By Sourabh Deorah, CEO & Co-Founder, Advantage Club
Harvard Business School professor Noam Wasserman in his book The Founder’s Dilemma, states that 65% of high-potential firms fail due to conflicts among founders. According to Wasserman, there can be as many different and distinct causes of conflict as there are co-founders. However, the underlying culprit is when someone is attempting to combine two or more sets of ideals, values, perspectives, motivations, and other intangible, immeasurable qualities into one.
On the other hand, history is filled with iconic founding teams and pairs that paved the way for the modern world. One of the most successful businesses in the world, Procter & Gamble, was founded by a modest English candle maker and a struggling Irish soap maker – William Procter and James Gamble. Dave Packard and Bill Hewlett first connected in school. Hewlett and Packard contemplated starting a business when they were Stanford students, and the pair finally established Hewlett-Packard Corporation in 1939. The two men who founded Microsoft, Bill Gates, and Paul Allen, got to know one another at Seattle’s Lakeside School and stayed close over their mutual interest in technology. Let’s not miss the dynamic duo of Steve Jobs and Steve Wozniak. They became friends at a summer job in 1970, and six years later, they founded Apple.Inc.
Many globally respected brands were once conceptualized by such partnerships – a founding team that persisted long enough to achieve success. Unsurprisingly, many were lifelong friends, former classmates, or family members. Others initially did not get along and are still not amicable despite the proven success. But there is a recurring pattern: the most balanced partners were aware of their unique limitations and accepted each other’s contributions to the partnership.
So what are the key foundations that provide a solid business partnership?
Trust: Trust is possibly one of the strongest factors that build up a solid long-term business partnership. The founders take chances when they are confident in one another’s support. They step in to fill voids believing that things will improve. Clarity, empathy, character, competence, commitment, connection, contribution, and consistency are some qualities that aid in building trust. If any of these begin to deteriorate, the relationship may begin to unravel rapidly.
Ability to hustle: For startup founders, hustle is a constant and never-ending endeavor. The hustle to launch a brand-new company with an innovative idea that has never been tried before, to secure funding, to forge a market niche, to overcome the obstacle of acceptance in the market and amongst the target audience, and the hustle to keep going even as the brand succeeds. If either of the partners misses this constant, the venture undertaken is not likely to succeed.
Balance of optimism and pessimism: It is true that optimism makes entrepreneurs believe that business problems will be resolved, thus encouraging entrepreneurs to find solutions to problems. However, it is sometimes detrimental to business. Entrepreneurs sometimes overestimate their chances of success because they are overconfident and unreasonably hopeful. Hence it becomes important that founding members equate each other in terms of aspirational ambitions. Sharing a passionate vision with a realistic approach is what leads to long-term success.
Mutual skillsets: Many successful partnerships shared their love for interest and generally had mutually exclusive skillsets, whether it was Steve Jobs and Steve Wozniak or Larry Page and Sergey Brin or Kaushik Mukherjee and Vineeta Singh of Sugar Cosmetics.
What makes the Founding Teamwork?
The founding team should ideally have skill sets related to tech, marketing, finance, design, and operations in both B2B and B2C setups. For instance, Steve Jobs managed the marketing, operations, and technology, whereas Steve Wozniak spearheaded the design and engineering. In this case, both the founders had their skill sets and took accountability for their related job roles with trust at the back. Similarly, with Advantage Club, a global employee engagement platform, the co-founders focused on their strengths. One led the marketing and sales, while the other took care of technology and product.
In the beginning, with just the founding team, the vision, mission and goals are very clear. As the startup expands, with more people on board and roles clearly defined, founding members need to take up the role of communicator, consistently reinforcing values, culture, successes, and goals. This is essential in a business expanding quickly since new hires could bring bits of their culture to the table while being uninformed about the mission and goals. As the company continues to evolve, founders must also learn and unlearn.
The common thread that runs through successful partnerships is their shared vision, customer obsession, and ability to combine their expertise, domain knowledge, business acumen, etc. Traits like ambition, perseverance, intellect, adaptability, domain knowledge, technical knowledge, accountability, alignment, and integration create a solid foundation for successful founding teams.
The most crucial component of a successful startup is, by far, the founding team. In the hands of a dysfunctional team, even the most potent idea will fall flat. On the other hand, a strong team can develop the ideal business model even from a flawed idea.