Thursday, 29 December 2022

How to avoid Cofounder conflicts?

One of the most common reasons why startups die is a conflict between the cofounders. Many times, startups are founded by college friends who start on a highly positive note and then realize later that they've teamed up with the wrong person.

I have also burnt my fingers and had a cofounder exit back in August 2018. Here are a few ways to avoid conflicts between cofounders:

1. Divide work areas. Figure out who is good at what, and then let them take responsibility for that portion of the work. They may take opinions from other cofounders but they would be the final decision-maker for that piece of work and everyone else should agree to it. At Cogno, Harshita and I have divided the work clearly. I look at Sales, Project Delivery, Support, and Customer Success. She looks at Product Management, Engineering, and Information Security. HR is handled jointly on a case-to-case basis.

2. Complementary skillset. This point is related to the first point. If you look at Harshita's work, it is detail-oriented, while all of my work is mainly high-level. It is because I am better at looking at the larger picture, while she is better at the details and the micro-level picture. Also, I am generally good at communicating with others and so, naturally, all the customer-facing activities are best done by me. Best to have founders who carry complementary skillsets so that they can take up different roles.

3. Trust each other. Either work with your cofounder with complete trust. Or part ways. Don't create a half-hearted situation where you're working with your cofounder but you don't trust each other. If you hit a situation where you're not able to trust your cofounder for something, talk to each other and clarify it. A lot of problems are solved simply by communicating rather than "giving vibes". That brings me to my next point.

4. Communicate with each other. Set clear expectations of what you can offer on the table, what you cannot offer on the table, and which part you expect your cofounder to bring to the table. Don't make silent assumptions. Making silent assumptions and not communicating and then fighting, is the easiest recipe for disaster.

5. Don't fight. When a problem happens and you end up in a conflict, just remember this one simple statement - it's not you vs your cofounder, it's you two vs the problem. Pick the right fight. Fight with the problem and not with your cofounder.

6. Ensure sufficient skin in the game. Sign founder agreements with at least 4 - 5 year long vesting periods with no less than 3 - 4 years of lock-in. This means that if some cofounder quits before 3 - 4 years, they get nothing. Startups are hard and if you or your cofounder don't agree to commit for a certain period, there is no chance you are going to get successful. Make sure that you and your cofounder understand this well.

I have shared a lot of my learnings about Business and Entrepreneurship on my YouTube Channel. Please check it here:

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