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Speaker 1

00:09

Good morning, everyone. My name is Kat. I'm a software engineer here at YC and I lead the startup school team. Today I have visiting group partner Divya with me, and we're going to talk about everything relating to co-founders.

Speaker 1

00:20

So what is a co-founder? Where do you find a co-founder? How do you evaluate a co-founder? And once you have 1, how to work together.

Speaker 2

00:26

Thanks so much for having me, Kat. I'm really excited to talk about this today, actually. Finding the right co-founder is arguably the most important part of starting a company.

Speaker 2

00:35

I've seen so many startups fail or succeed due to co-founder issues. And so I'm really glad we're doing this today.

Speaker 1

00:41

Yeah. And to start things off, let's clarify something. What do we mean by the word co-founder?

Speaker 2

00:46

Yeah. So quite literally, a co-founder is someone who starts your startup with you. So when you apply to YC, we consider someone to be your co-founder if they have at least 10% equity, but in general a co-founder is someone who is there from the beginning or close to the beginning who is building your company with you.

Speaker 1

01:02

So if I'm hardworking and smart, can I just start my startup alone?

Speaker 2

01:05

So yes, Kat, you're very hardworking and smart, and I don't doubt you. The short answer is yes, you absolutely can. But it's really hard, like really, really hard.

Speaker 2

01:14

You know, A startup is a very difficult journey for anyone, and doing it alone makes it more than twice as hard. And so we really recommend having a co-founder for the following reasons. So number 1 is productivity. So moving fast is critical in a startup.

Speaker 2

01:30

And when you have 2 people, 3 people, you can literally move 2 or 3 times as fast. You can just get so much more stuff done. Additionally, your brainstorming can be higher quality, right? You can help each other see around corners.

Speaker 1

01:42

And bounce ideas off each other.

Speaker 2

01:44

Exactly. Kind of maybe not get into a rut with a bad idea, have someone checking. Accountability is a little bit more effective when there's someone else there. You do your daily stand up and say, this is what I'm gonna get done today, and then there's someone there the next morning to ask you whether or not you did it.

Speaker 2

01:59

And then I think moral support is another huge and sometimes overlooked component. So a startup has a lot of ups and downs. There's moments of optimism, there's moments of despair, and having someone that can both empathize with you but also balance you out in some of those scenarios can be just so helpful to

Speaker 1

02:13

keep moving. If you're not convinced by those theoretical reasons, it turns out that the empirical evidence also supports having a co-founder. Most successful companies have been started by more than 1 founder.

Speaker 1

02:24

Even companies that are famous for only 1 of its founders actually had at least 2. Microsoft, we all know Bill Gates, but Paul Allen was around for 10

Speaker 2

02:32

years. Apple, so Steve Jobs is the face of Apple, but Steve Wozniak was the 1 who designed and built the Apple computer. And little known fact, they actually had a third co-founder, Ronald Wayne, he left pretty early, but there were 3 of them in the beginning.

Speaker 1

02:46

Yeah, and Facebook, or I guess Meta now, if you've seen the social network, you'll know that Mark Zuckerberg had not 1, not 2, not 3, but 4 co-founders. So the list obviously goes on and on, but we also have some quantitative data to share. So while YC does fund solo founders, yes, we do, we do fund solo founders, of YC's top 100 companies, only 4 were founded by a solo founder.

Speaker 1

03:09

Are there really only 4? Yeah, yep. And in those cases, there is a clear pattern among the solo founders as well. They are always able to make progress on their own.

Speaker 1

03:19

So they built their own MVP, they got their own users, et cetera.

Speaker 2

03:22

Yeah, so I actually know some of these guys. They're exceptional. And it's worth repeating then that while having a co-founder dramatically increases your chances of success, YC actually does fund solo founders.

Speaker 2

03:33

We believe that ultimately you are the best judge of whether having a co-founder is the right call for you.

Speaker 1

03:38

Yeah, absolutely. But if you are convinced that you need a co-founder, let's talk about where to find 1. Divya, any ideas?

Speaker 2

03:45

Yeah, so the obvious place to start is people that you know. So friends, classmates, colleagues. If you're in school, this is an awesome time to find a co-founder, right?

Speaker 2

03:54

You're surrounded by classmates, friends, people who'd be fun to work with. Fewer responsibilities. Yeah, fewer responsibilities for sure. If you're working at a company, look to your coworkers that are smart, capable, impressive, people that you work well with.

Speaker 2

04:08

And beyond that, look to other people in your network, friends, friends of friends. And if you see someone who you think might be a good match, work on a project with them, right? Like this can be a lower commitment way to test out your working relationship, your skill sets, than an actual startup. And you can kind of get a sense for what it would be like to work with them.

Speaker 2

04:26

As an added bonus, the kind of person who wants to work with you on an evening or weekend project is like usually really good co-founder material. Yeah, that makes sense.

Speaker 1

04:35

Yeah, these are all really great avenues for finding people you know in real life. In parallel, I would also highly recommend checking out YC's co-founder matching platform. Here's how it works.

Speaker 1

04:44

When you sign up, you tell us about yourself and what you're looking for. So we ask you stuff like, are you technical? Do you have an idea you're working on? Or are you open to new ideas?

Speaker 1

04:52

How many hours a week are you willing to commit? What industries are you interested in? Can you be responsible for, you know, engineering, sales, product, etc.? So once you've done that, Our team will manually read and approve your profile, just to make sure you're not a robot, you're not a dev shop out here.

Speaker 1

05:06

And once you're approved for the platform, you can then look at profiles that pass your filters. If you see someone interesting, you can send them a message. And if they're also interested in you, they'll match with you. We recently also built a new feature that we called speed dating.

Speaker 2

05:19

I love that.

Speaker 1

05:20

It does come from the concept of speed dating. You set aside an hour to be online, you match with other founders for 5 minutes of one-on-one video chat at a time. And it's just a really great way to quickly meet tons of people interested in starting startups, which is already a pretty big filter.

Speaker 1

05:35

That sounds really helpful,

Speaker 2

05:36

kind of especially as part of YC's greater ecosystem. Kat, how many users do you have?

Speaker 1

05:41

Am I in office hours? Well, I do know the answer to this question. So we launched Codefinder matching early last year.

Speaker 1

05:49

We now have 40,000 profiles on the platform and we actually just crossed 100,000 matches last week.

Speaker 2

05:54

100,000 matches is pretty impressive. Do you have any success stories you can share?

Speaker 1

05:58

I do, and I'm really excited about it. So while it's a little bit early to say if these teams will last, you know, 7 to 10 years, we have seen some really promising early signs. Over a dozen teams have met on the platform, decided to be co-founders, applied to YC together, and actually gotten accepted.

Speaker 1

06:15

That's awesome. I have an example. This is Sequin. So Verinda was a PM at Visa where she launched credit cards like the Chase Sapphire Reserve.

Speaker 1

06:22

She left her job and spent about a year working as a solo founder on a product to help women build credit. She was looking for a technical co-founder who was mission driven and had FinTech experience. Mark had 10 years of engineering experience at PayPal. He spent 6 years as CTO of family-oriented startups, and he wrote on his profile that he cared deeply about gender equity.

Speaker 1

06:41

Such a good match. So they were a perfect match on paper, and it turns out they were a perfect match in real life. They met on Zoom, they just vibed instantly. So they arranged to meet in person, they met every day for the next week in person.

Speaker 1

06:54

And so it was really easy for them to decide to work together. These guys went through YC and raised $5.7 million. That sounds like a dream actually.

Speaker 2

07:01

It sounds like kind of a love at first sight co-founder matching scenario. Do all co-founder matches take so quickly or do you have examples of things that maybe took a little bit more time to take?

Speaker 1

07:11

Yeah, yeah. So, you know, every story is a little different. So this is Kiwi Biosciences.

Speaker 1

07:15

They're another team from the Summer 2021 batch. These founders were actually some of the earliest users of co-founder matching, which is really cool. Like first couple hundred users. Angie started a company to solve her own pains with irritable bowel syndrome.

Speaker 1

07:26

David had experience in this industry. He actually started a startup in the same problem space before. So she knew right away that he was the 1. But when they first met, David was actually working on a trial project with a different potential co-founder he met through the platform.

Speaker 1

07:40

Plus he didn't like her idea. He thought her idea would never work, and so he ended up just being an advisor instead and they met once a week for a while. But eventually, even though he wasn't sold right away on the idea, he was really impressed by Angie as a founder. He believed in her.

Speaker 1

07:54

So they eventually took a very structured approach. They filled out this 50 question long co-founder questionnaire and spent a month working on a trial together. And by the end of that month, it was easy. So they also went through YC and they raised like $1.5 million.

Speaker 2

08:07

As an aside, that's interesting that he didn't love the idea but thought Angie was awesome. This is something we see in general across the space. So that's-

Speaker 1

08:14

And even at YC.

Speaker 2

08:15

Yeah, even at YC. So while we're on the top of co-founder matching success, can you share any tips on getting the most out of the platform for anyone out there that's gonna use it? I imagine that some of this advice actually applies more broadly to a co-founder search, whether

Speaker 1

08:28

or not it's on the platform, but like what have you seen? Yeah, I would love to talk about this. So I have 2 main tips.

Speaker 1

08:34

Number 1 is just really fill out your profile. It sounds basic, but the difference between 10% and 100% effort is very apparent, especially when you're comparing these profiles side by side. So what I mean by that is, you know, put up a picture or a video. Photos are optional on the platform, but it helps make you look like a real person.

Speaker 1

08:52

You should brag a little. So some people, especially women or people from other cultural backgrounds, value humility a lot. But this is not the time to be humble. Potential co-founders don't know you.

Speaker 1

09:03

They're only seeing a snapshot of you. So you really want to sell yourself here.

Speaker 2

09:06

Yeah, you want to stand out from the crowd, right? Like this is the time to just like put your achievements front and center.

Speaker 1

09:11

Yeah, and I think this is especially important if you are a non-technical founder with an idea trying to recruit a technical co-founder. This is a really common case on the platform. But the thing is that technical founders get lots and lots of invites.

Speaker 1

09:24

And so you have to differentiate yourself by bragging about your accomplishments and maybe show them the progress you've made on your own. There's a huge difference between someone saying, hey, I have a great idea. I'm just waiting for someone to help me build it versus like, hey, I'm working on an idea. I have an MVP.

Speaker 1

09:39

I have some users and I want a partner to come help me build it out.

Speaker 2

09:42

Yeah. Remember, people are joining you as a person, not your idea. Right. Exactly.

Speaker 2

09:46

So like show what you can do as a person.

Speaker 1

09:48

Yeah. The second thing I would say is meet as soon as you can in real life if possible, but Zoom is also great. According to stats from our platform, 70% of all meets happen within 2 weeks of matching. So what I'm gathering is you either meet really soon or not at all.

Speaker 1

10:04

All right, now that we have some avenues for finding potential co-founders, let's talk about how you know if they're a good fit for you. Divya, you've started multiple startups. What are some things you look for when evaluating a potential co-founder?

Speaker 2

10:16

Yeah, so this might sound extreme, but a co-founder relationship is like a marriage. And it's really important to get this right. And in many cases, you might spend more time with your co-founder than you do with your actual spouse.

Speaker 1

10:30

Especially if things are going well.

Speaker 2

10:31

Especially if things are going well, exactly. So I want to talk about a few things to align on early. And we're going to talk about some of these again when we talk about working with your co-founder.

Speaker 2

10:39

But early on, here's some conversations to have. So 1 is goals and values. So what motivates you? Why do you want to do a startup?

Speaker 2

10:48

How stress, so how do each of you handle stress? And how will you help each other handle stress? Are you able to provide what the other person needs? Because there are going to be stressful times.

Speaker 2

10:59

Communication. So, can the 2 of you or 3 of you have an honest and frank conversation with each other and still move forward productively? Finances are a very important 1 to talk about early. How long can each of you go without a salary or with benefits?

Speaker 2

11:15

What salary requirements do you have? Is there kind of a timeline in mind which you'd need to have more of a market rate salary or raise money? Make sure there's some alignment on this, or at least a conversation. And lastly, commitment.

Speaker 2

11:30

How many hours a week can you work? What do evenings and weekends look like? Are you guys on the same page around this? There's no right or wrong answer, but these conversations need to be had early on.

Speaker 2

11:41

And then lastly, Kat touched on this earlier, but meet in person if you can. It's a lot easier to communicate and get a sense of compatibility and communicate some of the nuance on the above topics if you're actually sitting face-to-face with someone.

Speaker 1

11:56

I'd like to also add on a counterpoint. There are some things people tend to think are important but maybe aren't actually so important. So specifically what I'm talking about is complementary skills.

Speaker 1

12:06

I got an email the other day from a founder telling me they needed to find someone to help fundraise and bring in a network of potential investors and experienced board members. No, no, you don't. You can learn that. Actually, most skills are very learnable.

Speaker 1

12:21

So that includes fundraising, marketing, even sales. It's much more important that you're compatible with your co-founder in the other ways Divya mentioned above.

Speaker 2

12:28

Yeah, so there's 1 exception to this rule, actually. And so absolutely right, You don't need someone who can come in and, like, do your fundraising for you. But if you're non-technical, you should really think seriously about getting a technical co-founder.

Speaker 2

12:40

And 1 of the most common questions we get from non-technical co-founders is, I can't find a technical co-founder. What should I do? Can't I just hire a dev shop to help me build out my product? The short answer is, please don't do that.

Speaker 2

12:53

If you really can't find a technical co-founder, you should learn how to code. Dev shops pose a ton of challenges, especially for really early stage companies. You know, not only are they costly from day 1, but it can be extremely challenging to iterate quickly as you're learning from your users. You know, dev shops are designed to ship clear deliverables.

Speaker 2

13:14

And as an early stage startup, like you don't have a clear deliverable. You're kind of feeling around in the dark and building for your users, and the requirements are changing on the fly.

Speaker 1

13:24

They also don't care about your user. They're just like, I'm going to do this thing, and you're going to pay

Speaker 2

13:28

me. Exactly. And iteration can just become really clunky, ineffective, and again, very expensive. So in short, a technical co-founder is an amazing investment early on if you can find 1.

Speaker 1

13:40

The last thing I want to bring up in this section about evaluating co-founders is trial projects. The only way to tell if you work well together with someone is to try working together. So at Co-Founder Matching, we recommend that before jumping into a full-blown co-founder relationship, you work on a trial project together first.

Speaker 1

13:57

Essentially, you agree beforehand on a timeline, usually 2 to 4 weeks, a tangible project goal and scope, and also who owns the work at the end. It's a very structured way to try working together with some mutual expectations. I do want to say, though, remember at the end of the day, just like with any other risk you take in life, you will eventually need to take a leap of faith. And that's especially true when you're starting a startup, which is risky in all sorts of ways.

Speaker 1

14:19

So find someone you're willing to take a leap of faith with.

Speaker 2

14:22

Yeah, absolutely. And we talked a little bit about de-risking things, and a lot of these questions we talked about earlier are ways to de-risk that co-founder relationship. But again, de-risk it until the point you can, and then you just gotta go.

Speaker 2

14:34

So, let's say you found someone you want to work with, you know, using co-founder matching or 1 of these other ways we talked about. So now I want to move on to an important topic, which is how to split equity with your co-founders. So the general YC advice is that by default, you should just split equity equally. So there's lots of options here, but you can kind of start from that baseline.

Speaker 2

14:53

And the reason for this is because, you know, you would like to be making equal contributions going forward, and you should both be equally motivated to work hard for a very long time. You should value your co-founder. And if you don't, like, why are they your co-founder?

Speaker 1

15:07

But Divya, I came up with the idea.

Speaker 2

15:10

Ideas don't matter. Ideas are cheap, right? And if things go well, first of all, The idea is very likely to change over time as you listen to your users.

Speaker 2

15:18

But if things go well, you're going to be working together on this for the next 7 to 10 years or more or more. Exactly. So, you know, the point in time that you came up with the idea is just such a small part

Speaker 1

15:28

of your

Speaker 2

15:28

startup journey.

Speaker 1

15:30

Right. That makes sense to me. So here are some other really common bad reasons we hear for splitting co-founder equity unequally. So of course I came up with the idea.

Speaker 2

15:39

I started working on this idea before my co-founder did.

Speaker 1

15:41

My co-founder took a salary and I didn't.

Speaker 2

15:44

I'm older and I'm more experienced than my co-founder.

Speaker 1

15:46

We need someone to tie break when we have arguments. So there is a good point here about needing a tiebreaker, but we'll talk about that in a second. It doesn't need to be done through equity.

Speaker 2

15:54

Exactly. I launched my MVP without my co-founder. My co-founder agreed to their smaller share. Another 1 is, you know, I raised so many thousand dollars before my co-founder joined.

Speaker 1

16:04

So even if you think you got a good deal now, this could potentially result in resentment later down the line.

Speaker 2

16:09

Yeah, you shouldn't be trying to get a good deal from your co-founder. Like it kind of starts the relationship off

Speaker 1

16:13

on a bad foot. Yeah, so The bottom line here is all of the work is still ahead of you. You both need to be happy and motivated for a long, long time.

Speaker 1

16:23

Startup outcomes are pretty bimodal, so don't jeopardize your co-founder relationship over a few percents. All right, so we've talked about how to get set up with a founding team. It is time to get to work. Now we're gonna share some stories and best practices on how to work with your co-founders.

Speaker 1

16:37

When it comes to teamwork, 1 thing we often hear is that communication is extremely important. Divya, do you have any advice for our founders on how to keep clear and open lines of communication?

Speaker 2

16:46

Yeah, this is a great question. So communication is so important, and it's as important as it is in any close relationship in your life. So we talked about this earlier, but a co-founder relationship is, it's not a stretch to think of it as a marriage.

Speaker 1

16:58

Yeah, and I imagine that setting up these communication channels starts very early in the relationship. Like almost before you start working together, you need to align on certain expectations, right? I've seen co-founders enter into relationships with very different pictures of what it looks like to work together.

Speaker 1

17:15

From anything from, you know, how many hours you work to how much salary you're gonna draw to how many meetings a week you plan to have.

Speaker 2

17:21

You're so right, Kat. Talking about expectations is 1 of the first ways to really test out your communication with your co-founder and make sure that you can actually have hard or uncomfortable conversations while still being productive. So at my first startup, we initially had 4 founders, all friends.

Speaker 2

17:37

Still friends? Still friends. Still very good friends. And there were a couple of topics that we should have discussed early on that just became bigger problems later than they needed to be.

Speaker 2

17:49

So first we found out pretty early on, about 6 months in, that 1 of our co-founders, he kind of had a timeline in his mind for how long he would wait for the product to go viral. It was a totally reasonable expectation, but just not something we'd really discussed. So about 6 months into our startup journey, he was getting very frustrated with the lack of traction. And it kind of caught us all by surprise since we hadn't talked about it.

Speaker 2

18:12

And it was something that just kind of built up over time and he left the company pretty abruptly. Another topic that we should have discussed earlier was about finances and how long we could each afford to go with little to no salary. So there was a little bit of a mismatch with the founders on this. Of course, everyone's financial situation is different.

Speaker 2

18:29

This put a little bit of unexpected pressure on the company at some at 1 point. It kind of came out of nowhere. It felt like it came out of nowhere. And we ended up feeling like we needed to raise.

Speaker 2

18:38

We started considering some like lowball acquihire offers. And while we didn't end up taking any of these deals, I think if we'd known sooner, we probably could have made some decisions earlier on to avoid these distractions. And so just these conversations would have been really helpful to have had up front.

Speaker 1

18:53

Gotcha. Yeah, these scenarios seem pretty common.

Speaker 2

18:55

Absolutely.

Speaker 1

18:56

And it'd be really helpful to discuss these things in advance. Do you have a list of topics you recommend that founders discuss with their co-founders before committing?

Speaker 2

19:04

Yeah, so this list is by no means exhaustive, but here are some good ones to start the conversation. So 1 is, how much do you want to work on your startup versus not? We talked about this earlier, but you know, evenings, weekends, vacations, like kind of what are those expectations?

Speaker 2

19:19

What do you guys both have in your minds?

Speaker 1

19:21

They can be pretty different.

Speaker 2

19:22

They can be very different. Sometimes people just assume and don't have the conversation. Just like don't assume, put it out there.

Speaker 2

19:29

What is being available and like what are response times look like? Like If I slack you and you write back to me 6 hours later, am I going to be frustrated or am I going to think you're really responsive? People have different senses of this. How long can each of us go without salary or benefits?

Speaker 2

19:44

Again, this is a very important 1 to talk about. And what do each of you need to see at different milestones to keep working on it and to stay motivated? Does anyone have a, it needs to be working by X date? And if so, like what does working look like?

Speaker 1

19:57

Yeah, this is such great advice. I can definitely see how misalignments on these expectations can start small, but really fester into resentment over time. Absolutely.

Speaker 1

20:07

Aside from aligning on expectations, we hear that building trust is another key element of a co-founder relationship. I've personally seen this at the root of lots of relationship issues, not just for co-founders, but for friendships, family relationships, et cetera. We see co-founder breakups all the time at YC, and a lot of them stem from a lack of trust that grows out of control. Divya, how has trust played a role in your co-founder relationship?

Speaker 2

20:30

Yeah, so trust is a really big 1. 1 of the things I haven't mentioned until now is that for both my startups, 1 of my co-founders was my husband. Still my husband.

Speaker 2

20:39

Still my husband. I knew you were going to ask. And for my second company, he was my only co-founder. It was just the 2 of us.

Speaker 2

20:46

And 1 of the reasons we were able to make decisions so quickly and draw such clear lines of ownership was that we already had so much trust built up from being married but also from having run a company together earlier. You know, of course, not everyone comes in with this much underlying trust, but having that trust made the co-founder relationship very, very functional.

Speaker 1

21:08

I think previously existing relationships with your co-founders could go both ways. Right. Of course.

Speaker 1

21:13

Personal relationships don't always translate into functional co-founder relationships.

Speaker 2

21:17

Yeah, that's 100% true. A previously existing personal relationship could totally go both ways. And let me give you an example of 1 that did not go so well.

Speaker 2

21:28

So last batch, last YC batch, We had a company apply. We thought the founder was great, and we said, why don't you come back with a co-founder? And so he went and he found a friend, someone who he'd been very good friends with for a long time. They hadn't worked together.

Speaker 2

21:42

He convinced him to join the company. So they came back. They started the batch. The CEO had been running the company for about 6 months, and to him it really felt like his company.

Speaker 1

21:50

Oh no. Yeah. So he brought in

Speaker 2

21:52

this friend, and from day 1, he just kind of micromanaged him, and didn't give him enough space to succeed or fail at the projects he was responsible for. And this is an important 1, right? He would kind of jump in before the projects had time to work.

Speaker 2

22:07

Because at a startup, like things take time and everyone needs a little bit of space and they need that trust. And so he would jump in And he would just kind of berate his co-founder when things were starting to go wrong. And when you trust someone, like you give them this room to fail, right? And the psychological safety to make mistakes.

Speaker 2

22:26

In this case, the co-founder relationship ended with the 2. So, you know, we got a Slack message 1 morning and they were like, the 2 of us, we were at a bar midnight last night with a bunch of our friends. The CEO was like berating his co-founder and then the co-founder resigned abruptly the next morning. So it was just not a good situation.

Speaker 1

22:43

That sounds really rough. I would not want to be in a situation like that. We do have a couple of tips to help with building trust.

Speaker 1

22:50

So number 1 is trust people by default. Trust them until they lose your trust, not vice versa. A lot of good founders tell us they do this because when you operate the other way around, like in the example Divya just gave, people end up feeling micromanaged, they feel not trusted, and all this negativity will continue to build up. If you say you're going to do something, do it.

Speaker 1

23:10

If you're not going to get it done, that's fine. Startups run super fast. You will often have more things than you can finish on your plate, but if you're not going to do it, you should communicate early, often, and honestly. Create space for mistakes.

Speaker 1

23:23

You are going to make mistakes all the time, both you and your co-founder. So don't say things like, I told you so. It's important to learn from mistakes together rather than assigning blame when something goes wrong. And lastly, the more time you can spend physically together, the better.

Speaker 1

23:38

This lowers the friction to asking questions, talking about the little things, and that can expedite making progress on both your startup and your relationship. Communicating in person can also help you learn or get a better understanding for the way your co-founder thinks, and that can help you build trust as well.

Speaker 2

23:54

Thanks, Kat. Those are great. And they can kind of build a really good foundation for building a trusting relationship.

Speaker 2

24:02

So in addition to that underlying trust that you're gonna be continually working at, there might need to be some structural roles and responsibilities that are defined to keep decision making really fast. So at my first company, we made the mistake of trying to keep everything equal.

Speaker 1

24:17

And there are many of you.

Speaker 2

24:18

There are 4 of us, yeah. So we talked earlier about how splitting equity equally is a good idea. I totally agree with that.

Speaker 2

24:25

The equity was not the problem. The first kind of yellow flag that came up was that we decided to not have any titles. Like, we all called ourselves co-founder. And so in and of itself, that wasn't really a problem.

Speaker 2

24:37

But there's kind of 2 issues with this. 1 is, as a corollary to that, we tried to make all of our decisions by consensus.

Speaker 1

24:43

Consensus meaning you all had to agree on the decision to move forward.

Speaker 2

24:47

Yeah, for like any decision. So I don't think I even need to go into it with this group on like why that's a bad idea, but at the time it felt really equal and it felt equitable. But also the fact that we had no titles was a little bit of a yellow flag because it was an early indicator that the team couldn't have hard conversations and we couldn't make decisions when there was disagreement, right?

Speaker 2

25:07

And so it was like the consensus and the lack of titles were like both kind of symptoms of the same thing. You know, having to make decisions by consensus was ultimately disastrous. Like we would just spin, we would get stuck in gridlock. So let's talk about some ways to protect against this so you all don't repeat my mistake.

Speaker 1

25:22

Yeah, so as Divya mentioned, having clear titles or at least naming 1 person the CEO can certainly help. None of this co-CEO stuff. It helps break ties and disagreements, and it's also just really good practice for having hard conversations where 2 people may not agree.

Speaker 1

25:37

Not being able to pick a CEO could be a sign that you're not able to make hard decisions together. In addition to titles, it's important to establish a few other things that can help with decision making. So clear areas of ownership within the company. Who is the final decision maker for different types of decisions?

Speaker 1

25:53

This could be a different person and different functions, but it's important to know who it is. What happens if the other person disagrees slightly versus strongly? Maybe the way you deal with it is different in those cases. And finally, it can be helpful to set up a structure for accountability.

Speaker 1

26:08

So once you've made your decision, at some point you should check back in to see how that decision played out and whether anything needs to change in the process moving forward.

Speaker 2

26:16

Clear areas of ownership are very, very important in a startup, in a business. And in addition, in order to make that work, it's also very important to understand each other's personality and communication styles. And so, you know, here's some tips on that.

Speaker 2

26:29

So 1 is keep an eye on each other's mental health, right? Like likely in either of you is a mental health professional or anything like that, but you can kind of see some early indicators. Is your co-founder burning out? Are they taking care of themselves?

Speaker 2

26:40

Are they starting to kind of become more reactive or more emotional? Like these are some things to look out for and catch early. Related, know how each of you reacts when you're under stress or when you're having a tough conversation. Kat, let me ask you a question.

Speaker 2

26:55

When you're in a stressful, tough conversation, do you tend to attack or retreat? I get very aggressive

Speaker 1

27:02

when I feel upset, so I would say attack.

Speaker 2

27:04

Yeah, same. I'm in the same boat. And this is something that I assumed was the case for everyone, but it's not, right?

Speaker 2

27:12

Like, people have very different personality types. I've been in a few close professional relationships or co-founder relationships. If I'm very frustrated, like you, I get very spun up. Like I get very communicative, I crave engagement.

Speaker 2

27:24

You wanna solve the problem right now. Exactly, like I wanna get

Speaker 1

27:27

into it.

Speaker 2

27:27

Like right

Speaker 1

27:27

now, right now.

Speaker 2

27:28

Right, it might not always be a good idea, right? Like we might be emotional, but I'm still like, I want to get through this. And I've worked with people that in those situations, like, they just kind of want to withdraw a little bit.

Speaker 2

27:38

Like, they want to cool down. Maybe they don't want to engage with me because I'm being crazy. Right? But like, people sometimes just want, like, a little bit of time to calm down.

Speaker 2

27:47

And I think sometimes when there's a mismatch in these styles, it can create a little bit of a vicious cycle, it can self-perpetuate.

Speaker 1

27:54

The more you want to talk to them, the more they are not trying to talk to you right now.

Speaker 2

27:57

Right, and I might perceive that they don't care about the problem. So it's just important to know how people react in stress. A few other things.

Speaker 2

28:04

So does your co-founder tend to speak up when they see a small problem, or do they bottle it up until there's a huge frustration? It's important to know how big of a deal things are when someone brings things up. What environments are most comfortable for your co-founder to voice concerns? Is it like a walk and talk?

Speaker 2

28:19

Is it maybe over a meal? Is it in a scheduled, structured one-on-one where there's time set aside for concerns? Here's 1 that might be a little bit counterintuitive, but are you both comfortable praising each other and celebrating each other's wins? This can actually be very uncomfortable for people sometimes.

Speaker 2

28:34

Can you give each other positive feedback and can you graciously accept positive feedback? Like this can really build a strong co-founder relationship. And lastly, will you feel attacked if your co-founder makes a suggestion about your work? Because as we talked about, everyone's gonna make a lot of mistakes, right?

Speaker 2

28:48

And everyone needs to be able to talk about these in a way that isn't emotionally loaded. So figure out what that looks like for you. And can you do it without taking it personally?

Speaker 1

28:57

I definitely have an aggressive personality type when I'm stressed. So this is all really, really helpful stuff to think about. Let's wrap up by talking about a few habits and structures you can put in place to try to build and foster a productive co-founder relationship.

Speaker 1

29:10

Number 1, have regularly scheduled one-on-ones. Even if you talk to each other all the time, It can also be helpful to keep a list of ongoing topics that you add to as you think of things. And if there's something non-urgent, just add it to the list instead of interrupting your co-founder every time there is something small. In those 101s, definitely reserve time for bidirectional feedback, both positive and constructive.

Speaker 1

29:31

Make this something that's part of the flow. Make it routine, not something that feels like a big deal that you dread all the time. Actually, I have a great example. The founders from Kiwi Biosciences, which I talked about earlier, do something that I think is pretty cool.

Speaker 1

29:42

When 1 person gives constructive feedback, the other person doesn't interrupt or argue. It's a really neat way to let someone vent without feeling like they have to defend why they feel upset. And I think it also helps with feeling like it's okay to talk about even the smallest things. And that leads me to the next point, which is don't delay hard conversations And don't wait until things are a big problem before you mention them.

Speaker 1

30:03

The thing with problems is that they're easier to solve when they're small. Engage a coach or a counselor for tricky interpersonal situations. Don't feel bad about this. This is really helpful.

Speaker 1

30:13

I highly recommend it. These coaches, it is literally their job to help people through these problems. They've seen it all and they can help you.

Speaker 2

30:20

And again, it doesn't mean you have a big problem because you're engaging a coach, right? Like you can tackle the problem while it's small.

Speaker 1

30:26

And we've talked about this next 1 a couple of times already, but we do think it's really important. Avoid personal statements and normalize failure. We've said this multiple times, failure is going to happen all the time, and you need to create space for that.

Speaker 1

30:39

So don't say things like I told you so. Don't say, hey, you always do this, you always XYZ. These are personal attacks, and you don't really want that in your co-founder relationship. Argue and get comfortable arguing, but you should know who ultimately is the decision maker.

Speaker 1

30:54

Disagree and commit. At some point, your team will have to make a decision, unless you're trying to do the consensus thing.

Speaker 2

31:01

Don't do that.

Speaker 1

31:02

But once you've made a decision, commit and move on. Just remember that at the end of the day, no matter what happens or what details you disagree on, you have the same ultimate goal. You both want the startup to succeed.