Business Development Responsibilities: Looking for a Co-founder? Read This Before You Make Your Choice.
January 22nd 2021
On the Typical Way of Sharing Business Development Responsibilities In a Startup.
How to build a functional company? …Especially when you don’t even have any roadmap just yet? And if you don’t know whether it’s going to scale or not? Perhaps it’s best to start by looking for a co-founder and sharing business development responsibilities, right?
The issue is that we usually learn about business development from big names of business development managers such as Bill Gates, Richard Branson, Mark Cuban, or Kevin O’Leary. Most of these famous entrepreneurs built billion-dollar ventures operating due to the classic startup company development scheme. They have since become role models and now write bestselling books and give lectures on how to be successful in business development strategies.
Due to this classic scheme, two or more enthusiasts come together, work out a new business idea, and share the business development responsibilities (usually, distributing the roles of the “hipster,” “hacker,” and “hustler” among them). And then, they put the concept to life using funds from “3 Fs” (namely, “friends, family, fools”).
Subsequently, they seek funding from angel investors in the seed phase, before going for round A, round B… This is the typical development trajectory followed by virtually every successful startup – or at least, that’s what we like to think.
But, is this assumption even correct? What if we thought out of the box and questioned the axiom that looking for a co-founder is essential for your company to survive? Perhaps, the first question we should ask ourselves is not “How to find a co-founder” but rather, “Do I need a co-founder”? Let’s first talk about some pros and cons of looking for a co-founder to realize the business development plan.
1. Legal Reasons.
When a solopreneur makes a loss in the company, the responsibility and financial consequences are put on their shoulders. On the contrary, a limited company led by two or more co-founders is accountable as a legal entity. In other words, in a startup, the company assets and the founders’ private assets are independent of each other, while in a sole proprietorship they are not. This means that a startup is a form of the legal protection of your assets.
These losses may come from taking loans without the ability to pay them back. It is, arguably, your fault to some extent. However, the losses also result from events fully independent from you. For instance, they can originate from malicious actions of other companies and individuals who abuse your intellectual property or file lawsuits to wipe you out of the market. It doesn’t happen all that often, but it is not a possibility you should completely rule out.
For this reason, many budding entrepreneurs naturally think about a company as a startup. They search for inner peace and aim to make sure that their assets are not at risk.
2. Division of Business Development Responsibilities.
Perhaps, you are a polymath with many talents, from technical aptitude to salesmanship. Even if it is the case, the range of actions you need to take to put the company on the right track is so broad, and the number of calories to burn is so high, that almost no one can do it in isolation. For this reason, it’s good to have at least one more person around who can take a part of the burden on their shoulders.
A co-founder is not only a person who works on behalf of the company but also a trustee: someone who has a personal interest in making the company flourish, and who can brainstorm ideas at any time. Your family and friends might not understand your point of view, as the quality of your life will be much lower than it appears to be on social media, but your co-founder will.
The biggest downside is that creating a company with another person is like marriage. And, in case you grow in different directions and separate from your co-founder(s) in the process, the consequences might be even more severe than in the case of a regular divorce. Namely, in divorce, you separate after — hopefully — years of quality time and thousands of memories that will stay with you for a lifetime. It is an asset no one can take away from you.
However, if you say, “Goodbye” to your co-founder, you separate after months or years of a grind. You went through the dark times when you were working around the clock hand in hand hoping that one day, the good times would come. And in the end, the good times never came, while now, you need to cut your baby in half or give away the whole custody to only one of you.
2. Shared Decision-Making.
Once you get a co-founder on board, you won’t ever be truly independent like a business development manager. Even if you have a majority share, you won’t make independent strategic decisions. All the major decisions in the company happen by consensus (the same concerns investors, by the way). If you are the type of person who enjoys making decisions by consensus, it works pretty well.
But if you are a strong individual, a type visionary, and a risk-taker, it might be extremely frustrating if your co-founder is more reserved than you. Or, the other way around: imagine that you are tired of developing your company. So, you want to exit, sell the company for a few million to a bigger player and enjoy early retirement. However, your co-founder disagrees and pushes you to stay on the project. And then, a few years later, the company flops. Imagine how frustrating that must be!
One often overlooked aspect of finding a co-founder is time. Namely, the more decisional people around you, the more time you need to spend on bare communication. If you make decisions alone, you not only gain decision power but also save lots of time.
You don’t have the pressure to consult your every move with your co-founders. It can take a huge chunk of every working day! I often hear from startup co-founders that they spend the whole lunch break, or the whole morning (if they live together) brainstorming and talking about the company every single day.
The day only has 24 hours, so what will eventually be a better business development strategy to reach your goals? Spending the only free time you have during the day brainstorming with your co-founders? Or, spending the same time in the spa or watching a movie, recharging, and reconnecting with your intuitive mind? And then, making better decisions on your own? In many instances, the second strategy would work better.
4. Hard To Find The Balance Between Efforts and Rewards.
In the video, “Why I Don’t Have a Business Partner Anymore,” Chris Do mentioned his reasons for becoming a solopreneur. He pointed to the common problem one of the founders might turn out to be more engaged in the business than the other. And this, in turn, always leads to issues and tensions.
Of course, not all founders need to make identical efforts in the business. It is essential, however, that they reach the identical ratio of effort to reward. As Chris mentioned, he works like an animal and he was struggling to accept that his business partners were much less invested in projects than him. So, eventually, he went solo.
On The Wrong Reasons To Find a Co-founder.
In principle, there are two biggest sins while looking for a co-founder.
1. Do You Need a Co-founder? Or, a Cheerleader?
Startup founders often invite friends or family members on board because deep inside, they don’t need a business partner — they need a cheerleader. Someone whom they like, whom they trust, and who comforts them and tells them every day that they are doing great.
So, perhaps, it’s good to ask yourself: what types of competencies do I need to match my competencies? Is this the right person? Do I already feel good enough to pull the project off? — Since if you don’t, even a cheerleader won’t help in the long run.
Mind also that you won’t ever be alone when running a company and working on its business development strategy. The family will still be there for you. You will chat with your clients, employees, and subcontractors — and they will also share their ideas with you. You will chat and discuss on social media. If loneliness is what you fear, the co-founder is not necessary to solve this problem — as it will solve itself.
2. Do You Know How to Put Your Idea to Life, and You Are Counting on Someone Else to Rescue Your Project?
Fresh business developers often have high-level ideas — which might hold water as they address some real problem — but they don’t have any idea of how to pull the project off. What type of hardware or software should be built for this purpose? How to find the target group of clients? So, they find someone to save the project.
In the end, a few people come together to build the project but none of them has a helicopter view of the project — and in the end, the project can’t be completed because a few pieces of a puzzle don’t fit together.
It’s just not how successful projects are created. Steve Jobs didn’t ask Steve Wozniak to build the prototype of the Macintosh. He had no idea if it is even possible — but rather because he knew that Steve Wozniak is a very talented engineer who will do his best. When Steve Jobs started the project, he had all the pieces in the right places on his mind already.
Besides, unlike 20 years ago, today, many digital solutions are automatized. You can build a website, an online store, a simple application, and a CRM system without any coding.
Many businesses start with a technical co-founder just because the author of the concept (or, the “hipster” on the project) doesn’t know enough about the available solutions to tell that they don’t need any technical co-founder.
As mentioned in the post “How (Not) To Build a Business,” many business developers are detached from technology. They tend to think about high-level concepts, hoping that someone else will take the whole implementation on their shoulders.
How To Find a Perfect Co-Founder? Why There Are No Algorithms.
Now let’s assume that we already have concluded that in our case, finding a co-founder is a good idea, and the pros outweigh the cons. Now, why is this a tricky task? Why are there no algorithms?
This is because people have different styles of thinking and bonding, same as they have different styles of solving problems. Just think of poker players. Some of the top players in the world, such as Daniel Negreanu, describe themselves as players who primarily read faces. Other top champions, such as Peter Eastgate, primarily rely on mathematics and cautiously memorize cards and count probabilities while playing.
Some General Advice For Finding a Great Co-Founder.
Judging from what was said above, one might think that finding a good co-founder is almost impossible. Indeed, it is not the easiest, but you can maximize your chances by sticking to a few golden rules.
1. Research Your Co-Founder.
This tip sounds obvious… but you might be surprised how many budding entrepreneurs never do this! Google your potential cofounder and learn how they approach people in public space. Furthermore, delicately ask your common acquaintances and people who worked with your candidate in the past about their impressions about working with this person.
You will get more truthful information once you ask, for instance, “what are the three great things and one not-that-great-thing you can say about working with this person“? After they are given the chance to speak highly of someone, they will open to spill the beans about the downsides.
2. Go With People Who Have Ideas For Your Business, Not Those Who Flex With Their Background.
If your potential co-founder spends too much time on self-presentation and bragging about their background, it is not a good sign. You might have to do with a narcissistic personality or a typical “serial entrepreneur” who just sneaks into projects and then drives them to ruin and leaves them behind. Or, someone who is just desperate to get any project as they have a mortgage and the ground is burning under their feet.
Instead, go with someone who spends time mostly asking about the project and coming up with ideas for how to push things forward. This is a clear sign that they are genuinely interested in the project, not just in the benefits and status that come with it.
3. You Can Learn New Skills, You Cannot Change your Personality.
As co-founders, you will work closely with each other. As mentioned before, building a company is almost like marriage. For this reason, you need to resonate with each other on a personal level. It doesn’t mean that you need to have similar personalities, but rather, complimentary or synergistic personalities.
Of course, complementary skills and strengths are also important. It is best to have a match in both dimensions at a time: personality and skills. However, mutual trust and personality match are more important as you can delegate many tasks to other core team members and employees, and discuss the business strategy with the advisory board.
Furthermore, mind that synergies often hide in plain sight. You might dream of bringing your business idol in as a co-founder while in fact, your housemate or a friend from undergrad studies might be the best choice.
How to find out if you have synergy with your potential co-founders? You can, for example, try out the Ontology of Value Test and check if you have a hipster, a hacker, and a hustler on your team!
4. Find Someone With Whom You Can Argue With In a Constructive Way.
Building businesses is a highly stressful occupation, especially in the beginning, before you establish your name and build strategic contacts, and achieve steady growth in your revenue. Therefore, you better make sure that your potential co-founder has an entrepreneurial mindset and is stress-resilient (the Ontology of Value Test can also come us useful here!).
And let’s be real: even between the kindest of people, disagreements WILL happen. You need to build an anti-fragile team that can go through any market cycle together, and that develops functional, respectful ways of solving conflicts and approaching disagreements.
5. Give Yourself Time To Get To Know The Other Person.
You shouldn’t seal the deal straight away. The initial period should be a “dating” period of sorts. Namely, a period when you spend time with each other, get to know each other well, and preferably, observe each other in a variety of situations. Traveling together is not a bad idea!
You should also get through an “engagement” period in which you discuss the terms of your future partnership, and work out the plan for all kinds of possible scenarios.
What are your long-term plans and how synergistic they are?
Are planning an exit from your company?
At what level, or in what time horizon?
Are you planning to hire a CEO and step back from managing the company at some point, or rather, stay in the driving seat?
Which duties are you willing to take on your shoulders?
All should be sorted out and written down.
Also, make sure that you know how this person treats people in their private life. As a rule of thumb, they will never be more faithful, dedicated, or more of a team player to you as a co-founder than they are toward their own family. Therefore, if you notice that your potential cofounder cheats or just behaves selfishly in your private life, run.
And of course, as a rule of thumb, also go with people who are personally interested in you as much as you are interested in them.
6. Trust Your Intuition.
Intuition is a powerful form of intelligence. If despite everything seemingly OK, your intuition is telling you that this might not be the right person, just step back. Don’t FOMO into people. In business, people are like buses. There will always be another occasion to meet your dream co-founder.
7. If You Don’t Have a Co-Founder, Just Carry On.
If you happen not to see a potential co-founder in your circles, the worst you can do is to take a semi-random person on board. Of course, you can join one of the founder-matching platforms, communities, or meetups, but the probability of meeting the right person straight away is low.
Therefore, a better scenario is to take the “happy-go-lucky” attitude, carry on, and start working on the project by yourself. Best people usually appear when you don’t expect them after all. If you keep positive, well define your mission, eagerly work on your project and build value around it, and intensively network, many people will get attracted to your idea and knock at your door all by themselves.
And the fact that another founder joins on board late, is not a problem from a legal point of view. Logistically, this is an easy arrangement. If you started the project 2-3 years before another person joins, they take a much smaller risk than you did. Therefore, they should also receive a smaller pool of shares, accordingly. Of course, you should also vest their shares if they come on board late. But overall, this is a common practice and you can consciously choose such a strategy.
Other Aspects To Consider
Once you find your perfect co-founder, you also have other aspects to consider, such as: how to properly motivate this person? Some people are naturally entrepreneurial, understand equity and prefer to take risks and delayed gratification in a form of hedged shares. Others have preference for a safe solution, namely receiving a decent salary. The short tutorial from Michael Seibler, the Director of Y Combinator, might help you in making the right decision.
Are There Any Successful Solopreneurs Out There?
Lastly, if we don’t hear about successful solopreneurs as often, does this mean that there aren’t any? This is not the case. The list of success stories is very long, including, for example,
1. Sara Blakely, a self-made billionaire and the creator of Spanx,
2. Pierre Omidyar, the creator of eBay.
3. Chris Do, also known as The Futur, is a designer and the head of The Futur LLC and a media personality.
Not to mention the crowd of less known solopreneurs who might not be billionaires, but managed to achieve wealth and have a net worth well exceeding a million dollars. So, perhaps, looking for a co-founder is not as essential as the mainstream school of entrepreneurship dictates.
Mind that eBay is an IT company, yet its creator was able to pull off the project alone. Therefore, there is a choice — and it’s good to spend a while deliberating whether you need a co-founder before you give away part of your baby to someone else.
Conclusion: Is Sharing Business Development Responsibilities With a Co-founder Always Necessary?
The verdict is: no, not necessarily. As Philip Van Dusen wonderfully explained in his video “The Myth of a Solopreneur,” there is no such thing as a solopreneur. Every company owner is in constant contact with a whole bunch of subcontractors (even if these are some folks from Fiverr, they are still subcontractors!), partners, and professional services to develop and maintain.
As a business developer, you will never be alone in fact as a business development manager. And, before you decide to take a co-founder on board, think about the right person to share business development responsibilities with. This collaboration will be more binding than marriage!
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Please cite as:
Bielczyk, N. (2021, January 22nd). Business Development Responsibilities: Looking for a Co-founder? Read This Before You Make Your Choice.? Retrieved from https://ontologyofvalue.com/business-development-responsibilities-looking-for-a-co-founder/