I have been in business for years. Worked in companies large and small. Started high-tech companies. I have mentored and coached hundreds of other start-up companies across the gamut of science, engineering, technology, digital, app, SaaS, the list goes on.
It is fascinating to watch companies starting out. Often there is an idea or an inventor that acts as catalyst. This founder draws in others from around them in order to progress the idea, to make it real and commercialise it. The struggles are daily, sometimes hourly as the highs and lows of making the idea real are fought.
Often much work is done on the idea to develop it, to refine it. Usually there comes a point where additional funds are needed to progress and investment is sought from friends, family, banks, Business Angels, Venture Capitalists, Corporate Venture funds, customers.
Infrastructure and process are placed around the growing idea. Challenges spring up around every corner. Threats appear out of nowhere. It is a tough, but ultimately rewarding life.
In all the chaos and administration required to move forward the most important things to help guarantee success are often forgotten about. That’s right – there is not one thing, but three. Saying one just made for a more interesting title.
Of the three vital start-up ingredients, the one that I want to mention in this post is “team“. “Customers” and “Luck” are the other two, which will appear in later posts.
I am talking about start-ups here that have ambition. If you intend to be a sole trader, or to grow a business over a decade to have a few employees and turnover sufficient to give you a reasonable salary, you can probably achieve this happily by yourself.
However if you want to grow, to scale, to be international in your offering and have company valuations with five, six, seven or eight zeros in the number, you probably cannot do that on your own regardless of how many employees you might recruit.
An individual is merely the sum of their experiences and that is not generally enormously significant. Even decisive people struggle with the number and extent of decisions that need to be made when creating a substantial company. People are pack animals and gain strength, comfort and different perspectives from others.
Having a co-founder is a good start. The strength of two people battling to create this vision far exceeds that achievable from two individuals. If you know colleagues past or current that offer complimentary skills to you, get them on board. If not, get networking to find them. Even if you are the one with the original idea, or have worked on it for years, make them equal in the company otherwise bitterness is likely to ensue eventually.
However there are times when two founders is not a good idea – when you disagree. Rather than having a “system” to determine who wins these stalemates, far better to have a third co-founder. There is strength in three. Three equal co-founders make a very strong foundation for a company.
You can have more, but with diminishing returns, particularly if you are all entrepreneurs vying to be the leader of the company. The more equal voices, the more noise, the longer it takes to make decisions, and the slower your responsiveness.
However do ensure that although in most situations, you treat your start-up co-founders equally, one of you needs to be chosen to be the single leader. This needs to be the best person for the job. This is often not the person who had the original idea, but the person best suited to create the company and generate the customers. It is this person who has final say on matters, but who only plays this trump-card when absolutely necessary.
So as the very first step to laying the foundations of what you hope to be a strong, successful company, don’t refine the idea, don’t raise money. No. Form the team.