Co-Founder Expectations

The second most cited reason for startup failure, behind not finding product-market fit, is co-founder breakups. Mitigating product risk is a topic of major discussion in the startup community, and there are whole startups dedicated to onboarding non-founder employees. There is comparatively little about “on-boarding” your co-founder as a way to mitigate break-up risk.

Andrew, my Firebase co-founder, and I were high school friends. We built a website together in French class, but never worked together on a major project – certainly nothing approaching the difficulty of founding a company.

On our first day, Andrew wanted to start doing. He wanted to find office space, set up source control, and start writing code. When I suggested we should first outline our expectations for each other, he looked at me like I’d just arrived from another planet.

A few months ago we had dinner to celebrate 10 years of working together after leaving Firebase. I read him the letter that I read aloud on day 1 in 2008, and looking back, we agreed it was the most important conversation we ever had. I’d like to believe that it had a large impact on our outcome, across 4 companies and 10 years (warning: survivorship bias).

If you think it may be useful to you, please feel free to copy & modify parts of it as you embark on your own entrepreneurial journeys.

Andrew,

We are in an interesting position, our friendship has now become a business relationship, with that comes many advantages and disadvantages.

As business partners we are now highly dependent upon one another’s activities and performance. Yet, as friends, we are liable to be less demanding than a traditional business relationship and potentially less critical.

As a result, I feel that it is important to do two things throughout the duration of our time together.

  1. Set Expectations. I think this would be good corporate practice in addition to something done between the two of us. Understanding what is going to be done, when it will be completed, to what standard, and what priority it will be given, is critical. Just as critical is adhering to these standards. I hope this will alleviate the awkward “Why isn’t this done this way conversations.” I don’t want to have those with you and I don’t want you to have them with me. Meeting expectations engenders trust in customers. I don’t want trust to be some meaningless BS filler word on our future website, it has to be backed up by our actions.
  2. Communicate Well. Not only are we starting a company, we’re also living together. If I start doing something that bothers you, I DEMAND you tell me. Immediately. Letting things fester beneath the surface is no good for anyone, especially in the long run. A more specific example: I have a very high energy level, telling me to calm down will not hurt my feelings. You should never be worried to tell me something on these grounds, although I ask all criticism be constructive.

Instead of just asking you to set/meet expectations and communicate well I decided it might be a good idea to walk-the-talk. So, you can expect me to…

  1. Respond to email communication within 24 hours, unless otherwise notified.
  2. Meet all deadlines that are agreed to.
  3. Write code but understand that anything that takes you an hour will take me a day. In the future, this may not be the best way to leverage our talents.
  4. Give 110%, every day.
  5. Be silly, obscene, ridiculous around you. In interactions with suppliers, partners, and customers you can expect me to bring the same enthusiasm with the utmost professionalism.
  6. Not know the answers to everything, but find the answers quickly.
  7. Make decisions wisely based on sound reasoning that can be cited when requested.
  8. Give you my honest opinion on every decision.
  9. Not be easily offended.
  10. Give criticism constructively.
  11. Communicate precisely.
  12. Tell you what is going on, good or bad, as soon as possible.
  13. Expect all of these things from you.
  14. Be intelligent, but understand I am not Stephen Hawking. However, I have more drive, ambition, determination, and positive attitude than 99.99% of the population.

In addition to expectations, you should be aware that:

First, I don’t do confrontation well with friends (i.e. you). People I don’t know, it’s a different story. This makes communication between us even more important. Correct me if I’m wrong, but at times you’ve mentioned you can be stubborn. These two traits have potential for trouble. Being aware of them will hopefully alleviate potential issues.

Second, I understand you have already put 6 months of time and money into the company, I am happy with our respective equity states. I’ve now foregone a well-paying job (twice), and have moved to Santa Barbara, I hope this demonstrates commitment to the project.

I am so excited for the future and am willing to spend the next few years of my life on this creating something amazing with you. That being said, I would like to be treated as a partners. You have more equity, which entitles you to the final say in whatever decision making framework we devise. But please understand that “working with” and “working for” are distinctly different.

Lastly, this has to work. No matter how we have to adapt or change directions, it has to work. I don’t want to have wasted my time, neither do you. Moreover, if I have to go back to working 60 hours a week to make someone else wealthy – I might shoot myself.

So let’s keep on rolling, because quite honestly, of the thousands of people I’ve met and know, I wouldn’t rather be doing this with anyone other than you.

James

Thanks to Andrew Lee, Vikrum Nijjar, and Max Henderson for reading drafts of this post.