When I started my first company, Rapt.fm, I struggled to find a co-founder. I looked all throughout my network, but couldn’t seem to find someone who both complemented my skill set and aligned on the mission I wanted to build (I eventually found a great one). After shutting Rapt down, I ended up joining Product Hunt as the first employee. As I was wrapping up my time there, my founder itch was growing stronger, and I found myself in this same familiar position: looking for a co-founder, but not knowing where to look. My logical first step was to leverage the network I had built with hundreds of makers and builders via the Product Hunt community. I started hosting a regular dinner series to get these people in the same room with others who were also exploring their next move, to see if we could all help each other. It turns out that really resonated. Through those dinners, I met incredible people who shared my same pain point — finding a co-founder was the bottleneck to their entrepreneurial aspirations.
As I sat on this idea, I realized how important that mission was, and I began thinking about how I could build a community to help others find co-founders and start companies. Eventually, that dinner series expanded all around the world and became what we know of today as On Deck.
At On Deck, we think a lot about how to engineer serendipity and help people find the best co-founder, so as a follow up to last week’s piece on recruiting, this week we’ll discuss how to be successful in your co-founder dating journey and find someone who’s right for you.
What to look for
Like any other recruiting process, it’s important to have a scorecard of attributes you’d look for in a co-founder — in a two co-founder scenario, you’re each essentially hiring each other. A good co-founder should be someone who can (1) help you solve core risks to the business and (2) agrees with you on first principles on company building.
But before we go any further, for those readers that are currently looking for co-founders, take a minute to open a clean Google Doc or Roam page and jot down some notes on what you want in your dream co-founder. What values does this person embody? What skillsets or unfair advantages does this person bring to the table? What are your non-negotiables as it relates to working style or aspirations?
After doing that, let’s look at what it means for a co-founder to help de-risk your business. Different businesses have different risks associated with them which various unfair advantages can help mitigate. In enterprise healthcare, for example, the most effective unfair advantage might be specific relationships; in deep tech it might be unfair technical know-how, and in certain domains it might be unfair domain expertise. Regardless of the company you’re building, you want to bring on a co-founder who helps address the right unfair advantage your team needs to win. You should ask yourself, “How do this person and I, together, have an unfair advantage to build this company?
Leo Polovets has a great analogy here around triathlons, which he shared during an On Deck workshop. If you’re a top 2% runner, top 2% biker, but don’t know how to swim, that’s not going to go very well. Upleveling your team’s skill set by improving from a top 2% runner to top 1% runner also doesn’t solve the core risk. You’d still drown. Bringing someone on who is a top 30% swimmer would leave you better off than if you go about it solo, as you’d now actually have a shot at finishing (or winning) the race.
While some entrepreneurs only look for co-founders with complementary unfair advantages, sometimes you might want to double down on one unfair advantage. As one example, both Product Hunt, On Deck, and Village Global’s early teams had some complementary skill sets, but we mostly doubled down on community building.
In addition to skill-sets, you also need to align on motivations. You should have complementary answers to the following questions: What does success look like, not only for each individual co-founder, but for the organization at large? Is this a 5 year thing or a multi-decade thing? Are you motivated more by solving a specific problem or working with a specific customer? Are you open to pivoting? Will you have a design driven culture or a data driven culture? It’s important to know your non-negotiables before you get married, so speak candidly with your prospective (or current) founding team to ensure everyone’s values and mission are aligned. And to be sure, you’re still “dating” until you’ve raised venture money or made long-term commitments to customers. Then you’re married. Before that you can break up with no harm done. But a seed round is a real commitment. There's a real social cost if you back out after that.
After you’ve found value-mission alignment with your founding team, you and your co-founders should align on company executive structure. Who makes the decisions? How will you handle conflict? What tradeoffs will you accept vs. not? What are your personal and professional needs, and how does this co-founder and company reflect & contribute to those needs?
The first step in the co-founder process is knowing what you want; the next step is to build a process to lock in that dream co-founder.
There’s this trope that you should only start a company with someone you’ve known for a long time — your best friend, someone you went to school with, or someone you’ve worked with in the past. While this is a great pool to start with, if you want the best fit, it shouldn’t be your only pool. Expecting people to know their co-founder for years prior to starting the company is sort of like saying you could only date someone you were friends with for a long time, which by definition would rule out all new "dates" entirely.
Indeed, the co-founder dating market has some similarities to the dating market more broadly. Several years ago, people were embarrassed to say they met their spouse on a dating app, instead telling folks they “met at a bar.” Today, we see the prominence of dating apps worldwide, proving that a curated app sounds a bit more thoughtful than the randomness of a bar. I think the co-founder search will see similar changes over time — we’ll laugh at how we preferred the randomness of school to an app or program.
To be sure, we should be realistic about the effectiveness of our processes to date: just like many marriages end up in divorce, the biggest reason startups fail—aside from never reaching PMF—is due to co-founder issues. So it’s worth rethinking the dating/matching process from the start so you can set yourself up for success.
So how do you go about this co-founder dating journey? In my last post I talked a bit about thinking of recruiting as a funnel. Here’s an excerpt I’ll cross-post:
If we’re thinking of recruiting as a funnel — if you don't have a good enough top of funnel (a broad enough applicant/candidate pool), then you end up compromising at the bottom of the funnel (the person you actually end up hiring). You want to have a top of funnel that’s wide enough that you can capture all the quality people who may fit the role while being curated enough such that you don’t spend exorbitant amounts of time reviewing applications — remember recruiting is only one part of building a business!
To build a top of funnel, make a list of people you want to work with some day, and then systematically hang around the hoop until the stars align. As everyone knows, the best candidates are passive, and it will take years to recruit them. You want to be the first person they go to when they’re looking for career advice. Earn their trust by giving them disinterested advice, and offer to introduce them to other companies even if they’re not ready to join yours.
One trick is to build a structure such that you can catch up with these people regularly and introduce them to each other. I did this accidentally by having a bi-annual retreat over a few years for friends and people I wanted to get to know better. Nearly half the On Deck team came from that retreat. The powerful thing about introducing people to one another is that, when you hire a few of them, they already know each other well. This is invaluable: A high-trust, high-communication culture can significantly increase organizational output.
Finding a co-founder is quite similar to recruiting any other hire, but with more gravity behind the decision. You might want to do two things in parallel. First, as mentioned, have a sense for what you’re looking for in a co-founder: specific skill sets, interests, personality types, etc. Second, expose yourself to serendipity. If you’re not sure what idea you’d like to work on next, you might want to expand your net so you can be exposed to new ideas.
Aside from hanging around the hoop, as we discussed last week, the best ways to build your top of funnel are to:
Tell the world what you want to do next — Write a blog post detailing what you think you might want to do next, what spaces you’re interested in, or what types of conversations you’d like to have. Email that post to your network asking for referrals.
Join communities that will expose you to new prospective co-founders and people who can introduce you to them, like On Deck
Build an audience — you’ll have to sell a product or service at some point, so having an audience will be immensely helpful; not only to generate revenue, but to find your co-founder when the time is right. Start a newsletter or a podcast on a niche topic; whatever you do, ensure that it fits with and augments your personal moat.
Once you’ve built a top of funnel, systematically prosecute your funnel. Get to know people over initial exploratory meetings. If you get a good vibe and strong backchannel, consider proposing whether exploring startup ideas makes sense. This could be committing to working on a project together over a weekend hackathon or some other predefined period. Or going on a road trip, or, depending on life stage, even living together for a period of time. Meet their spouse and/or parents if you can, and see how people interact with the prospective co-founder in a non-work related way.
The goal is to test the relationship as soon as possible, so you can both respect each other’s time if it’s not a fit. When Matt Clifford went on my podcast, he raised an important point around cutting your losses: when most founders decide to start “co-founder dating”, they have an extremely high bar for who they decide to work together with, which means there’s also a high bar for reversing that decision. So the switching cost is quite high, and this results in many sub-optimal co-founder pairings staying together when they’d really be better off parting ways.
So to scope out these attributes, here are some non-obvious questions worth asking prospective co-founders:
In what ways are you crazy? What are your failure modes?
What was it like working with ex co-founders/colleagues?
If this didn't work out, why not?
What's most important to you? (Money? Managing people? Building an audience? etc.)
What are your long-term goals in life?
Who should be CEO? Who has the vision?
The key is to be real with yourself and your co-founder — after all, you’re going to be effectively married to this person for at least a few years, even longer if the company is successful! Let go of your ego, and don’t insist on being right all the time. Respect each other’s strengths and give space for each other’s emotional needs. Most importantly, make sure everyone’s concerns are taken into account as you negotiate explicitly about who has responsibility for which decisions.
The main role to figure out is the CEO. If you’re unsure which co-founder should take the position, ask yourself: Are you going to be the co-founder who has clarity around the vision? Or will you be the co-founder that’s going to build or support that vision? The one with the clarity of vision should usually be the CEO. The worst case scenario is that both co-founders think they’re in charge of the vision and constantly butt heads over the direction of the company.
Some believe the best way to mitigate decision making conflicts is to split co-founder equity 51/49, such that one person is a clear decision maker, but I disagree. My ideal co-founder split is 50/50 equity while also clearly maintaining that full decision making authority goes to the CEO — unfortunately, as great as the idea sounds on paper, having “co-CEOs” rarely ever works. That said, this strategy enables co-founders to be genuinely equal partners while also mitigating committee decision making.
Other things to discuss early on include 1) personal runway — how many months a founder can live without salary — 2) how each person hopes to scale with the company, and 3) other extenuating life circumstances. You don’t want to go too far down a path without knowing that your co-founder has compromising health issues, to bring up one example, without being able to prepare for it in advance.
Regarding your dynamic with your co-founder: You don’t need to be best friends with your co-founder (or even friends at all, for that matter). You need to respect & trust each other, communicate effectively, and work well together in accomplishing company goals. And not dread solving hard problems together, especially any conflicts. One litmus test is “Pick a co-founder you’d be OK breaking up with.”
If you do choose to work with friends, make sure you’re not blinded to their compromising flaws that may not have come up in your friendship. Perhaps you bring in an unbiased third party to interview the prospective co-founder on your behalf. Share your “co-founder scorecard” with them, draft some interview questions, and then interview the person yourself to compare what you heard from your third party. Whatever you can do to remain unbiased in your decision, the better your decision will be. Also have a pre-mortem where you clarify that, for the duration of the company, you won’t compromise the company for your friendship, and will have to separate if it doesn’t work out, and that you hope you could still be friends in such a case.
You should also consider what to do about late co-founders — long story short, if they’re truly a co-founder it should be reflected in their equity split. To give a personal example, I spoke to a portfolio company CEO who was planning on giving 50% to a co-founder, but then raised some money and only planned to give 5% even though they had no product and their co-founder was going to build it. While this obviously seems unfair, the truth is that people often have mental roadblocks around giving late co-founders equal equity, because they didn’t take the same risk or have the same opportunity cost in starting the business. My advice is to be pragmatic: If you think giving up 50% to this person will make your diluted equity more valuable than if you gave 1% to the best first employee you could get, then it’s worth giving up to 50% (or 33%, or 25%). As much as we’d love to believe otherwise, the default scenario is that your company will fail, so anyone who can materially de-risk a company is worth swallowing the pride (and equity). When you’re going public in a decade, you won’t think about the first few months where you put in extra work for no pay.
There’s no magic number for how many co-founders a company should have, and, personally, I’m fine investing in and supporting solo founders. One clear benefit is the increased space on your cap table for early hires — you can afford to give very generous equity packages to early hires as a solo founder. Having five rockstar early employees might outweigh the value of one true co-founder. And believe it or not, many co-founders end up leaving the companies within the first couple years, leaving you with dead equity that might have otherwise gone to highly sought after employees. Another benefit is lack of conflict that could arise from a second co-founder; while it may be tougher for this solo founder to sanity check themselves, there’s still the possibility that they’re even more steadfast in their vision, given their own biases, for better or worse.
Another idea regarding building your early team: You may even consider calling your first ~3-7 employees the "founding team," as it might help you attract better people who are also more bought in. If you do this, kindly ensure they know they're not necessarily a true co-founder — you’re instead glorifying their position as a first employee. The challenge arises when/if those people get undue moral authority in the org if they don't scale.
Since co-founder problems are the main cause of startup failures, if we minimize them we can maximize time spent on finding product-market-fit. Remember that co-founder relationships are just like marriages, and they should be treated as such — something you work on consistently. Read relationship and communication books (Nonviolent Communication, for example), see a relationship/professional life coach or therapist, and date first to “try before you buy.” But just like marriages, if it’s too much work, it might not be a fit — and that’s ok! As with romantic relationships, there are always other fish in the sea. Find someone with the same values, mission, and work ethic as you, and you’re one step closer to building the company you’ve always dreamed of.
To see this post in deck form, click HERE.
If you want a very detailed step by step program to find a co-founder (see below), consider The On Deck fellowship
Thanks to Brandon Taleisnik for contributing to this piece.
Read of the week: The Decline and Fall of Conservatism. Reminded me of separate (oversimplified) quote I heard recently “The right always think they’re winning but they’re actually losing—The left always thinks they’re losing but they’re actually winning.”
Until next week,