http://thestartupconference.com/2016/05/13/famous-co-
founder...](http://thestartupconference.com/2016/05/13/famous-co-founder-
issues/)

Don't make those mistakes -- easier said than done. At least in the case of
early stage startups, I'm not convinced that the board can help. And early is
when co-founder issues pop up.

------
winslett
Nails it...

> The co-founder dysfunction impacts everyone in and around the company, but
> mostly the team underneath the founders. It is like being in a family where
> mom and dad aren’t getting along. There is stress and strain, messed up
> decision making, and everyone is walking on eggshells.

I’ve been apart of an org suffering from founder relationship dysfunction. It
was detrimental to achieving potential and took a toll on everyone
emotionally. Frankly, it sucked...

There are disagreements which will happen...which is child’s play compared to
this experience. There were attempts to undermine the performance of the team
to derail the success of particular founders. One founder would shut down like
a child when another founder had control. There is “ not getting along” which
is okay, and there is “locked in a death cycle of subversion.”

Another startup I’ve been part of had the quote: “do you know what kind of
ship doesn’t float? A partner-ship.” He’s a reasonably successful loner-as-a-
founder because he’s been burned so badly in the relationships.

~~~
winslett
‪If you know me and you know the experience, I don’t think any one person was
to blame in that scenario. It took behaviors from a participants involved to
make it as painful as it was.

The example I gave of subversion wasn’t just one bad actor—it was all
involved.

------
hitekker
Correct me if I'm wrong: wasn't it YC that said that most startups die because
of internal as opposed to external problems, and of those problems, founder
conflict ranks near the top?

This article has some good ideas, but I'd be more wary of coaches; they can be
enablers instead of arbitrators. Even more so than marriage counselors, I see
incentive for them to act on behalf of one side instead of the company as-a-
whole.

That's what I observed in one of my previous gigs, where the coach served as
half-inquisitor, half-message-therapist: interrogating senior staff with
subtle questions like "who are the enemies of the founders?", "Who is against
the company?, while reassuring the CEO of his own enlightenment.

To be fair, this life coach wouldn't have been paid if they told the CEO the
truth.

After all, who wants to be told what they already know?

------
hoodoof
I have wondered why Paul Graham is so adamant that having cofounders are
better than single founder, when cofounders seem to be a key reason for
startup failure.

I would have thought that the preferred option would be single founders.

~~~
nostrademons
Single founders introduce a few other common failure modes that are alleviated
by having cofounders: giving up, mental health, stamina, running out of money,
and missing the market opportunity. It's like you can trade one big point of
failure - cofounder dysfunction & breakups - for death by thousand paper cuts.

(Note also that institutional stakeholders would usually _rather_ have a SPOF
that they can identify and intervene in, rather than a bunch of little failure
points that might sneak up on you and are very difficult to stave off. This
may or may not be in the interests of the individual founder, who often has an
information advantage and better mitigation strategies for identifying and
counteracting these other failure points.)

~~~
toomim
This is a good point. Single founders fail when the single founder has
problems. Relationships fail when both individuals have problems.

The value of a co-founder is that they can cover for some of your problems.
But likewise, a co-founder can also introduce problems, and if their problems
interact with your problems, then the relationship turns sour and you suffer a
divorce, which can be its own problem, and tear the company apart.

------
madaxe_again
Oh boy. I could write about this ad infinitum, so I’ll keep it as brief as I
can.

I left my business a bit over a year ago, and while I can cite dozens of
immediate issues as the reason (literally dying from stress and anxiety -
hospitalisations, inadequate compensation, dissatisfaction with direction),
the fundamental problem was the relationship between me and my cofounder.

We were always a slightly odd pairing. We'd known each other since childhood,
drifted apart, and drifted back together 12 years ago through a shared passion
for making neat and innovative stuff - namely e-commerce sites. He was design,
I was code. Simple stuff when it was two of us.

We grew, our roles shifted. He ended up orchestrator, managing day-to-day
production, and generally ensuring that the team pulled together efficiently.
I ended up sales, hires, customer relationships, strategy, and driving the
technology - we built a nifty platform that allowed more efficient production.
It worked well enough - he was good at tactical thinking, me strategic.

Where it fell apart - friendship, and our differing approaches to it. I
covered his ass day in, day out, to clients, staff, and the investor who came
in in our sixth year. I protected him from himself - and took the fall for
pretty much everything that ever went wrong, as my attitude is that if nobody
will take responsibility, I will, as only then can we actually do anything
about it. I even did this when he actively undermined initiatives agreed upon
in board meetings, damned fool that I am.

In return, he gaslit me and threw me under the bus, daily - and I never did
anything to let him know this wasn't OK, as I still saw the fragile boy who'd
had a tumultuous childhood and had crazy social anxiety. On the odd occasion
when I did say "you broke it, you buy it", or "you need to tell the investor
why this isn't happening", he'd stonewall me and the rest of the company for
days on end. I never did figure out how to broach the topic.

Retrospectively, I got this really wrong - I should've let him suffer for his
errors, so that he might learn from them. Instead I shielded him from reality,
and took it on my shoulders.

I slowly but surely became a maniac - walking off the reservation when it got
too much, stoning myself to sleep every night, and finding myself going into a
full blown panic at the smallest things. I used to be, and am once more,
pretty much implacable.

The final straw for me was when I had to go and renegotiate all of our client
contracts, cap in hand, as we were overservicing for our fee schedule - mostly
because the technical initiatives that would've helped efficiency got
strangled in the crib in production in favour of short-term "wins" (not wins
at all), as nobody, not me, not the architects and dev leads who I'd hired and
nurtured could push back against him. I couldn't in good conscience send the
new client services director off to do this, as it would irrevocably taint
guide relationship with clients, and I already knew the writing was on the
wall for me, so him surviving me was essential if I was to leave the business
without it being a total train wreck - so off I went. There was a lot of
crying and shouting on clients' parts, and I had no option but to play officer
hardass. Had I some, any, support from him I would have weathered it - but
instead he gave me a hard time for upsetting the clients, and not a shred of
thanks when I'd come back from days on the road, getting clients to agree to a
100%+ hike.

Ultimately, the investor lost confidence in me, the clients all hated me, as I
was seen as the source of all problems, real and imagined, my mental and
physical health took a massive slide, and I was asked to leave. I did so,
gladly, and negotiated an exit which wasn't terrible.

The last year has been illuminating, insofar as 2/3 of the team has turned
over (30/45), they've gained only one client (I'd usually make 6+ £2M+ total
value sales a year), and lost a few.

I can't even feel schadenfreude over this, as it's my damn fault for not
stepping up and dealing with the elephant in the room - his and my
relationship - and everybody suffered because of it.

My next business, I'm doing alone.

Also, it's been great training for marriage, which I did shortly after leaving
- I fucked up royally with wife #1 (co-founder - not actually married, but
it's a very similar type of relationship), and am endeavouring to do it right
with real wife #1, by allowing her to make her own mistakes and learn from
them, rather than shielding and protecting, which is my first instinct.

~~~
cyberferret
Great lessons and advice in here. I have a question - did things change much
pre and post funding? Or did the toxic situation pretty much stay the same?

Reason I ask is that my current co-founder and I have an excellent working
relationship at the moment, and a part of me worries that if we raise funding,
it may impact on that somewhat - especially if we have other board members
etc. who will start to dictate how we should proceed etc.

~~~
madaxe_again
Good question. In short, no, funding didn't change things for the worse.

In fact, for a while, it made things better - when the investor took a more
active role in the day-to-day of the business, he provided a much needed
buffer between us. Our relationship was never necessarily bad, but the dynamic
was toxic for the business, as it impeded communication. Literally having the
investor (or his highly business-skilled minion) in the room helped no end. It
was when they went hands off that things went really funky, as while things
around us in the business had changed for the better, as well as our abilities
to grow and manage it, our interpersonal relationship still had the same
problems. Having an extra head in the room was a massive help, and was
actually the principle reason I'd been so keen on the deal - we didn't need
the cash (a whole other story over differences with him as to how to manage
finances) - but only when it was there. A monthly board meeting just wasn't
enough.

So - I can't say for absolute certain, but if you already have a good
relationship, it's unlikely to change. Just ensure you continue to be open
with one another.

Also, if they're good early stage investors, they won't dictate - they'll
advise.

~~~
cyberferret
Thank you again for your really insightful comment and answer. This is the
sort of stuff that should be front and centre in "Building A Startup 101". Co-
Founder relationships often get pushed to the bottom of the list, when it
should be a major factor in deciding if a business will be viable and healthy
moving forward.

------
ilamont
Don't work with a co-founder. Ycombinator, Fred Wilson, and others in the
investor community will frown, but if you can swing it as a solo founder (and
many people do) you are avoiding the Russian roulette that comes with pairing
up with someone else.

~~~
mooreds
There are very real costs to not having a cofounder though. Founding is hard,
I have no idea how solo founders handle the work and the emotional swings.

~~~
ilamont
Agreed, but I found the emotional swings to be much harder with a cofounder
than as a solo founder. As for the work aspect - either way is hard, the
challenge as a solo founder is making the right partnerships and outsourcing
where your skills are weak.

~~~
wolco
Why not have three or ten co founders? All could bring value in different
ways:

~~~
mooreds
Haha, I assume this was reductio ad absurdum. It's hard enough to make
decisions and to align 2-4 co-founders, I can't imagine trying to make any
kind of strategic (read, hard) decision with 10.

~~~
wolco
You would do what larger groups do and vote. Like a defacto board.

~~~
mooreds
Ah. Any group I've been a part of that was larger than 4 people wasn't making
real decisions by vote. Instead, a smaller number of folks (1-3) would
actually drive the decisions. Sometimes membership of that group rotated, but
more often than not it was the same folks, with other occasionally dropping in
to offer input, but not driving the decision in any meaningful manner.

Perhaps I'm a cynic, but I believe that's how things operate--unless lines can
be very clearly drawn (which is hard in a startup) a large number of decision
makers will lead to no decisions.

------
fictionfuture
This is why there is usually one clear leader on most "successful" founding
teams.

Cofounder situations are a significant risk which can and does outweigh the
benefits in many startups

------
lkrubner
When I am not a founder at a startup, the only times I am invited to talk to
the Board is when something has gone wrong. Then the founders are trying to
shift the blame on to me, rather than take the blame for their own decisions.
And even though I want to talk to the Board, I avoid these meetings, because I
don't want my first meeting with the Board to be dominated by the question
"Why is your software behind schedule?"

This has been discussed on Hacker News before, but again, here are a few brief
excerpts about how this relationship fell apart at a startup where I was at in
2015:

July of 2015

...All the same, a wave euphoria swept over John, which he communicated to the
Board Of Directors. Much later, I learned that at this time they began to
schedule their plans around the assumption that we'd be making significant
money by September. Again, though I can admire a sales team that aims to hit
aggressive targets, making such plans around a product that doesn’t yet exist,
and which seems to be running behind schedule, is delusional.

August of 2015

...But Twilio would be a very dangerous step for us. If John and the Celolot
Board of Directors really wanted us to ditch our iPhone app, this meant that
we would be 100% committing ourselves to English as our only interface — and
building a flawless NLP engine would be indispensable. There would be no
buttons, no forms, nothing to click on. Just words and phrases written in
English, submitted by innumerable users. And if we failed to build an NLP
engine that could understand all of it, then we were doomed. I thought NLP was
a fantastic supplement to traditional interfaces, but as a complete
replacement, it was a huge gamble. It was like jumping out of an airplane
without a spare parachute. Furthermore, if we had Hwan build us an app, then
we could customize it in some really cool ways. Special messages, special ways
of allowing data to be edited – things that are not possible with the standard
iPhone Message app.

September of 2015

..."I am asking a hypothetical question." I thought this was obvious, but I
was willing to emphasize the fictional nature of the scenario if it would calm
him down.

"But why would you ask that?" The intensity of his reaction was as if I’d just
asked him something obscene.

"Because I think hypothetical questions are important."

"I don't! I think working is important! Let's work hard and get this software
running!"

"I’m sure we’ll get it working at some point, but we have already seen many
unexpected delays." I pointed this out as calmly as I possibly could. "What if
we encounter another?"

"If we miss this deadline, I'm going to ask you to talk to Milburn [of the
Board]."

He threatened this as if it were the worst punishment he could imagine
inflicting on me. Like, if the prisoner does not break during waterboarding,
then we have them talk to Milburn.

"You don’t want to talk to him?" I treaded carefully. "You talk to him every
day."

"No, you can talk to him about this."

I was wary. It sounded a lot like I was being set up to take the fall for
John's bad decisions. A part of me very much wanted to talk to the board, just
to be sure they understood the real situation. I wanted to warn them about
Sital. I wanted to impress upon them the absolute urgency of the Conversation
FSM. But I didn't want my first real conversation with Milburn to be dominated
by the question, "Why are you running late?"

==========================

excerpted from here:

[https://www.amazon.com/Destroy-Tech-Startup-Easy-
Steps/dp/09...](https://www.amazon.com/Destroy-Tech-Startup-Easy-
Steps/dp/0998997617/)

