Starting a business can be a lonely and stressful experience. That’s why sometimes two heads can be better than one.
Launching a new business can be an exciting but lonely process. As a solo founder, there’s a lot of pressure coming onto your shoulders and making the right decision can be difficult. That’s why it can be better to co found a business with one or more partners. Indeed, many investors say they will shy away from businesses which were founded and are operated by just one person. While there may be friction and the process may not be for everyone, here are a few reasons why co-founding a business might make sense.
Two heads are better than one
As a founder of your business, you will also be its biggest asset and potentially liability. That’s because so much depends on you. In those early days you’ll be doing the bulk of the work, driving the value which helps it to grow. You’ll be setting the business model, drawing up the business plan, presenting to investors and making the strategic decisions for your business.
You’ll also be handling all the detail, making sure the finances are in place and that the business is run in a competent and responsible way. There will be a huge range of tasks to take onto your shoulders and if you don’t happen to be good at all of them your business will suffer. Every year, hundreds – even thousands – of businesses will hit the rocks because of mistakes and bad decisions made by their founder.
The truth is that two heads are better than one. Co-founders often complement each other – with each bringing skills and experiences that the other lacks. Take, for example, the combination of Steve Jobs and Steve Wozniak – co founders of Apple. While one was a genius with computers it still took the talent for sales and business acumen of Steve Jobs to transform a small business started in a garage into the multi-billion-dollar behemoth we see today.
At the very least it can be useful to have someone to bounce ideas off – someone who comes at things with a different perspective and can challenge your authority. As a new business owner one of the most valuable things you can have is when someone comes to you and tells you something is a bad idea. Most experienced entrepreneurs can look back on their career and cite dozens of moments when a mistake cost them and their business dearly. Having a co-founder on your side can cut some of those mistakes off at source.
Making decisions
Two heads in the decision-making process does not always run smoothly. Differences of opinion can lead to arguments and cause friction at the top. When co-founders aren’t getting along, the trouble can filter down across the entire organisation. However, effective co-founders are those who recognise the value of differences. Heated discussions might take place from time to time, but this can be viewed as a good thing as long as matters do not get out of hand.
The reality is that every day will bring a host of challenges and key decisions which can affect the future of your business. Facing these alone can be extremely stressful. Having someone else to talk through those problems and work towards a solution can be incredibly helpful.
Just by having someone with a different perspective or set of skills in the room can be comforting and incredibly helpful. In many cases, your co-founder(s) may come up with solutions you hadn’t imagined yourself. This could be the perfect tonic which helps your business overcome a seemingly insurmountable problem.
Knowledge and contacts
Industry knowledge and contacts can be incredibly useful. It helps you understand how your chosen market operates, spot which way things are going and make informed business. Contacts built up over your past career including former employers, colleagues and other partners can also open up all sorts of doors which might not be available to someone else.
Having one or more co-founders on your side simply magnifies these opportunities. Two or more people can give your organisation a huge amount of knowledge about a market. Their contacts could be added to yours to create all sorts of opportunities for growth.
In some cases, your business partner may be coming from another industry or discipline. In these cases that additional experience might also prove useful. For example, imagine you have a business idea which you think will work well in another market. A co-founder might bring his or her own background to bear to see how this business model might be adapted to work in another market. At a stroke the potential market for your product or service will have been effectively doubled.
Flexibility
A major skill for any business leader may be the ability to pivot. For example, back in the early noughties, the founders of Twitter, were focused on something entirely different – Odeo a podcast network. However, early on they spotted that things might be veering off course. The podcasts were not nearly as popular as they hoped and fearing competition from i-Tunes they sat down and gave themselves two weeks to invent something else.
The idea they came up with was a micro blogging platform requiring people to make posts of 140 characters or less. The rest as they say is history. Twitter (it Twittr as it used to be) is one of the biggest social media platforms in the world.
The harsh reality is that, as good as you think your business idea is, there may come a time when things aren’t working. Either the market might not be there, or something may be wrong with the mechanics of your business. When that happens, you need the flexibility to try something else.
A single founder may be too inflexible, wedded to the original idea to make the necessary changes. Having more people at the top could bring more ideas to the table which could help you choose a better direction. In many cases it may be an issue of an original idea from one founder which is tweaked by another to find a more lucrative market.
It’s not all plain sailing
As much as starting a business with a co-founder can be an effective and rewarding strategy it is not without its risk. As mentioned before friction at the top can be good, as it may improve decision making and create more opportunities. However, when things get out of hand and the relationship turns sour, the problems can escalate. Having a dysfunctional top team which fundamentally disagrees on strategy can be toxic for the entire business. In situations such as this one of the founders will need to know when its time to step aside. Identifying when or if that moment comes could be one of the most difficult, but critical decisions you take.
