There are few relationships I have seen consistently give more stress to a founder & CEO than that of the co-founder relationship. I’ve had conversations with hundreds (thousands?) of founder/CEOs over the past 15+ years that I’ve lived in the Bay Area. The co-founder relationship is both the most common relationship I’ve seen cause stress (probably by 20-30% margin) and by far the cause of the most stress by magnitude when it comes up (by 200% margin).
It is rare when co-founders meet at the inception of a company, though it happens. Much more common is that the co-founders have known each other, at least peripherally, for years. Perhaps they worked together or perhaps they had social relationships. They have talked for months about the market opportunity and the product, about how big the company could be and the impact it could have on the world. They got each other excited about the prospects of working together. Of their network of engineers. Of their ability to sell the product, or build the product. They got excited because one of the co-founders has incredible VC relationships. The market opportunity is huge (lots of focus there…..) and one of the founders has a childhood story that they can credibly use to justify why they are passionate about the idea. After all, no one wants to fund someone who is just here for the money — great companies are born out of frustration and passion, not greed.
From what I’ve experienced and observed, the situation above very often leads to an early and difficult breakup of the founders. Sometimes it’s because one of the founders realizes she was never, or at least is no longer, passionate about the mission or product. More common is that the founders have a power struggle which results in the loser exiting the company — typically painfully. They discover they have different values, or perhaps they realize they have a misalignment in vision for the company or product. Even the small issues can feel like major problems, particularly when you’re under tremendous stress and pressure to build quickly. The relationship falls apart. They begin to talk less to each other. There is clear tension. Perhaps they fight openly in front of teammates or backchannel negative comments about each other to board members. I’ve rarely seen these tensions handled effectively enough for both founders to stay at the company. More common is for one to exit, sometimes after months or even years of fighting. In the CEO support groups I’ve been a part of, co-founder fighting is a common theme, and one that is exceptionally painful for both the co-founders and the company.
The most effective co-founder relationships I’ve seen have been based on shared values. This was true of me and my co-founder, Rory, and that worked well. I hear others point to complementary skill sets and backgrounds (i.e. not 2 business backgrounds). I think that’s helpful and typically adds more value to the company than overlapping skill sets (with rare exceptions). But I think by far the most important thing to establish before entering into a 7-10 year co-founder relationship is shared values.
Understanding what values are important to you and what values have been present in your successful relationships, both personal and professional, is extremely helpful when considering what to look for in a co-founder relationship. I’m someone who works hard and I need my teammates to work hard. I value raw intelligence over experience, and I struggle to be in a relationship with someone I don’t respect intellectually (Rory once said I “don’t suffer fools”). I love partnering with people that take true pride in their work. “Only sign your name to something you’re truly proud of” is an expression I’ve heard countless times in my life, and it has always resonated. I like being around people I respect, and struggle to have relationships with those that I don’t. I’m not proud to admit this but when I don’t respect someone I tend to struggle to look them in the eyes, struggle to talk with them and the relationship deteriorates quickly. Several other teammates of mine have observed this and commented on it proactively over time. Respect shows up for me in a lot of ways — including being on time, being honest and direct, and being responsive and timely in communication. I have also found that my best relationships are with people that are simply great teammates. That can show up in a lot of ways. A close friend of mine in college, Kieran, once wrote me a long letter saying that he didn’t think I was treating a friend of ours respectfully. To me, that is being an amazing teammate. He was right, but that’s beside the point. More important in my opinion is that he had recognized that I wasn’t living my values, I wasn’t treating someone that I cared about well, and that he had the courage to proactively tell me something difficult. My co-founder Rory did things like that frequently. These are the relationship values I’ve found to be important throughout my life, and when I look at the relationships that thrive, and those in which I thrive, the other person possesses these traits. They build trust with me.
After being a CEO for nine years, I’ve discovered that I also enjoy being around others that bring joy to their work, particularly in the form of laughter and a sense of humor. Being a founder is stressful. Working at a startup is stressful. I’ve found that I gravitate disproportionally towards those that can handle stress with grace and particularly those that demonstrate a sense of humor. I wrote a User Manual that I will use in entering into future partnerships.
To be clear, I’m not saying these are necessarily the right traits or values for someone else to look for. Your values and what you need in a co-founder are unique to you. I just believe in the process of working hard to identify what matters to you most in relationships and then using that insight to find the right co-founder. In my experience, whether that person has a technical, product or business background is less of a predictor of success than whether you have shared values.