So, you have a million-dollar business idea, but haven’t started working on it. You might be wondering: “do I need a co-founder?” Most successful start-ups or tech businesses have multiple founders. Google, Facebook, Twitter, LinkedIn, YouTube, Groupon, Uber, Square, Instagram, to name a few. But does it make sense for you? For some businesses, having co-founders occurs organically. You discuss a business idea with a friend or group of people and start working on it together. However, in many cases, bringing on a co-founder (or co-founders) will be a conscious decision. In this article, I will look at six questions that will help you determine if getting a co-founder is right for you and, if so, what to look for in a co-founder.
DO I NEED A CO-FOUNDER?
Probably not. You might need a co-founder in one of two scenarios: if you don’t have the money to hire an important role (because you’re not making sales yet or you haven’t raised capital); or there is someone so incredibly talented with knowledge that you need to start the business. However, in most cases you don’t need a co-founder to get started. Most businesses can begin with a credit card and laptop. It’s also possible to raise capital from a business plan or start selling your product via crowd funding with just a design. Either way, whether you need a co-founder or not, the more important question is: would it be better to have a co-founder?
IS IT BETTER TO HAVE A CO-FOUNDER?
Probably. Empirical evidence suggests that having a co-founder can help your business succeed. At a minimum, having a co-founder can help you build a billion-dollar business. Out of the 39 tech companies belonging to the Unicorn Club (US-based software companies founded after 2003, and valued at $US1 billion or more by public or private market investors), only four had one founder. Facebook, Twitter, Youtube, LinkedIn, Pinterest and many more all had multiple founders. From personal experience, in growing and running DesignCrowd with my co-founder Adam Arbolino, working with another person is better than working with an employee. You get two main benefits: to work with someone who is more talented; and to work with someone who is as driven as you to succeed.
WHEN SHOULD I GET A CO-FOUNDER?
The first option is to get your co-founder (or co-founders) early. The person is by your side from day one and knows as much about the company and its early days as you do. If you decide to get someone from day one, you need to be prepared to give them an equal stake in the business. The alternative is to try to progress your idea as far as you can on your own, and bring business partners on board at a later date. This means you have full control of the start-up stage of your business, including how it works, what it looks like, who works for it and more. If you can do this, it might be a better path for you personally, but not necessarily for the business (as you might not be able to grow as quickly). At DesignCrowd, I co-founded the business with Adam and he helped develop the idea and built the software. However, he did not start working in the business full time until two years later. In hindsight, it might have been better to get him involved earlier – but both paths work and it’s just a matter of personal preference.
WHAT SHOULD I LOOK FOR IN A CO-FOUNDER?
Talent and fit. Firstly, you need someone that will perform an important role for the business. This role should be different to your role and, ideally, you also want to find someone with a complementary skill set to yours. You want someone who has strengths that you don’t have and someone that will fit what the business needs. Whether the person has the same skill set as you or a different skill set, you need to look for someone special. You want someone who is smart, someone you can trust, and someone who will work hard. At DesignCrowd, Adam is our chief technology officer and I’m the chief executive. Adam is more technical while I’m more business-focused. Our complementary skill-sets have been critical to our success.
HOW MANY CO-FOUNDERS SHOULD I HAVE?
You want two to three co-founders or business partners. This appears to be the sweet spot for achieving hyper-growth and success – the vast majority of billion dollar start-ups have had two or three co-founders. While it’s possible to build a great business with five or more founders (Palantir, LinkedIn or Zynga), most ultra successful startups (Facebook, Airbnb, Uber, Groupon) have two or three founders.
WHERE CAN I FIND A CO-FOUNDER?
First, look at your personal and professional network. Your ideal co-founder is probably someone you already know. Google, Yahoo! and Facebook were all founded by people who met at college. SEEK was started by two brothers (Andrew and Paul Bassat), while Atlassian was started by uni friends (Mike Cannon-Brookes and Scott Farquhar). From personal experience (having studied with Adam at university), starting with someone you know gives you a higher degree of confidence. Someone you know is talented and someone you can trust.
So, start with your peers. People you’ve studied with or people you’ve worked with previously. If this fails, there are other options: co-working spaces, incubators, and start-up events (like Startup Weekend). These are hot beds for talented, like-minded and entrepreneurial people. You can even use founder “dating” sites.
In summary, if you want to turn your million-dollar idea into a million dollar business, then a good co-founder or business partner can help you. The bottom line is, great businesses require great people and some of the most talented people in the world will want to be involved in founding a business. They don’t want to be an employee, they want to be a co-founder or a partner with equity. They want to join early, they want to take a risk and they want to change the world – just like you. Whether you have a co-founder or not, you have the potential to succeed. The most important thing is getting started. If you have a million dollar business idea – start today and don’t look back.
** Original Article by Alec Lynch- http://www.brw.com.au/p/entrepreneurs/lynch_designcrowd_founders_are_the_nT8YdSkB3M1vF3Qm4n2gaM