As a mentor at Virgin Startup, I’ve been asked many times which are, in my opinion, the most important characteristics to consider when looking for a co-founder.
These are the 7 key traits your co-founder must present if you want to set up a great team to build your startup and make it successful:
- Hard skilled
- Not scared of failure
- Fast learner
- Lateral thinker
- Aligned on the vision
- Obsessed with perfection
I’ve learned the hard way how necessary these traits are. My experience as a co-founder (I cofounded a startup before Altar.io & 10kstartup) and as a mentor, taught me 7 very well defined traits that must be in your co-founder’s character.
First and foremost, let me highlight few useful rules (especially for First Time Founders).
Look for Intellectually & Personally humble people
You are concerned about why I left it out of the list.
Well, I truly believe this trait is crucial not only when looking for a co-founder (business partner), but instead should be present in all the people we trust. Moreover, it’s like a precondition: without this essential personality, the following traits do not work at all.
Having a consciousness of the limits of one’s knowledge, including a sensitivity to circumstances in which one’s native egocentrism is likely to function self-deceptively.
The apostle Paul says, “Knowledge puffs up, but love builds up” (1 Corinthians 8:1), meaning that knowledge with love leads to humility and a sense of obligation.
This character allows people to have all the other traits presented later in the article.
Don’t be in rush, don’t run. Looking for a co-founder is not a summer date
Picture this: you’re excited because of the great two months in front of you. You’re in front of Ipanema beach with a chill Caipirinha enjoying the sunset and Kygo’s playlist in the background… You meet a good-looking girl/boy showing her/his dancing skills on the patio and yes, you were exactly looking for a very expert dancer to spend the summer with.
Bingo! You start dating her/him, everything is running properly, but the summer has an end by nature and both of you will come back to real life soon. Have you already plan that? Of course not, great times make you forgetting any future problem.
When a business idea seems to make sense in your mind, you’re exactly in the same situation as the guy/girl at Ipanema: everything is exciting, you’re probably feeling like Zuck Junior.
Your best friend is not automatically the best co-founder
If you want to pursue a business relationship with a friend, make sure he has the right skill set and personality. If he doesn’t, let him continue to be your best friend and don’t mix friendship and business as it might harm both.
Also, if you’re specifically looking for tech co-founders, one of my co-founders, Daniel De Castro Ruivo, highlighted perfectly the choice you have in your hands when building a tech business. I truly suggest you read his article “CTO, Developers, Agency? What’s the Best Way to Build Your Startup?”.
Finally here we are the 7 traits you need to consider when looking for a co-founder:
1. Hard skilled
Any successful startup has hard skilled people.
People must be great at what they do. The easiest way to find and validate is to look for a that a person is extremely good is called “proven-experience”.
With “proven experience” I mean the particular set of skills that are essential for the business to be created and to be grown healthily. It could be related to 4 exited startup and 3 IPOs. Of course few of such people exist out there but it could also be related to previous experiences in top high-tech firms, or simpler activities successfully carried out in the past:
- a developer could have developed a game from scratch when he was 17 (bear in mind that technically-wise, more complex or less complex sets of skills depend on the type of business);
- a marketer could have grown his blog about NBA players from 0 to 50k visitors per month while at Uni;
- a CEO could have been gathered experience as the leader of a successful student association.
You can build any type of house that you want (liberty, post-modern, wooden, etc.) but you need concrete for the foundation.
If hard skills are missing, the house could be as fancy as you want but it will not endure from the first strong gust of wind.
2. Not scared of failure
There are tons of great professionals out there who are scared of failure. But then again what is to fail?
Some think that failing means hours and days, days and nights of hard-working can translate into a product that does not attract any customer. That’s learning, not failing.
Startups (entrepreneurship in general) are all about learning; making a startup mocks the behavior of a living organism: when you’re ill, your body understands that a problem raised and so recreates newer cells. If you find out that your market needs something slightly different… you iterate, you adapt. And Startups are great at that! You can A/B test almost anything.
Co-founders should behave the same way: Research, plan, execute, test. If something turns to reveal unsuccessful, then iterate until the right solution will be found. I’m maybe a bit techie, but try to imagine your lives as startuppers as they were software within the agile approach. They’re always iterating, always adapting.
What if a co-founder takes an unsuccessful decision? Not a problem, as a Fast Learner (n.3), he gathers the insight and next time will try a different approach with the benefit of previous learning.
PS. I believe that accepting failure well is an innate characteristic. Either a person has it or doesn’t. If he/she doesn’t, they should go for a regular job!
3. Fast Learner
Now if you fail you learn, if you often fail in small tests, you learn fast and you improve fast too. Hence to be a fast learner you need to try very often, fail very often too. Also attending mentorship events and talking to expert people is a must in particular if you are a first time founder, but when executing, you will be alone with your co-founder/co-founders sit at the desk of your office taking the main decisions, and believe me, some of them will solicit to be answered really quickly.
You will embrace different situations where it seems you don’t have clue about solving a certain problem. A fast learner gets excited and focuses himself on researching and analysing deeply the environment in order to get the most accurate reasoning to back the answer to that kind of issue. Moreover, it’s good practice that all the co-founders have insight on the overall business (technology, marketing, sales, etc.); “fast learner” founders are able to add significant value to the main decisions even if the topic is not their primary subject. If someone takes the wrong decision? Go to n.2.
4. Lateral thinker
Setter. Not taker. As you are, you want someone in your team who is a trendsetter, who is so good that he does not lay on others’ common sense but always evaluates and eventually exploits opportunities that are fruitful for each specific situation.
Back in 1908, Henry Ford started selling the Model T when everyone merely wanted faster horses. Steve Jobs created a smartphone with one single button when each of us was still addicted to Blackberry’s keyword.
You want a co-founder that thinks like a customer. Every customer wanted (and still want) faster ways of transportation and the easiest and powerful smartphones. As Michael Templeman says in his article How to Be a Trendsetter, “We are all consumers. We all know what we need, like and think is cool. One way to be a trendsetter is to think like a consumer. What products or services would you love to see?”
5. Aligned on the vision
Discuss, discuss, discuss. And carry on discussing. All the discussions will lead to a success if there is an endpoint; if it happens, a banker would say: good fundamentals.
Then there are millions of doable routes to achieve that endpoint, but the different routes are all connected by one single dot: your vision.
James Clear’s interpretation clearly wraps up the “failure of vision” problem: “A Failure of Vision is a WHY problem. It happens because your vision or goal for what you want to become doesn’t align with the actions you are taking”. An example? Secrets, a famous startup from Silicon Valley failed because “it does not represent the vision I had when starting the company”, David Bittow said.
Vision is key: if you truly believe in something, all of your actions naturally aim at that.
6. Obsessed with perfection
Your teammate should be obsessed with the product/service perfection as much as you are. His and your main daily focus is the product that you’re building.
Obsession with perfection in a way that what you are building must be innovative, disruptive and better than everything else anything pre-existing in your market (otherwise why are you doing it?).
Customers are increasingly skeptical about being a client of a lousy service: if you do something, be sure that all the aspects (UX, UI, Speed, Customer Service, Marketing) are well thought beforehand and executed flawlessly.
Justine Musk (Elon Musk’s former wife) said, “If you’re not obsessed, then stop what you’re doing and find whatever does obsess you”.
Building startups is about communication. You may expect it from marketing, salespeople, but maybe you forget about this skill when looking for a technical co-founder, because, even if there’s a poor communication “he’s a guru in what is doing”.
Good communication among co-founders is one of the main conditions for startups to live long enough to succeed.
Beyond business purposes, communication is responsible for harmony among co-founders and creates the right environment for follow-on hires to thrive. Disclosing personal thoughts, worries, satisfactions helps to strengthen the relationship, and that turns to be useful in high-stress periods. In the end, your co-founder is your “mate”.
Equity with VESTING
There could be an endless list of skills/characteristics that a person should match to be your next co-founder, I tried to highlight those that, in my opinion, affect the harmony among the people in a team the most.
Probably just one of those is recognisable from the start: “Hard skilled” — Ask for a portfolio to assess that, or, better, ask an “expert” (your friend, mentor) to validate the candidate’s skills.
All the others, some more some less, are assessable when working together, when difficulties raise and fast and and intelligent decisions need to be made, when brainstorming to decide x, y and z aspects of the MVP to be launched or simply sharing the desk or the carpet carrying out simpler, daily activities.
To bypass this uncertainty (You simply can’t know if a person is perfect for such a key role), there is one best practice I truly prefer: equity with vesting period with a minimum cliff.
The vesting period is a period of time in which a person accrues the pre-agreed equity stake if he accomplishes a certain goal (the goal could indeed be being fully committed within the company); at the end of this period the co-founder will be fully vested, meaning the he will own the totality of the equity initially granted.
The minimum cliff means that the vesting schedule is not enforceable until a certain period of time from whenever it was initially agreed.
Let me state a simple example:
31st December 2019. You have found your CTO and you’re planning to assign him 40% of the Company. This 40% has a vesting period of 4 years and a minimum cliff of 3 months. That means that he will be assigned 10% each year and the vesting schedule will start on the 1st of April 2020. If he stays in the Company, he will be assigned 10% on 1/4/2021, a 10% on 1/4/2022, another 10% on 1/4/2023 and the final 10% on 1/4/2024. At the end of the 4 years he will own the totality of the equity initially granted.
Of course you can have fun stimulating your financial creativity to set up these kind of contracts, but bear in mind that the legal aspects of vesting vary from Country to Country.
This article does not intend to be the recipe for a successful team: there’s no recipe. A lot of people’s soft-skills (essential as well) will be shown in a more hidden way over a longer period.
This article solely aims to warn you about the compulsory characteristics that should be matched every time teamwork is required. And, you know, great teams carry out great executions.