Through personal experience and the observation of hundreds — maybe even thousands — of startups, it certainly seems like the co-founder relationship is a make-or-break variable.
Most of the startups we know have failed not because of factors like market timing, consumer/business behavior or competitive landscape, but because the founding team couldn’t figure out how to get along or work together effectively.
In our spirit of transparency, we (co-founder Finbarr Taylor and I) thought it may be helpful for some founders to gain insight into our professional and personal co-founder relationship.
How We Met
One of the most common questions Finbarr and I get is: How did you two meet?
We met in spring 2015 through our mutual friend, Karen. Finbarr had already started Shogun with our third original co-founder, Damien, but was curious about my business experience. I was considering moving on from the agency business I founded into tech, and Finbarr was recommended as an exceptional technical co-founder.
After a short lunch, we discovered we had complementary skill sets and ambitions.
I recognized Finbarr knew a lot about tech startups and had deep engineering expertise. Finbarr was curious how I helped bootstrap my agency to ~$2M in annual revenue. There was general alignment in business interest and no immediate red flags in terms of personal compatibility.
Because Shogun already had co-founders, it actually wasn’t an immediate match. But after a few months, Finbarr, Damien and I decided to take an important step that is often overlooked.
Let’s consider romantic dating for a moment.
It would be super abnormal to decide to be in a committed relationship on the very first date, or even the second or third. Same goes for startup co-founders. Perhaps even more so, because, as Y Combinator CEO Michael Seibel wrote, “It takes seven to 10 years to build a company of great value.” If successful, co-founders are going to be together for a long time, if not for their entire business career.
Although Finbarr and Damien knew each other from years of friendship, they didn’t know me. So, we all decided to “date” for about two months (working together almost daily) to make sure we had compatibility before I was added to the cap table.
This period was integral — and fortunately, Finbarr, Damien and I got along together well! We worked together as a triad for about five months.
There's a bit more to the whole Shogun story, but TLDR: Damien moved on amicably, and Finbarr and I ended up as a co-founder duo by spring 2016.
What surprised both of us is that our relationship compatibility seemed to grow stronger with the new dynamic.
Here’s a look at our professional compatibility at a glance.
A Framework for Professional Compatibility
Here are five guidelines for establishing a successful co-founder relationship.
1. Set a Standard of Direct Communication and Immediate Feedback. Take time to learn each other’s communication styles and have open and honest talks about your personality profile. It’s OK for this to be a pretty personal conversation; you’re partners.
Avoid passive aggressive communication and harboring resentment at all costs. Even in the best of co-founder relationships, there are going to be issues. Establish a relationship where you can give critical feedback immediately — don’t let negative emotions or doubts fester.
People make mistakes; create a safe space to acknowledge them and move forward together. Deliver critical feedback with empathy for the other person.
2. Learn to Disagree with Respect and Efficiency. I have a super corny saying: “I don’t want to be right. I want to be up and to the right.”
Finbarr and I agree about 95% of the time about business decisions. But when we disagree, we approach it more with playful curiosity than defensiveness. From there, we present hypotheses and start looking at data or running tests.
We kindly oblige to the other if there is strong preference for which approach is tested first. I generally defer to Finbarr, as he’s CEO. We remove ego from the equation and focus on the bottom line; after all, we’re a team and have even stake.
3. Protect Each Other’s Interest. A co-founder relationship is a bit like a marriage. It’s a big commitment — not just emotionally, but legally and financially.
We’ve both worked hard on Shogun for over five years. We believe in the “Even-Steven” rule: We have equal equity in the company, we have equal salaries and we each have a Board of Directors seat. We plan to always keep our equity even because that’s important to both of us.
We protect ourselves, and each other, with strict adherence to legal and financial processes. We watch out for each other, because we know that if one of us isn’t getting a good deal from our financial partnership, it will impact both of us.
4. Approach Company Leadership Based on Areas of Expertise. Finbarr is CEO, and as such, has the whole organization under him. He focuses on engineering, design, growth, product, operations (finance) and the quantitative half of marketing.
I focus on sales, partnerships, client services, operations (people, legal) and the qualitative half of marketing. We share thoughts openly about all departments, and don’t get super possessive over any area of the business.
5. Align on Ethics and Ethos. Hopefully this one is a natural fit — it is for us.
Our order of operations is Ethics > Compliance > Revenue.
Ethics: Being honest, treating people fairly, keeping our word. These are all table stakes for us.
Compliance: Maintaining the legal integrity of the business is also a given. Note: it’s actually possible to be legally compliant, but out of ethics (in our opinion). For example, don’t lay off a third of your team over a pre-recorded Zoom — that’s disgusting.
Revenue: We’re fiercely concerned with the bottom line, but that's after we’ve made sure ethics and compliance are satisfied.
Here’s how Finbarr and I match up, personality-wise.
A Framework for Friendship
Much of what’s written in the aforementioned section for “A Framework for Professional Compatibility” can be applied to friendship. But here are two extra tips.
1. Go Deep on Empathy. We’re both fiercely focused on business and view each other as business assets. But we also really care about each other as people.
We always ask each other, “How are you feeling today?” or “How’s everything going on in your world right now?” or some variation of that — and we actually mean it. If one of us is sad, or upset or anxious, we want to show up and support. If one of us is happy and having a big moment, we want to be there together to celebrate.
For instance, I jumped two flights coming back from a business trip to get to the hospital just after Finbarr’s daughter Penny was born. We care about each other as individuals, not just as extensions of each other’s business ambitions.
2. Make an Effort to Build Your Friendship. Just like building culture at an organization, some of it develops organically, but some of it has to be built with effort.
Intentionally make time to get to know each other: Find mutual interests (hobbies, music, movies, etc.) and explore them. Invest in your own inside jokes, language, memes and collective sense of humor. In most cases, you’re going to need a sense of humor.
Practice active listening with each other, and truly understand what matters to one another.
We hope some of the tips in this post will help new founders consider how to approach their potential business partners, and perhaps help some struggling co-founder teams develop stronger bonds.
Nick and Finbarr
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Nick Raushenbush is the cofounder of Shogun, software for building the next generation of ecommerce websites. Shogun helps over 12,000 ecommerce brands drive conversions, including Leesa mattresses, Gaiam yoga apparel, K-Swiss, MVMT watches and Chubbies shorts. Before Nick started Shogun, he founded a creative agency that has done work for Google, Roku, Soylent and Pokemon Go.