Which mechanisms you can employ when creating a startup with others and how can you deal with any arising problems through perspective you learn from a penguin.
Posted by Yael Tamar Greenberg
Let’s start with a joke I heard this week*:
A man was walking down the road with a penguin when a policeman saw them and approached the man.
“Take that penguin to the zoo.”
“Do I have to?”
“Take that penguin to the zoo now!”
“Oh all right then”.
So the man and the penguin head off to the zoo.
The next day the policeman sees the man and the penguin going down the same road again and gets very cross.
“I thought I told you to take that penguin to the zoo.”
“I did. Yesterday we went to the zoo, today we’re going to the cinema.
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Before you hear the ending of the joke, you think, “What a dumb ass; why didn’t he take the penguin to the zoo? And don’t penguins need snow to survive?”
Apparently though, it happens to the best of us. We all walk around with a penguin of sorts. And when someone else tells us to put it where it belongs, we think they mean something entirely different. And that’s when it all starts. The inevitable cofounder argument.
More than 90% of startups fail, due primarily to self-destruction rather than competition. For the less than 10% of startups that do succeed, most encounter several near death experiences along the way**. One of the leading causes of startup self destruction is fights between founders, which are surprisingly common***.
Most of the fights happen because of the people involved and, let’s face it, their egos. Everyone is looking at the situation from their own perspective, and for many of us, it’s difficult to look a situation from any point of view but ours. At times when it seems that we had agreed to take that penguin to the zoo, the next day the penguin strikes again because we all meant something entirely different while talking about the same thing.
Cofounder disputes are inevitable. Don’t think that you are immune because you communicate well at the beginning or you’re best of friends. As stress increases, and trust me, it will increase, your relationship with your cofounders may escalate to become one of the prominent challenges your startup will face. That’s one of the reasons why it’s advisable not to start a business with your best friend. As they say, diversify, because you only have one best friend. Nevertheless, you can minimize the risks and the effects of cofounder arguments, and you can certainly ensure that they will not kill your company.
Here are some tips to minimize the cofounder drama and avert its deadly grip:
1. Chose your cofounders carefully and wisely
Don’t start a company with someone you dislike just because they have a skill you need. Don’t start it with your best friend because you feel they may want to feel left out. Don’t start a company with anyone you have some misgivings about hoping that it will be alright.
2. Don’t split the equity equally
This kills startups because they don’t have a clear leader, and because the cofounders are afraid to enter arguments to start with.
3. Match expectations of each cofounder
Make sure everyone knows what they are expected to be doing, how much work is required of them and how long they are expected to work before they may start getting paid.
4. Prepare the cofounders to face the challenges of being a part of a startup
Startups experience ups and downs all the time. Some of us may enjoy getting a stochastic adrenalin rush while others may get really frustrated. Make sure your cofounders have entrepreneurial outlook and are ready to face challenges.
5. Don’t vest all equity upfront

Make sure to have share vesting based upon time milestones (e.g. 10% after 6 months of involvement and then quarterly vesting of the rest of the shares over the next three years) and have everyone sign a share repurchase agreement allowing the company to repurchase the shares from a founder upon leaf.
6. Make sure the cofounders are aware that you will pivot your idea
Some cofounders become very attached to the original idea and may not like it when, upon feedback from people in the industry such as investors, mentors, users and other entrepreneurs, the idea may change anywhere from “slightly” to 180 degrees.
7. Learn to see the world through your cofounder’s eyes

Finally, when you do experience an argument, in the same way as if you were a married couple (or a ménage-a-troi?), try to see the situation from the other person’s point of view.
A relationship with a cofounder is very similar to a marriage:
@ If you like your cofounders, you stay together till death does you apart (or at least until the exit) and there’s just not an option of divorce (a cofounder leaving).
@ And because you have gone through steps 1-6, there’s no way you have the case of a bad co-founder on your hand.
Doing the dishes is very much a drag, and you fight every night about who will do it. One of you is not pulling enough weight. It’s a given in any human relationship.
Nevertheless, at times of argument, try to view the situation from your cofounders’ perspective, e.g. where they are coming from and why they think the way they do.
Then try to convince them to go your way by giving them proper credit, respect and agreeing to take most of the responsibility for implementing new ideas. Any relationship crisis, at home or at your startup, could be solved with the same simple tactics that start with perspective.
And on that we’ll be talking in a separate blog. Stay tuned!
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* I’d like to thank Halit Lichtenson, a startup coach of Savyon, Israel, and the CEO of Myway.biz, for telling the penguin joke during a group coaching session at the Gvahim Accelerator.
** It’s Not How Big It Is, it’s How Well It Performs
http://steveblank.com/
*** 18 Mistakes that kill startups http://www.paulgraham.com/startupmistakes.html