What Is A Startup, And What Do Founders Need In A Co-Founder?
Plus mistakes to avoid when starting a business or startup
A few years ago, when I started having a burning passion for bringing my ideas to life, I never knew anything about startups or co-founders—N.O.T.H.I.N.G.
All I had was raw passion, zeal, enthusiasm, and a desperate hunger to use my ideas to change people's lives.
It has taken me years of private studies, attending seminars, making mistakes, connecting, and networking to begin understanding what it means to build a startup and how to look for a co-founder [or team members].
Sometimes I wish I had a more experienced entrepreneur to guide and lead me. There weren't any.
Startups were just becoming something in Nigeria. Only a few people understood it, and they were far away.
I had to rely on the internet and "trying things."
There are many mistakes I wouldn't make if I were starting all over again.
And this short essay highlights most of them and gives you a surface idea of the nature of a startup and how to look for a co-founder [or co-founders].
Recently, I placed a small advert on my WhatsApp status asking for co-founders. From that small social experiment, I discovered that few people [around me] didn't understand what a startup is or the roles and responsibilities of a co-founder.
So, I decided to write this little essay to help them and others who want to know better.
What Is A Startup?
According to Investopedia:
"The term startup refers to a company in the first stages of operations. Startups are founded by one or more entrepreneurs who want to develop a product or service for which they believe there is demand. These companies generally start with high costs and limited revenue, which is why they look for capital from a variety of sources such as venture capitalists."
Take cognizance of the words in bold. Very important.
Startups are baby companies trying to break into the vast world of business.
I know you are wondering, what about those big startup names we hear on Forbes or Techcrunch with bogus dollars backing them?
Well, those are still startups, and they can crash at any given time if not managed well.
Startups always begin their journeys with high costs and, most times, limited revenue. Most of the big startups you see are backed by mammoth venture capitalists pushing them to make revenue.
So, the next time you want to join a startup, especially one that's bootstrapping, be ready to put in some serious work, especially as a co-founder or founding member.
Key Takeaways
A startup is a company at its initial stage of business.
Most times, startups are funded by founders [and co-founders/founding members].
To build a strong startup, always consider the legal framework.
Startups are at high risk of failing.
You can learn a whole lot from working at a startup because of the vast learning opportunities and innovative environment.
Most startups do not really have a well-developed business model. They are still experimenting and discovering what works. So, there's a lot of research work, looking for what works and what doesn't.
And there's plenty of innovation going on all at once; they need to build their business model, establish a mission statement, set goals and visions, and most importantly, discover a unique method or style of branding and marketing.
Special Considerations
Location: Most startups begin their journey on a website [though it depends on the nature of the product or service offered], while those that have physical products or hardware will need to secure a physical location.
Legal structure: This is a crucial aspect of building a startup. Do you want it to be a sole proprietorship or a Limited Liability Company? Please seek professional legal advice before you take any steps.
Funding: This is where most of the work is. I see people who have yet to understand that you will spend lots of money trying to bring a product or service to people.
It's not about having an idea and running to open a website and social media pages. It's deeper than that.
How can you get money?
Family and friends [and personal savings], venture capitalists, business loans, crowdfunding, and credit history are some ways startups can get money to build their products and services.
"What turns me off is when someone just tells me they have this idea and they haven't done anything but want me to invest. I always say you have to take a risk on yourself before anybody can take a risk on you."
Olumide Soyombo. Co-founder Bluechip Technologies.
What Are The Pros and Cons?
Pros
More opportunities to learn: There's much to learn since you may find yourself doing many things.
Increased responsibility: Startups can increase your capacity, making you more responsible for yourself and others.
Flexibility: In all aspects, from your working hours to days and work locations.
Workplace benefits: Most startups provide some fantastic benefits. The prayer is that they live longer.
Innovation is encouraged: It's all about surviving. Everyone thinks of how to push the idea forward and improve it.
Flexible hours: There may be flexible hours, but most times, work tends to spill into other areas of your life [oops, that’s a con].
Cons
Risk of failure: The risk of failure is high! So, if you are bringing anyone under the roof of your startup, ensure they understand that they can lose all of their money.
Having to raise capital: This is where the biggest work is. You have an idea living inside you, but the resources to bring it to life become a heavy burden, so you are all over the place looking for cash.
High stress: For the founders and co-founders, they are the ones who suffer from a lot of stress. Some founders have reported working 18 hours a day—little sleep, no time for social activities, and, most times, burnout.
Competitive business environment: Yes, you will have to deal with competition, and if your competition is better equipped than you, then you may have to kiss building goodbye.
Microsoft, Amazon, Google, and Facebook all started as startups.
Why did they survive?
They had the resources, developed solid business models [and plans], established revenue pathways, recruited the right people and talents, and today they are all publicly traded companies.
It may sound easy, but getting there takes a lot of work, discipline, consistency, willingness to learn, and faith.
The next discussion.
Things Founders Need In A Co-founder
Before we forge ahead. Let's establish who a co-founder is.
"Indeed" has a succinct definition/description that I like.
Here is it:
"A co-founder is a member of the executive team who played a role in the founding of a company. This person typically works with other founders to create and launch a business. A co-founder usually shares certain responsibilities with the other co-founders. Sometimes, there is just one founder and co-founder, in which case the executive team decides which of them gets the title of founder and co-founder. A co-founder may be a highly skilled individual who takes an active part in the business after it's founded or someone who helps lead the business and generates ideas for the company's future."
Business is about ideas and how we nurture those ideas to become productive.
The survival of an idea depends on many factors, and the kind of people that handle it may be the most important.
I know what it means to work on ideas with people with enthusiasm like yours.
You are excited and happy to work, build and spend on it.
But working with people who don't have your level or degree of enthusiasm and depth of understanding feels like hard labour.
Their dullness and lack of zest suck the life out of you and keep you in one spot.
The Characteristics Of A Good Co-founder
Your co-founder is a business partner. You both should invest in the startup or idea.
Co-founders who don't put in one or more of these—skill, finance, time, connections—are not worthy of being called co-founders.
A co-founder is part of the pillar and foundation of a startup or business.
They must carry the burden, pain, and losses and also enjoy the benefits when they start flooding in.
A co-founder should be like a partner; you could almost compare them to a marriage partner. Yes, that's how serious it should be.
Trust
"So people who say that "it’s business, it's not personal", fail to realize that businesses thrive on relationships, and the best relationships are personal."
Olumide Soyombo.
The best relationships are personal.
If you want your business to live long, build it with someone you trust and can rely on at any time, at any day.
Money Habits
You want to avoid dancing with someone who has poor money habits. And the only way you can know is by constantly interacting with them. Establish a relationship with them.
I am a very "picky" person. Before I work with anyone, I make sure I do deep and thorough research. It's important that I know a lot about you, especially when it comes to doing business or building ideas.
They are people who love to borrow money, even if they don't need it. It's just a bad habit. Steer clear of them.
Don't do business with greedy people or those who will do anything to get money.
Know Your Roles and Responsibilities
When starting a company or startup with someone or a small team, ensure each person understands their roles and responsibilities.
Let the technical man stay in his lane, and the business/salesperson mind their business.
This is why you must know yourselves.
I may not be a core technical person. Though I know a thing or two about the technical aspects of a business, I am more interested in communications, idea generation, design, leadership, sales, and strategy. So, I already know who I want if I ever look for co-founders.
Your co-founder must know his/her roles and responsibilities.
A co-founder who brings a financial investment is terrific—and might be the one thing you need to get a startup off the ground. But, even more important -- and hard to find—is a co-founder who recognizes your drive, mission and passion, and shares it."
Sujan Patel
Over Valuing Input
Learn to understand this aspect of business and strike a healthy balance. Never you feel like you are the one doing the most. This is one character you must look out for in a good co-founder [and one you must also build].
Here are other traits you must look out for:
Complimentary strengths: Your relationship with your co-founder(s) is like a puzzle. They should fill up the voids on your map. Cover your weaknesses and insufficiencies.
A thirst for knowledge: An ever-present readiness to learn. Run far away from people who always think they have it all figured out. These folks don’t want to learn anything new. That’s dangerous for a startup.
Shared passion: Building a business with someone who has the same passion and beliefs as you is wonderful. There’s no need to go on a journey with someone who doesn’t understand your drive, mission, or vision. It’s going to be a waste of precious time.
Adaptability: You need someone who is able to flow and conform like water. They are not proud and haughty and are ready to do even the smallest of tasks to keep the train moving.
You also want to find a co-founder who isn't above handling the small tasks that need to be dealt with. This person should have the drive to push the company forward, but the humility to know that sometimes there'll be a need to answer phones and empty garbage cans—and to smile while doing those tasks. - Sujan Patel.
Emotional stability: It’s going to be a rollercoaster. Many things will not go as planned. You need someone who is emotionally strong enough to withstand the shock of loss or failure, if it comes.
Integrity and honesty: Skills are good, but character is better. Integrity and honesty levels must be at 100% at all times. Great companies and businesses are built on pure integrity and complete honesty.
Serious energy: Honestly, starting a business is hard work. It’s not for weak people. There will be times when your energy levels are low. In times like these, you need someone who can stand by your side and hold your hands. There will be times when clients won’t show up, and revenue will be low. This is when you need someone who will look beyond revenue and just keep working—that’s energy!
It takes time to find the right person, so be patient and take it really slow.
Don't be in a hurry to share your ideas with people and quickly bring them into your life.
Study people, and be satisfied before you let them in.
The basic principle is that you look for someone who deeply understands the job and is ready to contribute as much as you in every aspect, from time and financing to skill and expertise.
"More than likely, your co-founder will be a person with whom you've had shared experiences,"
Neil Patel
Don't Make These Mistakes
Avoid using volunteers if you are building a serious business: If you want to start an N.G.O., that's different. Volunteers don't bring the vibe to the party. But a startup needs experts who can get the job done. If you can't hire experts, then you may need to wear many hats. When I started, I wore many hats [I still do, and I’ll keep wearing them until I have enough money to pay everyone—besides, I love those hats]. And it helps you. It expands your capacity as a leader. But the problem is that not everyone can wear many hats.
If you must give out small projects concerning your business, look for competent freelancers: Working with incompetent freelancers will hurt your business.
Work on your business plan and model early on: Don't wait until you are years into building before you start writing your business plan or model. I am talking from experience, guys. Sit down and sweat it out. Write your business plan and design a business model. It will evolve, but start somewhere.
Prepare your pitch deck early enough: This simple move will save you a lot of time and make it easier to clinch funding or mentorship opportunities when they come knocking. And they come unannounced.
Yes, friend. Don't rush to build a website just yet: Websites are like physical office locations or addresses. Don't rush into it if you don't have the required resources and expertise to develop and maintain a good website. It takes a lot of resources and time to build a good website. Instead of starting with a website, buy the domain name [on Namecheap—more on that in the next point] and build social media pages, including LinkedIn. You can also create a small landing page for your services or products. I use Carrd. Easy to use.
Buy your domain name early: Most starting entrepreneurs don't know this. A domain name is like your address on the internet. Buy as many domain names as possible when they are cheap. Some domain names go for as little as $1 to $26 per year. Some can be as high as $5,000 or more. Recently, I was enquiring about a domain name for someone and was surprised to find out that the top versions of those domains were bought just last year! Buy domains early. I recommend Namecheap. Don't know much about others.
Work with a few people: You are not holding a party. It's business, so why bring in a crowd? This year, I learnt about the need to use lean teams. Lean teams are healthier and more efficient.
Build a solid digital strategy: Don't start without understanding the right digital strategy for your business or startup. Build marketing strategies that your resources and expertise can sustain. You can't run ads like Facebook or Amazon. Start small.
And finally, work on your branding: This is where many starting entrepreneurs and business owners miss it. They don't know anything about branding. Branding is more important than your idea, product, or service. It's what people will first see and interact with before they use your services or products. It's your company's colour, personality, design, communications, and culture. These things may look insignificant, but research has repeatedly proven that they go a long way in influencing how people interact with businesses and companies online and offline.
Before you jump into business with someone else, make sure the person you're working with is committed to the same core values. It's costly to give up a percentage of your company to someone who quickly loses interest.
Sujan Patel
That's all for now.
If I have anything more to share, I'll let you know.
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I write about leadership, entrepreneurship, tech, and culture.
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P.S.: I help healthcare and health tech brands build digital communities and design digital products ["phew, I can't believe I am unashamedly promoting myself right now"]. So, this is what we do. We help you with branding, marketing, web and software development, communications, and design. Cool, right? We work with experts and aim to make you extremely happy by exceeding expectations. If you want to know more, visit our small landing page here [we are still working on a big website; you know, startup culture🙂].
But before I finally let you go.
Why did we start that agency?
A one-paragraph story.
I discovered that healthcare and health tech brands need help with branding, marketing, and building digital communities, so I decided to bring my experience as a writer, entrepreneur, and digital builder to work. I reached out to a couple of friends and experts, and we started building something niche-specific. The end.
If you want to discuss brands or businesses outside healthcare, contact me here: danielayinla0@gmail.com.
Bye. Catch you later.