Who is the right cofounder for your business?
It is much easier to find what we are looking for if we know what we are looking for.
Sounds obvious, but a surprising number of cofounding teams’ origins can be traced back to on-boarding cofounders based on criteria like 'whoever was around at the time and available'. In this category you will find anything from 'in between jobs cousins', supportive girlfriends / boyfriends, best mates etc. Not surprisingly, these cofounding teams are often not ideal for delivering and building the business. Some because they lack the skills and resources, some because the team chemistry is totally wrong and some because some of the members were never really fully committed to the business. While the reasons vary, the fact that cofounding decisions should be done by design, not by default remains.
How to identify the right cofounder for your business?
There are many roads that lead to Rome. And some shortcuts. The gap analysis from Step nr. 2 from Cofounding The Right Way methodology is one of the useful shortcuts. It is based on design. Not default. And it starts from the needs of your business. Not accidental availability. You might need to compromise on some attributes of your ideal cofounder later , depending on the pool of candidates you can choose from, but at least you start with looking for who your business actually needs.
The methodology is based on a gap analysis between your business plan, your available resources, and the gap in between.
# Step 1. Understand which resources your business needs
Make an inventory of resources you need to be able to deliver your business plan (think next milestones and phases). A useful division is to split in categories of skills, experience and assets.
The example we use here is Tim’s early stage idea - to build an easy to use customer app to update their travel insurance on an as needed basis - TravelSafe. He already did initial market validation and now he wants to start with the prototype development. He mapped the resources needed until the proof of concept (next milestone).
# Step 2. Exclude the resources you already DO have
Highlight the resources that you do have or have access to.
Back to Tim’s example, he now critically evaluates which resources he has and highlighted the ones he needs to acquire:
You can also consider to classify the missing resources in ‘must have’ and ‘nice to have’ categories. In Tim’s case the ‘nice to have’ resources are marked with an asterix*.
# Step 3. Review possible ways to get the MISSING resources
Review if you can get these resources in alternative ways. This includes outsourcing or buying (external service providers or employees), get it yourself (learn), strategic partnerships, volunteers, mentors, coaches, advisory board members or communities where you are member.
# Step 4. Gap analysis
The summary of resources you are missing is the basis for a big part of your future cofounder’s specification. Depending on your particular situation – when looking for the cofounders you want to fill the gap as much as possible. Keep in mind that with every additional cofounder the complexity of managing your cofounding team goes exponentially up. So you want to fill the gap with as few cofounders as possible.
# Step 5. Cofounder specification
Summarising you future cofounder 'specification'. You might only use it for yourself or you might actually need to have it ready for the next steps - either way it is very useful to write it down in a clear and concise way. It should include:
summary of your gap analysis: the assets, skills and expertise you want the future cofounder to bring on board
required commitment - be specific! do you require full time commitment or would you be ok in the initial stages with part time availability too. And if so - how much and how does it look like?
last but not least: what values, culture and attitude fits with you and your business. this is another topic but for now at least keep in mind that many experienced investors (including Blackrock Group for example) would look at the value alignment of the cofounding / management team as one of the 3 main predictors for future success.
Knowing what we are looking for is halfway to finding it!
In the next post we will look into where to find the right cofounder.
Stay tuned.
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