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When do Co-Founders Become Security Blankets?

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Do co-founders offer entrepreneurs a false sense of security?

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While there has been endless discussion in the startup community regarding the benefits and drawbacks of forming a company with a co-founder versus going it alone, conventional wisdom suggests that having a co-founder is preferred by entrepreneurs and investors alike. Co-founders provide additional skill sets and perspectives, help mitigate key person risk, and provide founders with true partners who understand the emotional ups and downs involved in running an early stage business.

Paul Graham of Y Combinator lists having a single founder as one of the top 18 mistakes a startup can make. He explains:

What’s wrong with having one founder? To start with, it’s a vote of no confidence. It probably means the founder couldn’t talk any of his friends into starting the company with him. That’s pretty alarming, because his friends are the ones who know him best. But even if the founder’s friends were all wrong and the company is a good bet, he’s still at a disadvantage. Starting a startup is too hard for one person. Even if you could do all the work yourself, you need colleagues to brainstorm with, to talk you out of stupid decisions, and to cheer you up when things go wrong.

While I agree that a co-founder offers numerous benefits, and feel that I personally would fare better in a startup environment with the support in place that a co-founder provides, the question I am left pondering is when does a co-founder become a liability? Beyond considerations of equity splits, personality clashes, and disagreements over strategic direction, is it possible that having a co-founder can provide a false sense of security?

What if having someone to cheer you up when things go wrong leads you to undervalue the consequences of poor decisions? What if a co-founder’s endorsement convinces you of the merit of a bad decision that you would be less reluctant to reconsider on your own? What if you struggle to make something work, not because you truly believe in the idea but because you do not want to let your co-founder down? Is it possible for groupthink to manifest in teams of two?

Though entrepreneurs often surround themselves with teams of advisors, investors, and others who provide fresh perspectives for their concerns, having a co-founder who is equally close to the day to day workings of the startup means that we may value their perspectives more than those of these “outsiders”– especially if they validate our own. Conversely, when we are alone, we must constantly question whether we are doing the right thing, as there can be no diffusion of responsibility at the top or confirmation from others that we are making wise choices.

While having a co-founder can be a truly great thing, co-founders should also be aware of these potential pitfalls and take care to avoid the false sense of security that they may provide to one another.

 

3 thoughts on “When do Co-Founders Become Security Blankets?

  1. Great post that raises the bittersweet relationships of having a cofounder very poignantly. I always believe there’s two sides to every decision you can make in the business, and as we learned in class, a cofounder needs to be a very deliberate and thought out decision. With all the complications that comes with having a cofounder, sometimes there really aren’t any adequate candidates. So opposed to a vote of no confidence, not having a cofounder from another perspective could mean that this founder has the conviction to not default to their relationships for any candidate possible to create that false sense of security even when there are no ideal candidates in sight. For me, being absolutely sure that this person is the right person to make into cofounder is always more important than just satisfying another check off box on the VC’s valuation criteria.

  2. Great post Kaitlyn! I think this is an easy trap to fall into, especially if your cofounder is the first person you can convince to go along with your idea, rather than waiting to find the perfect fit of someone complimentary who can also challenge you. I’ve definitely seen the pitfalls of early team groupthink at start-ups I’ve worked at in the past and it can lead you away from fulfilling customer needs with potentially disastrous effects!

  3. Kaitlyn, I totally agree with your view on the security blankets! It is true that the benefit of having co-founders emphasized well but the disadvantage of doing so often overlooked.

    However, do you think your argument is true under the circumstance where one of the co-founders have majority shares (or clearly takes the largest pie and lead the team)? I feel like that the co-founders can be security blanket more in the situation you are in the same situation, meaning you each own the same shares in the company. Creating the clear distinction between you and your co-founders in the responsibility and role might able to resolve the issue of security blanket.

    Any thought on this?

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