“Happy families are all alike; every unhappy family is unhappy in its own way”. I wish I could take the credit for these profound lines but it was from another gentleman ‘Leo Tolstoy’!
Now this has come to be known as Anna Karenina principle which in other words says that in order to be happy, a family must be successful on each and every one of a range of criteria e.g: sexual attraction, money issues, parenting, religion, in-laws etc. Failure on only one of these counts leads to unhappiness. Thus, there are more ways for a family to be unhappy than happy.
Peter Thiel touched upon the same in his book where he claims that in business the opposite of the above principle applies i.e. “All happy companies are different. All failed companies are the same.”
Come to think about it, it does make a hell of a sense. Happy start-ups are those successful ones who have solved some unique problems of customers and gone on to validate their assumptions. Failed ones, well …there are so many ways to fail. For a Start-up to be successful, all those risks should slowly and steadily go away. More often than not, Murphy’s law does apply that everything that can go wrong, will go wrong!
Among the main reasons to go down, one that stands out is the team. Well there’s a reason why all the top investors and accelerators place such heavy emphasis on the team. Ideas change, products pivot, markets can take unexpected turns, but people are what hold everything together. A great team is not just about selecting a group of smart people; it’s about complementing each other’s strengths and mitigating each other’s weaknesses.
And one of the most significant aspect of the team is the partner, the co-founder. This point hit home last week when I was in discussion with one of the co-founders; this was for a start-up with an idea whose time has come – it could really be something huge & successful but for the fact that things have gone south between the two co-founders. It is a shame on what could it have been! So what is the deal with the founder-cofounder equation. Is it really that critical?
The answer is an unequivocal Yes! Co-founder disputes have historically been one of the top reasons start-ups fail at the earliest possible stage. Founder drama happens even in situations where you wouldn’t expect it to crop up. Success will cover up many sins. When things are going up and to the right, things might be going wrong underneath and you won’t be aware of it. But one can’t count on good times forever — winter does set in. When the honeymoon ends & there was no healthy foundation to support the company, the co-founder marriage falls apart.
At IA, we always looked closely at how well co-founders know each other before they started. Most people think of good co-founding pairs in purely functional terms: a business person paired with a technical person. This is deeper than that, because when conflict does arise (and it always does), if you have nothing in common other than the start-up, you’ll struggle to find common ground at the worst of times. It’s necessary for founders to have something in common, but not sufficient in and of itself.
We had history, but we learned history is not enough — you’ve got to maintain it like any relationship. It isn’t enough that you’ve been friends for years. It matters what your relationship is like now. It is always advisable to have more than a single founder. But being a solo founder is better than having a bad co-founder. Do remember that Co-founders are much harder to get rid of than be found!
When do you know that time is up? The moment the Four Horsemen of the Apocalypse show up: ‘defensiveness’, ‘criticism’, ‘contempt’ and ‘stonewalling’. When psychologist John Gottman (author of the Four Horsemen concept) identifies those behaviours in marital relationships, he’s able to predict relationship failure with uncanny accuracy. The same thing holds true for co-founders. When that happens, it is time to take a serious look at the future. Time for the vesting clause to kick in or the pre-nuptial clause as the case may be!