Monday, December 29, 2014

Founders Should Divide and Conquer

A common mistake of first time founders is to try to do many tasks together as a small team that could be done just as quickly by having only one person take the lead.  Given how small founding teams often are it is typically wise to split up and delegate tasks to keep things moving quickly.  Otherwise building/selling a product may stall out as all founders are involved in all aspects of the company.

Examples where the entire team is usually not needed:
Basic decisions.  What sort of trash can should you buy?  Or refrigerator?  Although it is fun (and can be a great bonding event) to set up your office, do you really need to have your company come to a halt each time you add a new decoration?  Assign a lead for a task and then have other people weigh in to make the decision if needed.

Your Seed Round.
Fundraises can be really exciting.  You get to meet well known tech entrepreneurs and investors.  You get to sit in the Sequoia offices and watch the slide projector display picture of Larry & Sergey and other Silicon Valley Legends they backed.

You also get to watch 2-3 months of your entire startups time evaporate.

For your seed fundraise, either your CEO, or your most articulate founder should drive it and be the primary person meeting investors.  While smaller angels may write checks funding your company after a single meeting, larger investors may want to meet multiple time and ask for all sorts of follow ups.  This can be incredibly time intensive and having a single founder drive the process will keep your team from freezing up for many months.

The CEO can meet with the investors the first 1-2 times.  If the investor insists, you can have them meet the rest of the founding team as a one off.  Or, choose one other founder for the investor to meet, and rotate founders so that you do not use too much of the rest of the team's time.

Partnership/customer conversation.
A big partner says they may want to work with you.  It suddenly become an all hands on deck situation where you pull together the whole team to slog over to meet with a lowly middle manager.  This is often not the best use of team time.  Wait until an important meeting with multiple decision makers at the partner or customer before pulling in more then one person.

This also helps create an escalation path for a deal conversation.  E.g. if the full founding team is not present you can "take the deal back to the founders" to make a decision.  This stall time prevents on the spot decision making.

What about the other founders?
First time non-CEO co-founders (especially if they did not get the CEO gig, and they wanted it) may have a very strong Fear Of Missing Out (FOMO) or concerns about their own exposure and career.  The question in their mind may be "What about me?  What about my future career?" or "I want to meet important VCs.  I want to be recognized as a key person on the team".

As the non-CEO founder, you will need to learn to manage your own needs and ego to make the company successful.  Many early stage companies blow up due to co-founder conflicts.  Many co-founder conflicts are driven by founders battling about external exposure (investors, press, partners etc.).  As a founder, you will need to put the company first.  If your company is hugely successful, it does not matter whether you had an extra coffee with a random second tier VC.  All that will matter is that you were involved with a big success.

As the CEO-founder, you should be empathetic and aware that your co-founders have wants and needs around exposure.  You should have an explicit conversation with co-founders who express these needs about how it may impact the company and the trade offs implied.  If it is really important to the co-founders, you can try to create avenues for them to have some more limited exposure as long as it does not impact the company.

In general, all founders should keep in mind that there should be a separation of roles between founders (unless everyone is heads down coding).  In general, startups have too much work rather then too little.  Dividing and conquering is the only way to keep things moving.

Related Posts
4 Ways Startups Fail
How To Fire A Co-Founder
Recruiting Is A Grind
5 Signs A Candidate Isn't Into Your Startup
6 Traits To Look For In Hiring Execs
How To Choose A Board Member
5 People Who Destroy Your Culture
Should You Hire A COO?
Reference Check Candidates
How To Hire Great Business Development People
How To Choose A Co-Founder
How To Choose A Board Member
When And How To Fire An Employee At An Early Stage Startup