If there’s one thing I am an expert in, it’s bad co-founders. After all, the first two teams of co-founders I tried to start my company with didn’t work out.
There were “Jim” and “John”, my first two co-founders. We worked together for about five months before they quit, stole the company’s IP, and then started a competing company.
There were “Julius” and “Doogie”, Jim and John’s replacements. They didn’t work out either.
It wasn’t until my third team of co-founders that I hit the jackpot. Even then, two of my four co-founders didn’t make it through one year.
So, you can see I have my bone-fides down when it comes to failed co-founder relationships. I know the warning signs when things aren’t going to work out. Let’s go through them. By the way, I’ve experienced all nine of these:
Warning sign number one: Your co-founder doesn’t agree with your vision for the company.
When I started with my first team, Jim, John, and I seemed to be working well together. I knew Jim from our time at Maxim Integrated Products, and he recommended John, another Maxim alumni, as our VP Engineering.
I checked my network for references on John. Everyone I spoke with felt it was a coup for me to have John as part of the team.
It was clear, within a few short months, that John had different ideas for what we should do than I did. Right or wrong, when this happens, either one of you adjusts or one of your is going to leave the company.
John chose to leave the company, steal our IP down to the slide deck, and start another company.
Warning sign number two: Your co-founder doesn’t understand the tradeoffs of working with investors.
The problems weren’t just that we disagreed on the company’s direction. John also felt we should raise less money.
I wanted us to have at least two years runway, and John felt we should keep more equity and raise less money. Maybe it’s unfair to say John didn’t understand how investing works, but he didn’t understand that you lose control…