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This USC Professor Has Interviewed Hundreds of Co-Founders. Here Are the 3 Things He’s Learned About Successful Founder Relationships

It’s impossible for a company founder to do it all. Therefore a founder can hire co-founders to help. Once that happens, the founder must find a way to manage those relationships effectively.

Should the founder avoid conflict and difficult conversations or up front identify and negotiate mutually agreeable solutions to difficult issues? Can insights from relationships between startup founders improve your personal relationships as well?

USC professor Noam Wasserman has answers. According to the Wall Street Journal, he thinks it’s better to “go ugly” — meaning to confront difficult topics without delay. He also believes that insights gained from co-founder relationships can help with personal ones.

Wasserman has collected data on 20,000 founders and interviewed hundreds of them. He believes that overcoming the daunting odds against startup success forces co-founders to tackle difficult issues immediately, to humbly admit where each co-founder is strong and weak, and to identify risks and make short-term experiments to find ways around them.

Here are three strategies that Wasserman believes work for co-founder and personal relationships.

1. Immediately identify and solve difficult problems. 

People are afraid to talk about difficult topics. Wasserman found that the most successful founders have learned that avoiding difficult discussions can imperil their startup. So they “move quickly to identify and deal with any problem areas they see.”

For example, he talked with three friends who started a company — one of whom had a stable full-time job and a new child. The other co-founders worried that the new father would ultimately walk away from the startup with his founder shares.

The three co-founders confronted the issue and agreed on a plan for how they’d treat a co-founder who left the startup. The difficult conversation paid off when the new father ultimately decided to leave: the remaining two recovered the founder shares of the departed co-founder and used them to hire a replacement co-founder.

2. Use Short-Term Experiments to Manage Key Risks

Often founders make critical decisions without adequate information. Wasserman found that the most successful entrepreneurs limit the risk that those decisions will go bad by setting up what he calls an ‘undo key’ — which I’d describe as time-limited experiments.

He studied a founder who began working with a potential co-founder whom he did not know well. Rather than split the startup’s equity 50-50, they agreed to work on a two month project after which they would decide whether to join forces. The project revealed that they had mutually incompatible working styles. After two months, they parted ways.

3. Beware of strict equality.

When deciding how to divide up work, co-founders seeking to avoid painful arguments might agree to give all co-founders an equal amount of work — and share of the equity. This can create big problems for a startup should one co-founder lose interest and leave with his equity stake.

Wasserman found that the most successful give each collaborator authority over a specific area that suits his or her passions and expertise. An online music company he studied applied this idea — splitting up the work between its three co-founders based on the strengths of each — and later became a prominent player in the industry.

I agree with Wasserman on these three strategies for successful startup relationships. You’ll be better off if you follow them.

The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.

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