Thoughts on Being a Co-founder
Being a co-founder is hard. And we’re nowhere near the busiest we’ll ever be, or the most stressed we’ll ever be… in fact we’re just getting started.
I think the hardest things for me so far are:
The incredible number of unknowns.
Until we’ve done significant customer discovery or started bringing in revenue, everything is going to be an educated guess (including where to begin with customer discovery).
Trying to optimize our efficiency.
There are infinite directions we can go in, infinite problems to tackle, infinite areas of research, etc. Having never been faced with this many options before, we are forced to base our decisions on what we read online, advice from mentors, etc. – but never on our own experiences. Optimizing one’s efficiency is a product of two factors: what needs doing and how quickly it can be done. There’s plenty of guidance on the former, but without any experience in a lot of these areas, the latter is a big question mark for many of these early-stage tasks.
Strengthening my weaknesses (or lack of opportunity to do so).
For me, part of the draw of starting a company was the thought of wearing many hats. I was excited about simultaneously pitching, selling, getting feedback, making strategic decisions, and building a product. In reality, I understand that my core strength is building the product. Lately, whenever I find myself wanting or needing to shift focus to one of my weaknesses, I worry about the effect it will have on product development. Instead of being excited about developing weaknesses, like I thought I would be, I stress about not playing to my strengths and the effect that is having on the company as a whole.
None of those are that surprising to me. Here are some things that, for better or worse, have been surprising:
Differences between co-founders and early employees.
I used to naively think that early employees get a raw deal because their equity percentages are much lower than co-founders’, while (if you’ve hired right) they typically don’t really work that much less than the founders, and they are almost as influential to the trajectory of the company. In reality, I now see that there is a major difference… at least in our case, the three of us are taking a much bigger risk financially and professionally than our first employees will be.
Sure, as an early employee of a startup, you are taking a risk w/r/t job security and usually a salary hit as well, but you’re (usually) being given equity that you will be able to directly affect by doing good work, any benefits associated with the job (e.g. flexible work hours, health insurance), and exciting, engaging work that will further your career since you will learn more and do more diverse tasks as part of a startup.
On the flip side, co-founders risk having a massive “hole” on their resumes from the time spent working on the startup. Having been a hiring manager before, I’ll be honest and admit that seeing that an applicant has attempted to start their own company before prompts concerns about whether they are just applying in a short-term capacity so that they can leave in a year to give it another shot… as much as it may be unfair for that candidate, it’s a valid concern for the hiring manager. Co-founders also invest their own money and/or take much bigger salary cuts (e.g. 100% until funding). Hence the larger equity stake. But that’s clearly a long-term play. Would you rather have guaranteed money now or a minscule chance at money later?
My advice to early employees (let’s pretend I’m qualified to give it) who feel like they deserve more equity than they are being offered is to ask themselves if they would be willing or able to work for free for closer to founder-level equity. I’d guess that most people would have to answer “no” to that one. If you can answer “yes” and you’re a risk-taker, and you believe in the company, present that option to them! They might consider it. I know I’d probably give up significant equity (that vests) for free work at this point in our startup. :)
Personally I’ve always been a little more willing to take risks than my friends when it comes to money so I wasn’t too worried about my personal finances when I started this journey, and I’m still not. What I am concerned about is my co-founders’ finances, the business revenue model, our runway, etc. I’m probably an investor’s ideal founder in this regard because I tend to worry about other peoples’ money more than my own. But I legitimately do worry about it and sometimes I have to just take myself back to the basics and remember to Keep It Simple, Stupid. I have to remind myself of the characteristics that the three of us (founders) have. We’re smart, resourceful, professional, hard-working, kind, and have a “hustler’s” attitude and therefore it’s inevitable that we’ll find a way to make things work*.
*Disclaimer: We have to believe this. We have no choice. :)