Flourishing with co-founders, family and friends
Co-founders, family and friends can be blessings or curses or some mix of both. In all cases, as teammates these special people add a layer of complexity in how to lead your startup, yourself and everyone else on your team.
They are GREAT when they share the workload, are equally passionate about the vision of the business and its success, when they understand ‘you’, when they have complementary skill sets and personality traits, and when their personality includes an empathetic open-mindedness. When that co-founder is a friend that can ease the emotional stress associated with founding a business.
Co-founders are a curse when they disappoint you, fail to complement your strengths, distract you with their naiveté and neediness, no longer share the same vision or passion for the business, are stubborn, unempathetic to you or your teammates, and cannot make up their mind, or constantly change their mind. And if they become an ex-friend or ex-lover then they add an emotional tension to the workplace that distracts everyone from being as productive as possible and undermines the coherence of any culture.
Choosing whom to work with
The common wisdom is that you want to select a cofounder with complementary strengths, skills, and personality. The complementary personality should include being open and agreeable.
You can find many other prescriptions for what ideal co-founders should and should not be. The problem is that this common wisdom and associated prescriptions are naïve. There are no perfect co-founders and there are no perfect algorithms for finding or choosing a perfect co-founder. And even if there is a good fit or complementarity to start with, it will not and cannot last.
Most advice about working with family, friends or lovers is to avoid it. People that you are emotionally attached to add layers of complications to leading others. These are people you have existing relationships with, and as we discussed in sprint 8 that means you have plenty of pre-existing shared objectives with these people that are not related to the success of your startup.
This advice to avoid them can also be naïve if a specific friend or family member is excited to share their critical skills or resources, and are excited to help you with your vision. Adding a friend or family member to the team can, under the right circumstances, significantly improve your ability to make some group of customers very happy with the product or service you envision.
The key, and this is not an algorithm but a way of thinking about relationships, is to team up with someone you respect and whom you trust to share a vision of how to build a new business that will make its customers so happy that they gladly give their money in return. Respect and trust are overused terms, but we use them here very specifically.
You respect someone that you feel is capable and committed of achieving the goals they set.
You trust someone that you respect and whose goals include your best interest.
Choosing to work together
Working effectively over long periods of time with co-founders, friends or family requires masterful relationship building skills! The exclamation point is very intentional. These are the skills and understandings we discuss in sprints 8, 9 and 10.
It is critical that you are capable of spotting all your shared objectives and payoffs. Working with these special people requires that you keep the shared objectives and payoffs associated with friendship, or family, or with sharing power and responsibility separate and distinct from the shared objectives relating to establishing and growing your enterprise. It is virtually impossible to do a good job successfully making some group of people happy enough that they gladly give you money in return if you are focused on changing things at work in order to make a co-founder, family member or friend happier than everyone else.
Your co-founder, friend or family member also need excellent relationship building skills. Have them read or listen to sprints 8, 9 and 10 and have them do the exercises. Share your answers. And then agree to identify and list your shared objectives, similar to the example given in sprint 10 with me and my COO. As discussed there, it is not all cooperation, but some combination of cooperation, competition and retreat that keeps people who are close working effectively together. The many shared objectives that have successful payoffs builds trusting with one another that endures no matter how their lives and abilities eventually diverge.
Let’s dig deeper.
Why co-founders split
Co-founders split when working together becomes intolerable. We already mentioned the statistic that only 1 in 4 founding teams stay together for more than four years and co-founders splitting in the first four years is the biggest cause of startup failure. The two biggest reasons co-founders split are: 1) they come to fundamentally disagree on a shared vision for the business, or 2) they no longer trust one another.
The vision for how a business will make certain people so happy that they gladly give their money in return is the fundamental shared objective of any co-founding team. The two co-founders must always cooperate on how they describe this shared vision. It is the “what” of the business. The who, where, when and how of the business do not have to be cooperative shared objectives at first. While there ultimately must be agreement on the who, where, when and how, that agreement may be reached competitively or by one founder retreating to let the other founder resolve the payoffs of the shared objectives (in other words, a retreat means one founder says, “I don’t care which way we do it”).
Founders that thoughtfully and effectively use relationship building skills to compete to determine the best who, where, when and how of implementing their joint business vision ultimately create more productive, competitive and profitable enterprises. We give a great example in sprint 10 with me and my COO from iSuppli.
The other major cause of co-founders splitting is the loss of trust. This usually comes from the strong negative feelings that are generated by covert competition on one or more shared objectives. Covert competition is when there is shared objective where one party secretly tries to shift the payoff from what had been assumed or agreed to.
This covert competition does not have to be associated with the vision of the company; it could be on any of their shared objectives. The covert competitor may not even realize what they are doing. Some people instinctively use manipulative techniques such a passive aggressiveness to defend themselves from emotional situations they fear.
And if there are shared objectives that extend beyond work, as when co-founders become friends, then the loss of trust in from not achieving non-business shared objectives and their payoffs can spill over to loss of trust in achieving shared objectives associated with the business vision.
Friends and family are like special types of co-founders.
Friends and family have shared objectives that transcend the business, which adds risks similar to co-founders sharing a business vision. Friends have very important shared objectives:
to do things together that bring happiness,
help one another process strong feelings and emotions, and
to protect one another from things they fear.
Good friends trust one another to act in one another’s best interest.
Family members have many shared objectives that exist before any business is founded. They have complex sets of shared objectives and payoffs that involve identities, status within the family, on-going competitions. These on-going competitions are often covert and can relate to who is “best” at something that merits praise from a parent or other high-status members of the family.
The relationship between each pair of individual family members is a complex web of cooperative, competing and retreating shared objectives with a wide range of potential payoffs. Many payoffs are emotional rather than material, so covert manipulative competitions going on to get attention, respect or independence are common. All these existing familial dynamics are superimposed upon the shared objectives the founder has with everyone else on his or her team.
Married couples come with shared objectives from both their families and as mutual friends wanting to give one another support and happiness, with additional shared objectives around creating and maintaining a healthy happy family.
The priorities of the shared objectives associated with being friends and family intermingle with those of creating and growing a startup. In sprint 8 we describe when it is best to cooperate on shared objectives but we also note how much effort and personal energy is required to maintain a cooperative relationship. Nobody can maintain many high-quality cooperative relationships at once. What happens is that people naturally covertly retreat from many of their cooperative relationships by not putting in the energy or effort to maximize the payoffs for the person they are cooperating with. If they are prolonged, these retreats create tensions that weigh on both the personal and business side of the friendship. Too many retreats or just one retreat on a high priority shared objective can destroy trust between the parties. When you hear, “you were not there when I needed your help the most,” you know trust has been destroyed.
Lovers add yet another dimension. They have intense shared objectives to explore the limits of their feelings and experiences when together and do not necessarily share an objective to be long term friends. In this case the objective of exploring intense feelings can shift quickly from being cooperative to being competitive. Competition between lovers gets very emotional and cannot help but spill over into no longer wanting to share business objectives. Startup co-founders rarely survive being lovers.
Discuss shared objectives to make them clear
The best way to avoid splitting with your co-founder is to be open and explicit about your shared objectives, their pay offs, as well as where you are cooperating, competing, and retreating. If you feel you are cooperating while your co-founder is retreating or competing, then call them on it. If they are covertly competing, then nicely call them on it by respectfully disagreeing with the nature of the competition.
Many people use manipulative covert competitions to get their way and do not realize it. Passive aggression, name calling, uncontrolled anger are all covert competitive strategies.
There are many articles and books on how to deal with manipulative personalities, which almost always suggest making clear: “What are your shared objectives and payoffs and which ones do we agree on them? How can we unemotionally work together or in parallel to achieve these shared objectives?”
Ultimately, it really helps to write down all your important shared objectives and share the list with the people you count on the most in both your business and personal life. Don’t force them to make their own lists, just describe what the list means to you and how it impacts your priorities.
How you deal with family dynamics is beyond the scope of what we can help you with. What we can say it that the presence of family members on the founding team makes it even more important to have explicit discussions among the business team, including the family members, about what are everyone’s shared business objectives.
You want to create a shared objective with each family member who is part of the startup along the lines of cooperating to keep family dynamics out of business decision making. The payoffs are reduced tension and higher personal productivities for both parties, which is something worth cooperating to achieve.