The Co-Founder Relationship
avc.com
avc.com
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.
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.
- 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.
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.
NB: I wouldn't say that I was squeaky clean innocent either - in the first case above, I had also just gotten married about the same time, so it was the sudden change in goals and priorities for each of us that was the catalyst for the co-founder relationship to break down.
A startup "co-founder" relationship is a partnership. Go and ask any business advisor if starting a new business as partnership is a good idea. If he or she is in a business of selling anything other than an hourly fee, you would get plenty of explanations why partnership is a terrible idea and why business should structured in a way to prevent those operating it of thinking of themselves as "partners". You can think of partnership as marriage and your business as a kid. If the two "parents" aren't on the exactly same page how to handle the kid for the entirety of kids life until the age of the majority, raise the kid, deal with kids friends both the marriage will break and the kid will get to have a shitty life.
One person starts a business. That person brings on board employee number #1 and employee number #2 and employee number #3 etc delegating them certain functions but there's no disagreement of who is the boss.
This might be an odd idea in the startup land as it seems in most of cases that I have either been closely involved in or observed there's usually no single founder that is capable of starting a business on micro scale who would need help to scale business up. Rather a combination of the founders creates a virtual businessman/businesswoman that is capable of starting a business.
VCs, obviously, love this as it allows them to play founders against each other to reach VCs goals and vision whatever those goals and that vision may be.
I’ve never personally worked outside of enterprise, but the reason I wanted formalization is because even in enterprise, keeping management on the same direction is a challenge.
Sure there is almost always a power structure in place with a chain of command when it comes to enterprise, but relying on that, military style is typically terrible for productivity.
What we do instead is to create shared realities by talking things through and making appropriate changes before we formalize our now shared direction in the form of strategies.
When I have a disagreement with the IT manager who is my counterpart, we don’t ask our shared boss to sort it out. Instead we turn to the agreements and strategies on both development and secure operations that we’ve co-written and figure out how to solve our problem with what we’ve agreed on earlier. Sometimes this leads to strategic revisions, but it’s never lead to a break up sort to say.
Now, I’ve never not worked enterprise so I’m not sure how much of that stuff goes on there. It’s my estimate though that the use of social constructs like strategies isn’t really high on the agenda, especially because social constructivism is a soft humanity, but I know the lack of a shared realty is what caused my friends to break up into two competing companies. I also know it’s what led to them doing it in a shitty manner that caused customers to flee and their friendships to end.
They didn’t formalize their shared reality early on beyond a vision. They never updated the foundation of their shared reality to make sure they were still moving in the same direction, and they never formalized any of the resolves they did in meetings. Which meant that they had very little common grounds to stand on when their differences grew too large and erupted into conflict.
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.
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.
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.
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)
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.
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.
If the founders are behaving unethically or illegally, the board has already failed to fulfill its duty. “Don’t kill the messenger” is rarely reality.
he just didn't like the language i used (it's blunt, and describes a social dynamic he's probably upset about). he forgot all about what's actually being discussed here, which is an IC-level employee vocalizing to the co-founders/executives and board about the direction/strategy/highlevel leadership of the company.
Your comment about tone, even if its regarding your own--or other's perception of it--brings no value to this discussion. Arguably it brings negative value.
Did you create this account to vent a fantasy personality that you're restraining in real life?
cheers.
Organizations are distributed human reasoning systems. If your culture, personalities or incentives prevent people from sharing key insights, you are hampering your ability to execute.
i think what that just means you worship venture capitalists and fluffy language they espouse (in a cynically false way, i might add) over real world descriptors.
i started my business specifically to dramatically mitigate the possibility that small concentrations of people will have any financial leverage over me.
Note that the original post is from a VC, and the context of this thread is a discussion of someone talking to a board member without the knowledge of the founders. Also note that the article itself mentioned specific contexts in which this should be done:
"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."
This all seems valid to me. It also seems like situations in which it is reasonable to step "into conversations in which you have no context and no skin in the game".
FWIW, I don't drink the VC kool-aid, and I discourage others from doing so unless they have a very specific business context that is appropriate for VCs (most folks don't). That said, I am a fan of people in a wide range of fields to develop their fundamental skills in leadership and management, and I get the sense based on your comments that your fundamentals are lacking.
If you think otherwise, please step out from behind your throwaway and let us know about you and your company. I am sure that your posts here will reap huge benefits in recruiting and retention.
> 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.
I'd imagine many engineers are coming at it from a slightly different perspective. They're used to being able to self-teach. They're used to REPLs, where getting instant feedback is easy. They're used to having the luxury of rapidly iterating on failure before they get it right. They're used to a world of technical decisions where being smart and right is often enough to win.
Trying the same process with management bites them in the ass, and disillusions them.
It sounds like you envy their freedom to put their head down as much as they envy your freedom to _matter_.
Ultimately, you're not totally wrong, but complaining about the symptoms without treating the cause isn't productive.
I couldn't disagree more. Not only is this is an excellent way to create a top-heavy echo chamber in your company--which is counterproductive to problem-solving--but also lower tier employees will end up feeling like tools rather than contributors. Frankly put, this mindset comes across as very arrogant.
Having a business puts you in a good position to get funding or customers for a new venture. The same labor market for your employees benefits you if you yourself have any technical skills worth mentioning.
And your employees might care if they actually had a profit share in how the company did, or saw some direct upside when they did their job better or worse--which is usually not the case. Why break their back for an entitled owner resents them for knowing the value of their labor?
You sound like somebody with the typical founder hubris.
which is sort of what i was alluding to in my last comment.
Your last paragraph of "no context, no skin in game" is the same projection you accuse me of. How many workers have to deal with the fallout of arrogant founder decisions? They've got skin in the game too, just no agency. They probably have even more context than you, if they've been paying attention to numbers or if they have their own experience as founders.
If you think I paint an unfair or incorrect picture, by all means try to make a case.
well, so far, zero.
i think this thread is just you venting at me for having an opinion, because there's this image in your head of a mustache twirling asshole.
It should've been obvious that I was talking about workers in the general sense, not at your company.
If, on the other hand, you were being serious, I genuinely hope that you grow up and learn to lead before you flush anymore investor money down the toilet.
So would you be ok, for example, with your employer showing up at your house and telling you how you should be running your side project?
It's their business, sometimes they are going to make mistakes, and by all means you should point out where you see room for improvement. But at the end of the day it's their reputation at stake so they need to be the ones making the decisions. And unless it's clear that they are defrauding investors or something then it's fine if those decisions don't work out, there is no ethical or legal issue there.
Yeah and I think that's fine. Whether you are investing sweat equity or capital shouldn't matter. But if you're an employee getting paid market rate with a nominal slice of equity then you really shouldn't be talking with the board unless there is some sort of misconduct, not merely because you disagree with the product direction or whatever.
The people above you are usually as clueless as you are. They just conceal it with confidence. Which they acquire because you can't fire the people above you, and it's less likely for their decisions to destroy the company/team than for your decisions to get you pruned.
Being forced to bow your head and meekly speak in just the right way is enough to make me want to vomit. And I don't know where this feeling is coming from. It's very strong, and it came on in the last 6 months or so. It doesn't seem healthy.
It probably sounds like I look down on people who act that way. Quite the opposite. It's more like realizing we're all forced to act that way, all the time, and suddenly I'm not so sure this system is one we should want to submit to.
Even if people try to convince you that the power dynamic isn't there, it is. Every single decision you make is through the lens of "will this get me fired?" Especially when it matters, as this article illustrates. Which is by definition the most important time to take action.
But this is not that. This is going to the board to get your co-founder fired. Damn right you better choose your words carefully.
You work in a toxic environment. Start looking for a new job asap.
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.
> 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.
The example I gave of subversion wasn’t just one bad actor—it was all involved.
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?
I would have thought that the preferred option would be single founders.
(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.)
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.
A key route to failure is making excuses. A bunch of people who failed telling you it's their cofounder's fault shouldn't be too big of a surprise.
Even if both founders agree it was Founder B's fault, that doesn't mean its true. It really depends on the personalities of the people involved. People take blame for things that are someone else's fault all the time. Especially if the other person is good at projecting or deflecting.
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.
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.
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.
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.
Cofounder situations are a significant risk which can and does outweigh the benefits in many startups
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?"
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excerpted from here:
https://www.amazon.com/Destroy-Tech-Startup-Easy-Steps/dp/09...