When we were raising our first round of funding, an investor told us that Bridget and I would have a longer relationship than the average western marriage. I laughed.
We’ve now been running Expert360 since 2012, with an ever-evolving and supportive co-founder relationship (as well as a rapidly growing business). Hindsight has perfect vision, and there’s been an element of luck and experience along the way too.
If you’re a budding entrepreneur looking to team up with a co-founder, how do you know if he or she is the right person?
Are they really “the one”?
One thing that is important to acknowledge about the start-up experience is the sheer frequency throughout the day, week and year where you will not know the answer.
So, while your co-founder can be a lot of things, and might be your partner in business for life — a silver bullet to any business they will not be.
As a baseline, you should naturally be on the same page when it comes to ideas, dreams, projects and your business, and have a shared passion for what you’re doing.
Here’s a framework you can use to get you kick started on any business journey.
1. Complementary skills
There’s a long, winding road ahead. Creating a new business requires effort and commitment.
For a start-up to succeed, you require a strong business strategy, a sound financial model, working capital, possible fundraising, the need to sell, build and manage a product, hire employees and develop strong relationships.
When we started out, I didn’t have experience in some of these things but Bridget did, and vice versa. This gave us a wider scope when the business faced roadblocks or opportunities.
2. Compatible working habits
To get along with your co-founder on a day-to-day basis, you have to understand each other’s working habits and work in a similar way.
While you may not employ the same working approach (I’m an early riser, Bridget likes to burn the midnight oil) to create a cooperative business relationship you must have a mutual understanding about availability.
If your co-founder has different expectations of the working environment, it might put pressure on the business, and on your relationship.
3. Previous experience making decisions together
Working with your co-founder in the past will give you the opportunity to get to know them and how they make decisions on someone else’s time and budget (which never hurts). Of course, if you haven’t worked together, don’t automatically exclude them from becoming your co-founder.
Look to find people in your network, especially someone you can naturally collaborate with. Perhaps start the relationship off with a smaller project on a contractor basis to get to know them, or discuss a “walk away period”.
4. Shared goals (for business and life)
It’s important that you share similar business goals. A co-founder with a preference to bootstrap the start-up will struggle when working with a co-founder who wants to fundraise.
On the other hand, it’s also helpful if you have shared personal goals. If co-founders have different expectations of what their future entails (i.e. if one of you wants a future overseas and the other doesn’t) – you and your co-founder might face unresolvable problems.
A useful way to deal with this is to discuss your personal aspirations and goals from the beginning. This will help you develop a mutual understanding and make sure that both of you are aiming for the same business outcomes.
5. Shared level of importance in the business
For co-founders to work together effectively, both of you must feel appreciated in your role. A good way of doing this is by dividing the important work between you, giving each co-founder an equally high level of responsibility and decision-making power in the business.
Not only will this have an effect on your co-founder’s satisfaction in their role, but it will also give your start-up the flexibility needed to make smart and quick decisions.
6. Commitment is personal, not just business
Think about your commitment to your future co-founder this way – the Australian Institute of Family Studies estimates that the average marriage lasts 8.7 years. Your business relationship is likely to last longer than the average marriage.
To create a co-founder relationship that is able to withstand anything, you must be committed and prepared to support the other co-founder in all situations.
What I’ve found to be useful is to set aside a date every few weeks to spend some time as team members, as well as friends. Doing this has meant that Bridget and I have been able to reduce the potential for our relationship to become strained when under pressure.
7. Absolute trust in each other
To have a great co-founder relationship, you need someone you can trust to complete projects to a high standard. And, of course, they need to trust you in the same way. Neither of you can do it by yourself.
Co-founders who are unable to trust each other will create an unstable co-founder relationship (and an unproductive business).
8. Mutual expectations of exit strategy
While this will (hopefully) be unnecessary, it is important that you and your co-founder are able to decide on an exit strategy from the start.
Agreeing on a way out ahead of time will prepare you for a potential crisis, provide a strategic safety net and also make sure that both of you have similar expectations of business action in an emergency.
Finally, it’s important to be patient when you select a business partner, don’t jump into the deep end without really thinking about it.
Co-founders who are unable to relate to each other are likely to have different expectations, and if you choose the first person who expresses interest, the co-founder is unlikely to be truly committed to the business.
You don’t want to start a business only to have issues with your co-founder, so make sure to wait (in business and in life) until you meet the right one.
Emily Yue, co-founder and COO of Expert360, is a former management consultant from top-tier firm Bain & Company, where she advised CEOs of ASX50, Fortune 100 companies and not-for-profit organisations in Australia and the United States. She was recently voted one of Australia’s Top 50 Australian female entrepreneurs this year.