There is an African proverb that goes, “Alone we go fast, but together we go far”.
You remember the movie The Social Network, right? How the two buddies who started the little website with a book of faces in their dorm-room at Stanford ended up at each other’s throats when the big bucks to roll in.
It is an undeniably tough decision – do you go in alone, get the job done right yourself, or do you build a strong team? If you choose to get a co-founder, where do you start looking? If you do get one, should you split the company 50/50?
In his book Founder’s Dilemmas, Noam Wasserman studied a vast set of over 10,000 startups over a period of more than a decade, both high-growth startups and lifestyle businesses.
He interviewed hundreds of founders, both the ones that made it big time and the ones that you know, failed. Naom found that there were 4 key dilemmas faced by entrepreneurs starting a new business.
1. The solo-versus-team dilemma: Should I launch the business myself or try to attract co-founders?
2. Relationship dilemma: Who should I try to attract as co-founders: Friends? Family? Acquaintances? Strangers? Prior co-workers?
3. Role Dilemma: What positions should each of us take within the startup? Which decisions can we make alone, and which should we make as a team?
4. Reward Dilemma: How should we divide equity and other financial rewards among the founding team?
After analysing the data of thousands of case studies, poring over interviews and research reports for over a decade, Naom found that there is a deeper underlying decision that dictates the choices that entrepreneurs make – sometimes without really knowing why they follow a certain road.
What it comes down to is a fundamental choice: rich outcomes versus king outcomes. Do you want to be mega rich or do you want to be king of the hill? Wealth versus control is what it all boils down to. This turns out to be the key underlying factor that determines which path you take.
It is super, critically, absolutely essential (take note of the emphasis!) that you think about this beforehand and get clarity on your objectives, otherwise you will make confused and inconsistent choices which will likely cause your business to fail.
Usually it’s not a black-or-white all-wealth, not all-control decision, so decide where you sit on the scale. This also explains why most small businesses are small businesses. Usually these businesses are run by single founders.
Implicitly or explicitly, they made “control” decisions as opposed to “wealth” decisions. There’s nothing wrong with that, the key is to be aware of the decisions you’re making and the impact that will have on your business.
Johan du Plessis is a founder at Corporate to Freedom. Come check out our 1-day Startup Bootcamp in Sydney on Sat 27 July 2013. Suzy Jacobs, Founder & CEO of She Business, Australia’s fastest growing business club for women, will run a whole session on finding partners and co-founders!
[notice]Corporate to Freedom 1-Day Startup Bootcamp will be held at the Scientia Building UNSW Kensington Campus, 9am-5pm. Tickets start at $217. For more information, please visit www.corporatetofreedom.com
Special to Anthill Readers – Tickets are normally $217, but you can use the promo-code “ANTHILL” and pay only $130 – that’s a massive 40% off! [/notice]
