Go solo or find a partner: When a startup needs a co-founder

By DeForest Mapp
Medill Reports

Today’s startup inventor often brings revelation to fruition by returning home from a fulltime job to start a second life. The inventor may catch a few hours sleep, push forward on design in pajamas until 4 a.m., get a little more sleep, show up for work and do it all over again.

For an entrepreneur in the tech space, this is living the life, according to an article from the U.S. Bureau of Labor and Statistics’ Career Outlook. But every founder goes through a series of life-changing steps needed to build a successful startup. While some steps revolve around people and establishing culture, the startup is equally hinged upon a good idea that solves a problem.

“Before you build something that nobody gives a shit about, why don’t [you] go back, make sure that we really understand the problem that we’re solving, that you’ve got a customer that cares enough to pay you for it,” said Billy Banks, associate program director of the Garage at Northwestern University. “If you don’t have that, you haven’t nailed the problem, yet.”

Founders who have spent countless hours designing the look, feel and tone of an experience, app or invention cannot believe what they have. That said, the next crucial steps include building a team, finding resources and hopefully scaling the business. According to an article on TechCrunch, there’s at least one way a founder can streamline that process – bring on a co-founder. The new partner may lack  business acumen but could work to pick up the skills or fill a gap as the tech whiz.

Paige Edmiston encourages healthcare startups to apply to MATTER, a non-profit and no-equity collaborative based in Chicago.

“We offer workshops in business [for our founders],” said Paige Edmiston, marketing manager of MATTER. “It’s really hard… there’s so much complexity [in a startup] that very few people know everything they need to know.”

Bringing equity to a startup, without diluting it, should come with a price, according to another TechCrunch  article. Skill sets such as programming, designing and JavaScript all seem easy enough – that is until a non-technical founder actually starts spending time in those environments. They will quickly learn they’re better off hiring someone else.

“The best way to hide your imperfections is to keep it simple,” said Scott Kitun, CEO of Technori. “It is much better to go into a little bit of debt… to hire the right person that does the job exceptionally well and faster and more efficiently than you, as a founder, spending your time doing something you’re not great at.”

Finding this kind of coveted type of talent might be easier if the founder lived somewhere near the Mission District in San Francisco, for example. It might be nice if a Bumble app existed just for technical and non-technical founders, allowing users to swipe left and right until a match is found. But until someone recognizes this as a problem, The Meetup app will do just fine.

“If you’re young, and you want to be in tech, your best bet is probably to go to SF because you can get a bunch of roommates, eat [obscenity] food and you can make it work in San Fran,” said Banks.

While twenty-something software developers in the Bay Area play the field and hold out for as much money as possible, the eager startup founder might consider relocating to Chicago, another hub for successful startups such as Groupon.

” [This] is why [you have] companies like Google and Facebook hiring more people here,” said Banks. “That’s why you have Amazon considering Chicago as a place to put their [headquarters], too.”

But even if the founder brings the startup to Chicago and finds it more affordable, he or she may face a potential dilemma. If the startup does not find a chief technology officer, it will more than likely not receive any rounds of capital from potential investors until this team member and a product is in place.

“You really have to have the business-model figured out of who’s going to pay for [the product],” said Edmiston. “Not only [having] a promising product and business model [is essential], but [we] also have [to have] confidence in the vision of the founder and the early-leadership-team.”

After months of searching and courting the right technical co-founder, the founder offers a candidate a partnership role, all contingent on his or her ability to deliver on a minimum viable product (MVP). And in exchange, the new startup is now defined by the efforts of two co-founders, partners in a new dream company.

The candidate accepts, thanks the founder and immediately begins assisting in building their future. But now the senior co-founder may start to anticipate how angel investors, venture capitalists and private equity firms receive the new team and idea-in-development.

“As you go into these meetings, you’re going to hear no a lot,” said Banks. The word no is “just an opportunity to ask a follow-up question and understand what the no is, so that when you get the next meeting, you’re starting to figure out how to overcome objections.”

The Startup Cycle and the Investment Stages: (DeForest Mapp/MEDILL)
Photo at top: A startup founder seeks a co-founder. (DeForest Mapp/MEDILL)