8 Common Mistakes When Choosing a Co-Founder

Most things in startups vary from company to company, but the answer to this is choosing your co-founder (or lack thereof) in most cases.

65% of startups fail due to cofounder conflicts, according to the Harvard Business Review.

It’s a serious and irreversible decision.

But what can you do upfront to avoid becoming a horror story?

I’ve seen the ups and downs of co-founder relationships in past companies and have more recently chosen the solo founder route for Megaphone.

Here are 8 common mistakes founders make when choosing a co-founder:

8 Common Mistakes When Choosing a Co-Founder

Optimizing for Skill Gaps

Wait… what?

Don’t you want to work with someone who’s good at the things you’re bad at, and vice versa?

Yes, of course.

But because this advice is so common (and obvious), I’ve noticed a lot of founders over-optimize for it.

You’d be better off optimizing for ambition gaps.

At a startup everyone is going to need to pick up new skills, and those skills will map to roles and responsibilities within the company. Your initial strengths are only part of what your contribution and role will eventually be.

For example, maybe you’re an engineer and your co-founder is a designer but if you both want to learn about fundraising and be CEO then you’re going to clash.

Have a conversation where you map out what each of you wants to have done throughout the life and by the time you move on.

Not Setting Hierarchy Early On

Splitting equity 50/50 feels good and is often the right choice, but you need a way to make quick decisions when you disagree.

At my last startup we built a co-founder operating system to help with this, but you can probably initially keep it simpler than that.

The easiest way to do this is just by setting a hierarchy. Basically for decisions the CEO feels strongly about and has a reasonable argument for, they get their way. The speed you will gain will outweigh any hurt feelings (or even wrong decisions).

This is why the reference calls are so important — know who you’re getting into a partnership with from all angles before you give them this power.

Making a Quick Decision

When you come across an ideal that you believe can be venture scale with someone, your impulses will tell you to immediately start moving as fast as you can to capture the market before someone else does.

It’s so easy to allow yourself to use that as a reason to start working with whoever you discovered the opportunity with.

But, for all the other potential reasons on this list, this is the most common mistake I see.

There’s no scenario where, even if a competitor launched today, you’d miss your chance to become a massive company by taking a week or two to validate your decision.

Not Working Together on Something Else First

The most common advice here is to do a hackathon or build a small side project together. This is basically a “work trial” but for founders.

That tends to be the best way, but I’ll expand the definition to just working on something together. This can be planning a trip for mutual friends, organizing an event, or anything else that will require you to collaboratively make consequential decisions.

The more communication and coordination needed the better.

The more challenging the better.

The more stressful the better.

It’s best to get data on this quickly, so sometimes building a small side project together may actually not be the right choice.

Not Doing (Blind) Reference Calls

I was skeptical of reference calls for a long time. Wouldn’t the people I talk to just either be irrationally positive or negative towards the person, based on their opinion of them?

This can happen but is obvious when it does.

More frequently you get surprisingly candid conversations. The key is to make the person you’re talking to feel comfortable being honest with you. They need to trust that what they say won’t get back to the person, and ideally that you share their viewpoint on the person too.

A good way to do this, even when you don’t have a relationship with the person prior to the call, is by making lighthearted jokes that support their perspective.

Do enough of these calls and you’ll likely get a pretty full picture of your potential partner. Even if you trust your gut (as founders should), reference calls will allow you to better articulate your own viewpoint.

You should, of course, tell your potential co-founder that you are doing reference calls. They will want to provide references, and you should take those calls to see what the person’s most trusted friends say.

But the most valuable references are entirely blind. Use LinkedIn or other social media to find mutual connections and ask for an intro to the person from someone else you know who also knows them.

You probably only need to do ~5 but I’ve done up to 20 on someone before in a particularly complex situation. Always hugely helpful.

Misunderstanding Longterm Goals

If you build a company with someone you will be one of the closest people they have in their life during major life events, and as they grow as a person in general.

If your co-founder wants to have kids in the next year or will regret not traveling the world before they’re xx years old then that’s great for them but you need to put the company first and consider the impact.

If your startup is successful you’ll be tied at the hip with this person for 5 or even 10 years. Life happens in unexpected ways, but it’s important to understand how each other are feeling and thinking about things outside of work before diving in.

Not Vetting for Commitment

Most people will say they’re in it for the long haul, but in some cases don’t understand that building a startup requires more than longevity — it requires a constant grind, often for years, towards a singular goal.

You’re not just looking for someone who is willing to work on a company for that length of time but also someone who will be up at 3am to debug an issue, or be able to travel on a moment’s notice to a meeting with a potential partner.

You need to be on the same level here, otherwise the one of you who is working harder will build resentment towards the other(s) over time.

Forgetting About Culture

Your startup will take on the personalities of the founding team.

It’s hard to explain how exactly this happens, but everyone on the team will be aware of it in different ways.

Don’t just work with the smartest person you know — make sure you share the same values.

Otherwise it will create confusion within the company about how things are supposed to get done.

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