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7 Key Questions: Learnings from My Founder Story
How to vet a potential co-founder
It takes 7 years to grow permanent teeth after losing the baby teeth. It took me this much time to be able to talk about my painful founder experience. Recently, I was hosting an Ask Me Anything session with students who dropped out of college to pursue startup ideas. One of them asked ‘were you a founder before?’ For the first time, I was able to share that yes, I was. My founder story ended with a co-founder breakup and loss of trust in my co-founder, courtesy of whom I was invited to meet the SEC and other 3 letter acronyms that I didn’t know existed, let alone what they stand for, all in my first week in the US.
I was a fresh out of college immigrant from eastern europe, trying to make a future for myself in western europe, by working 3 jobs to put myself through school. I wasn’t one with friends and family I can ask for spare money, I was one who sent money back home for the essentials. I transferred to the San Francisco Bay Area on a L1 visa, working for a large enterprise software company in Germany, after grad school. The German headquarters was located outside the city of Heidelberg and surrounded by fields of white asparagus, a delicacy that Germans love. Not an obvious place you think about when you say I work in software. A year before getting my visa approved, my manager who was based in the Bay Area, approached me with an idea for a startup - a consumer application where families would handle the big parts of their lives, like estate planning, and also run the current family activities from one place; think of it like a family OS. My manager's relative lost their parents, who hadn't planned their estate. This oversight led to a difficult childhood, as there were no arrangements for their care after the parents' unexpected passing.
My manager and co-founder said he’ll bring in the investors with his Bay Area connections and whereas I was supposed to bring in the sweat equity. This looked like the perfect opportunity to my 20 something year old self. I was moved by the family story. I believed in building software to impact people’s lives for the better; after all that’s why I studied Computer Science. I also thought the world about my manager, I deeply appreciated and respected him, he was way younger than the typical person in his role, and he had hustle. At the same time, I was finding myself trapped inside the guts of this huge company, reading blog posts from Christoph Janz, Bill Gurley and Steve Blank and dreaming to come back to the Bay Area, the first place I traveled to in the U.S. when I came to NASA Ames as a high school student for winning the grand prize for the Space Station I designed.
I wasn’t a full time founder, I don’t know what that was like. I was working at the startup idea on my own time, long hours into the night after coming back from my full time job in the middle of the asparagus fields. I was burning the midnight oil watching lectures from YC on how to run a user interview, watching Apple’s video about simplicity as I was thinking about our logo design, sketching mockups, evaluating reddit, facebook, twitter and all the ToDo apps to see how they do comments well and collaboration, learning everything there is to learn from Germany, about Estate Planning in the US, conducting customer validation and defining the startup’s key value of Open Transparency and Trust. I was going deep into how we can make search excellent inside the app as this was to determine the future between mass adoption and death. I will spare you the details, but we got the startup to the MVP phase and raised the first friends and family round, from all of his connections.
It was hard to have two full time jobs, that’s what it felt like. When people were sleeping in Germany, I was calling Estate Planning practices to learn how it’s done, I’m remembering this in particular as it was not a great experience and probably isn’t for any introverted engineer. As time passed, I felt more alone in building the company and I did not feel like I have a co-founder. My co-founder blamed it on the time zone difference and on the family duties that he had, and I didn’t. At the same time when I felt the loneliest in the startup, I got the L1 visa approval to come to the Bay Area and join a different team where he was no longer my manager. Also this visa did not allow me to work for any other company than the one doing the transfer. So for the first time I was to be in the same time zone as my co-founder but not be able to work on the idea full time for years till I was able to get a better visa. It was obvious this was to be the end of the startup journey for me.
This became crystal clear when I arrived in the US and in my first week at work, I was told the SEC, the DOJ, the Postal Office etc, were waiting to interview me about a matter I knew nothing about. It was beyond stressful. I remember one gentleman from the Postal Office saying “Don’t worry, we don’t torture people here like in communist Romania” and laughed. Imagine how much more relaxed that made me feel in this awkward meeting where I felt alone, stared at by the many suits across the table who were asking me questions without telling me what they were looking for. Welcome to the USA!
Long story short, my co-founder was going to be charged with Insider Trading. I had no idea about it and once I read the verdict I could not believe it because I respected this person, I worked with and for him and thought highly of him and saw him as a hard working family man. The revelation of my co-founder's crime hit me like a physical blow, a visceral punch to the gut that left me reeling. A deep sense of grief and anger washed over me. It was more than a betrayal of trust; it felt like a personal violation, an assault on integrity. The bond of trust had been severed for good, and I did not talk with him ever since. I did ask myself many times how I trusted a person who was able to commit a crime, why didn’t I see it, why would he do something like this. It took me seven years to process the emotional betrayal and grief, seven years to just be able to speak about it.
Just because you work with someone does not mean you can start a company with them. This is a set of questions for founders to ask of each other. I wish I would have had this list to ask my co-founder before saying yes to him and to the company:
Check the basics: Committed a crime?
While it may not seem obvious, I learned that sometimes even the most basic things are sometimes not to be taken for granted. Like, have you ever been charged with a crime?..
How do you think you’ll accept feedback or a different opinion?
You want a co-founder who’s accepting feedback fast and not being defensive but always having the same northstar - what’s best for the company. For example, what’s the best way to go out and raise money, the best way to go out and get design partners, and the best way to market whatever the priority is. It always needs to come back to that and if a founder is like hey i think this is actually not helping us go in the north star direction to the other founder, you need to be analytical about it, discuss it openly, make a decision and move on quick.
What and how much are you willing to sacrifice for the company, e.g. move to a different country?
With this question, you are assessing if you are going to be more committed then they are. That is the single biggest thing, its really important that both founders are at the same commitment level.
One a scale of 1 to 10, where do you think our trust level is?
You can’t be a two headed decision making unit forever, at the beginning sure but at a certain point you need to have real delegation of duties and be fine with that.
What skills do you think we have in common and what is complementary?
You want to make sure they can do things you can’t. The best founders I’ve seen are learning machines and they keep learning and evolving really fast.
What is your most important value?
You’re checking for value alignment. Do they have grit, hustle? Do they get things done?
Can you sit next to me in a 8 hour long flight?
At the end of the day, you want to work with people whose company you enjoy.
If you ask each other these 7 questions and you do a bunch of coworking: taking customer, sales, vc calls together, thinking through strategy, actually hacking code, you’ll be investing in your future and lay a strong foundation for the company. There is a lot more one can do to diligence their potential co-founder.
Now as an investor in early stage startups, I get to work with people who made the impossible possible and I have deep respect for them, and I’m in awe of them. They are going further than I ever could. The fact that I can hustle and make a difference for them fuels me and I marvel at what they are building. I have a bias for action and my co-founder breakup is still very raw which is why I encourage all the founders I get to work with to make sure they have time for “founder date night”. I don’t mean date in the literal sense, I mean a time for the founders to be with each other, not necessarily talking about work, just spending quality time together. I’ve experienced a founder breakup first hand and I’ve seen founders I get to serve go through a rough time. No relationship is magically great; it takes intentionality and work.
Here is an answer from a founder friend whose observations resonated with me deeply, and I wish I thought like that before committing my time to the startup and my co-founder:
I've been working with my co-founders for 20 and ten years respectively :-) We've had this company for 5 years.
What did I look for?
1. Skills that complement mine. They can do things I can't do.
2. They get things done. My #1 value.
3. We have fun working together.
I would advise prospective founders when starting to really remember that if things go *poorly* that this is a ten year journey. If things go well, you could be doing it for the rest of your life. You are choosing a life partner. Don't choose someone you don't get along with.
Special thanks to all the founders: Benjie, Tim, JP, Swapnil, Iba, Sam and Jonathan for riffing on the questions. For those who want more than my questions, there is a VC fund which published 50 questions and an accelerator that published a checklist. If you have curiosities, feel free to reach out, DMs open. And if you have additional ways to assess a potential co-founder please share them so all can see and learn.