What stops a startup turning into a scaleup and what can you do about it?
Since my own fights with fellow business partners back in the noughties, I’ve wondered how I could have done things better. Yes, we knew we had problems and we even sought outside help — but it just didn’t change things!
Now that I find myself coaching startup entrepreneurs, the same issue — of co-founder disputes — keeps coming up as a key issue that holds everyone back. As in, it’s a key issue because it saps the growth of the startup, holds back the ability to scale, whilst also exhausting each founder.
Co-founder fights are a massive distraction — as you’d expect — that risk the success of the venture. But oddly, I’ve also come to view them as a fantastic opportunity too. Here’s why:
What’s so great about Co-founder fights?
A battle or on-going dispute between co-founders is a sign that something is wrong — a bit like when your body just says — give me sleep, and lots of it! Or when you find that you’re the first to catch a cold which turns into flu and you’re the last to get rid of it.
If you kept catching viruses, we’d agree that your immune system is shot and suggest you tackle that underlying vulnerability, rather than seek better cold-management medication.
Similarly, co-founder fights are often a symptom of something that is not well with the organisation. And that’s why it is rare for a startup to succeed unless it is able to resolve those disputes without understanding the underlying issues.
If the disagreement is resolved well, then startups convert into scaleups, scaleups achieve Unicorn status and so on and so forth.
If left unresolved, then the co-founder dispute will slowly multiply and bring down the whole company. Yep, it’s that big a deal!
That’s why, in my role as coach, I treat these disputes both very seriously but also as an opportunity to investigate the real underlying issues, resolve them and set the company back onto a path of rapid growth.
So here are my tips to overcome co-founder fights and to get growing again:
1. Don’t have co-founders
Okay, the obvious question — but why have co-founders in the first place?
Well, part of the answer is that the data shows that solo founder companies fail more often. Also, co-founders are the people that you will be working with closely— going to war with — so, it’s nice to not do that alone. In fact, it makes all the difference in the early days.
If you are a second time or serial entrepreneur, then going it alone may be possible. However, serial entrepreneurs still surround themselves with a co-founder-like team; they just don’t feel the need to share equity on a 50/50 basis.
However, if you are running your first startup, then quickly ditching your co-founders is unlikely to resolve the underlying issues. If after everything you need to part company with a co-founder, then, it will be easier to do so if you have following these steps beforehand;
2. Take the lead
One of the founders needs to take a lead and just decide to just get this dispute resolved.
I’ve never seen a team decide — collectively — to resolve something deep seated and then succeed in resolving it.
It has to start with one individual — someone has to set forward and take a lead. Even if you don’t have the job title CEO — who cares, step forward. And, if you’re still reading, that job is now yours… :)
3. Have crucial conversations early
What’s a crucial conversation? Well, you generally know it when you start one!
It’s a conversation where everyone suddenly gets honest and the whole project, or at least your relationships, hang in the balance.
Sometimes they go well, but mostly they end badly.
So, here’s trick — make sure that everyone is allowed to state the facts ***as they see them***. That’s the key bit, a deep seated disagreement will involve dealing with the issue that you both (or all of you if there are more) see different ‘facts’.
When you respond negatively to your co-founder(s) view of ‘what is true’ then the conversation usually descends into an argument with ‘you gotta be kidding…’
Okay, so instead, give everyone permission to say how they see the facts. Then state how you see the facts too. This is important. You won’t succeed if you don’t then layout how you see things — but keep to the facts as you see them and keep emotion to one side.
4. Accept the inequality — avoid comparison
It is human nature to believe that you do more work that your co-founder(s). Yes it is. We all believe it. We just have to accept that its built into our human nature.
That means that if we compare ourselves too closely with our co-founders, then we are always going to feel that we are delivering more, even if we are not.
The solution is this — if your co-founder is hitting their objectives, great; if not, then have a conversation about what is going on. Be prepared to accept that the business isn’t doing what you want it to do and look at that instead of your co-founder and allow your partners to take a good look at you too.
5. Measure energy not hours
Founders, like leaders, invest their energy and commitment alongside their time. But if you had to choose, energy beats time, always. That’s because there is a fundamental effort to create change and that effort requires energy. Of course, you have to do the work too — but it isn’t just about time.
However, as human beings, we are designed to measure time — as in “I did xyz days and you took a holiday”.
Instead, switch the conversation to one of energy and ask, who is bringing the most energy to the room, the team, the business?
And, do you or your co-founder need a break or holiday or recapture that energy? Sometimes, you just have to cut yourselves some slack.
6. Switch the focus from hours to personal growth
Why is it some of us can achieve huge amounts but others very little? After all, we all have 24 hours. So what’s the difference?
So, if your startup is suffering under ridiculous stress and you feel yourself burning out because your co-founders aren’t pulling their weight…. then, tough though it sounds, take a good long hard look at yourself.
As John Maxwell says ‘good management of bad experiences leads to explosive personal growth’.
Hmmm, I hear you say — but stay with it…
What Maxwell is really saying is that tough times — if we handle them well — are often the propellant of personal growth. So, don’t blame your partners and founders, see it as an opportunity.
Equally, don’t let one partner run you around. If you sense that he or she isn’t doing what they said they’d do and too much work is falling onto your plate, then go back to step 3 and have that crucial conversation.
Either way, you have to get to place of saying ‘I’m okay’ and you don’t do that by getting your head down and driving on with work.
You get to ‘I’m okay’ when you lift your head up and you take on board your personal learning and you open up a safe way of taking on those crucial conversations and allowing them to lead where they must…
7. Seek help
Seeking help is the obvious bit of advice — more importantly, get the ‘right kind of help’.
Okay, but what does that look like? I can’t tell you! But I can tell you what the wrong type of help is — and then you can figure it out from there.
Here’s my list of things that don’t (very often) work
a. Don’t seek a Non-Executive Director. Her role is to work with the company and through that, work with the individual leaders. Typically NEDs are on boards to ensure shareholder interests are represented or because they have a particular skill — say, expertise in your field or an accounting background.
Good NEDs will also be good coaches — but, here’s the point, they are required to be impartial between two co-founders. That means they find it very hard to be honest and direct and the last thing you want is a marriage-guidance councillor at your board meetings in which the hard truths are spoken out in a group meeting as this will almost certainly end in increased resentment and subsequent entrenchment.
I know — I’ve seen that before and it doesn’t work!
Instead, seek a coach to help guide you individually on how you can resolve the dispute. This one to one relationship allows a top coach to speak honestly and frankly with you in a way that doesn’t embarrass or humiliate but allows that you to take on board hard truths and then seek out the other co-founders to find a resolution that works for all.
b. Don’t choose a coach who has a different political or life-value perspective to you. You have to like each other, trust each other and be willing to confide. If your values are too far apart, you won’t be able to do this.
c. Don’t choose a coach who hasn’t been through the startup / scaleup mill, so to speak. You need someone who can immediately empathise with what you are going through and who can tell you that there are good times on the other side of that dispute resolution because they’ve been there and they’ve got the T shirt or preferable, a whole wardrobe of T shirts.
d. Lastly, avoid boring and find someone who is fun. You have to laugh sometimes, even if you cry at the same time.
It’s about the joy
Finally, you know you’ve got it nailed when the joy of creating and growing your venture returns.