Naval · November 12th, 2009
Update: Also see our 40-minute interview on this topic.
Picking a co-founder is your most important decision. It’s more important than your product, market, and investors.
The ideal founding team is two people, with a history of working together, of similar age and financial standing, with mutual respect. One is good at building products and the other is good at selling them.
The power of two
Two is the right number — avoid the three-body problem. Think Jobs and Wozniak, Allen and Gates, Ellison and Lane, Hewlett and Packard, Larry and Sergei, Yang and Filo, Omidyar and Skoll, Julia and Kevin Hartz from Eventbrite, Jennifer Hyman and Jennifer Fleiss from Rent the Runway.
One founder companies can work, against the odds (hello, Mark Zuckerberg). So can three founder companies (hello, @biz, @ev, and @jack). In three founder companies, the politics can be tough — gang-up votes, jockeying for board seats, etc. — but it’s manageable. Four is an extremely unstable configuration and five is right out. When 4-5 founder companies work, it’s because two founders dominate.
Two founders works because unanimity is possible, there are no founder politics, interests can easily align, and founder stakes are high post-financing.
Someone you have history with
You wouldn’t marry someone you’d just met. Date first. This is how long Bill Gates and Paul Allen have known each other:
Go through something difficult, like a Prisoner’s Dilemma or a Zero-Sum Game. If being ethical was lucrative, everyone would do it!
One builds, one sells
The best builders can prototype and perhaps even build the entire product, end-to-end. The best sellers can sell to customers, partners, investors, and employees.
The seller doesn’t have to be a “salesman” or “saleswoman”. They can be technical, but they must be able to wield the tools of influence. Bill Gates and Steve Jobs aren’t salesmen, but they are sellers.
Aligned motives required
If one founder wants to build a cool product, another one wants to make money, and yet another wants to be famous, it won’t work.
Pay close attention — true motivations are revealed, not declared.
Criteria: Intelligence, energy, and integrity
It’s not the kid you grew up next to. It’s not the person you like the most. It’s not the hacker most willing to work for free.
It’s someone of incredibly high intelligence, energy, and integrity. You’ll need all three yourself, and a shared history, to evaluate your co-founder.
Don’t settle
If it doesn’t feel right, keep looking. If you’re compromising, keep looking. A company’s DNA is set by the founders, and its culture is an extension of the founders’ personalities.
Pick “nice” people
Avoid overly rational short-term thinkers. There are bounds to rationality. Partner with someone who is irrationally ethical, or a rational believer that nice people finish first. Be especially careful with the “sales” person here.
What you don’t know
Business founders who don’t code use bad proxies for picking technical co-founders (“10 years with Java!”). Technical founders who don’t sell also use bad proxies (“Harvard MBA!”). Learn enough of the other side to have an informed opinion. If you’re not seriously impressed, move on.
FAQs
What if the right person already has his own startup? Convince him to work on yours part-time — they’ll drop his idea once yours gets traction.
Breakups are hard
If you’re going to fall out with your co-founder, do it early, recover the equity into the option pool to keep the company going, and recruit someone else great to fill the missing slot. Build in founder vesting (a.k.a. the “Pre-Nup”) to keep the breakup from getting messy. Building a great company without a partner is like raising kids without a…
Nearly everything I’ve written on this topic applies to dating and marriage. Coincidence?
Go forth and multiply.
Update: Also see our 40-minute interview on this topic.
This post is by Naval Ravikant. If you like it, check out his blog and Twitter.
Topics Founders
Great post. Neil Patel, a very smart entrepreneur, also has an excellent recent post that you may want to check out: “Beginner’s Guide to Finding the Right Business Partner” (see http://bit.ly/1wQkbt). As a corporate lawyer for 15+ years, I just wanted to echo your sound advice that co-founders should impose reasonable vesting restrictions on the equity issued them. Indeed, as I discuss in a relatively recent post (see http://bit.ly/nYZM4), it would be inherently unfair for a co-founder to quit the venture after a few weeks or months, but still be permitted to keep all of his or her equity. Many thanks, Scott
As you point out, there are several advantages to having 2 co-founders, but I think your perception/post exaggerates the odds against single-founder companies
From this week’s news, AdMobs is a great example of a successful single-founder company. See http://news.ycombinator.com/item?id=77525 for more data points.
Agree with Ram’s comments. See Amazon and Wipro, one founder companies but still kept going….
Great post!
Was Facebook really a “one-founder” company? Maybe I’m bad at my Facebook founding history, but it seems like there were multiple. It was one-founder in the sense that Mark Zuckerberg is both a builder and a seller 🙂
I feel like there have to be more good examples of successful one, three, and four-founder companies. It seems like you dismiss anything else than 2 too quickly.
So who’s the unnamed co-founder pair?
Both pics are Gates and Allen.
The photo up top of Bill Gates and Paul Allen looks like it’s from “Bring your son to work day.”
Love this post! I think finding the right co-founder is REALLY tough for a lot of people and this is great advice.
Trying it out for a bit is really important. One thing I’d recommend about the dating period is if you’re looking for a co-founder for an existing concept of an early stage product, present their participation as a “trial” before extending an offer.
When it comes to aligning motives I think one thing that’s important to look at if they are interested more in the rewards or the journey. The journey is more important IMO.
I would also add passion to the criteria. Intelligence, integrity, and energy are good but if it’s not put towards something they are passionate about then I think you lose a bit of the driving power for those qualities.
Wow, you have perfectly describe the problem with my past venture. Got the idea for biz but my partner wanted the quick reward but not the up and down of the journey. I ended the partnership (remain friends). I realize not everyone have the passion and the drive.
I know a lot of people who want to be an entrepreneur but many do not have what I call the “survival gene”. The gene to make one take the step to do what they need to do to survive. Like doing something you never done before or you are afraid of. The same gene that drive you embracing and prepare for the unknown and not hide from it.
Having the wrong partner is worst than not have one at all.
Just watch the movie startup.com base on a real company.
Ellison’s co-founder was Bob Miner. Check you facts……..
How to Pick a Co-Founder (aka Getting Married w/o Getting Divorced) // Nov 12, 2009 at 12:22 pm
[…] from VentureHacks today posted a great outline of how to pick a co-founder. Now – this doesn’t mean there’s an ocean full of great potential co-founders swimming […]
I love the power of 2. Excellent advice, although I don’t see 3-4 being a problem with the “right group”. Certain projects lend themselves to two, others can really get powered up by 3-4 founders. Engineer heavy startups are common now, so doubling or tripling your development team at the outset is incredible. It depends on what other responsibilities team members have as well. Many startups are grown while folks work their day jobs or part time (to survive).
I’d say that you have to figure out what works best for you. You can’t slap a formula on it. Some people are more comfortable, and successful, working with one other person and others prefer a tight-knit team of three. I’ve been successful with both situations, but have most recently found that I’m more comfortable with two other co-founders.
Great advice, have been looking for an article like this for a while. Thanks Naval.
Poignant and timely piece especially the bit about the power of two. Three is an infamously unstable number when it comes to human psychology.
As it happens to be, I am looking for a lead developer. VentureHacks was kind enough to tweet about it here:
http://twitter.com/venturehacks/status/5599787710
Anyone interested, please see:
http://eventsession.com/customer-development-oriented-lead-developer-for-start-up/
The primary problem of finding cofounders isn’t seeding out the bad ones, it’s even knowing someone you might want to found a company with.
According to the post your cofounder should be someone of roughly the same age and financial standing that you have a history with, have aligned motives with, has incredibly intelligence, energy and integrity. Oh, and it has to be someone that respects you and that you respect as well.
Personally I don’t know anyone that lives up to all of these criteria, and I doubt that most people do.
Thank you for writing such a great post! 🙂
This is a fascinating article, but I’m wondering — do women ever found companies? If I were to use only the evidence of this article, I’d assume not.
Off the top of my head women tech founders:
Caterina Fake – Flickr & Hunch
Jessica Livingston – Y-Combinator Co-Founder
Leah Culver – Pownce
Mary Kay Ash. One of the greatest female entrepreneurs in American history.
Oprah Winfrey no need to say more
Joan Ganz Cooney is one of the founders of the Children’s Television Workshop (now known as Sesame Workshop).
Filipina blogger Shai Coggins, co-founder of one of the world’s biggest blog networks, b5media, has been cited by Fast Company as one of The most influential women in technology for the bloggers category.
Often, men help women get to the corner office
When USA TODAY asked female CEOs, chairs and company founders to identify the one mentor who had the most influence on their careers, 33 of the 34 who responded identified a man.
One reason the path to success for some women almost always leads through men may be the sheer matter of numbers: There are only 29 Fortune 1,000 companies with a female CEO and not enough other women in very high-ranking positions to do the mentoring.
The saying – If there is a woman behind every successful man, it may be as true that there is a man behind most every successful woman.
Sorry, husbands. He’s probably not you, but rather a male executive who champions women to the top.
finding a co-founder is something like finding a soul-mate.
when you find him/her, you feel you just cant start something without him/her.
if you ever feel like this that means he/she is your co-founder.
Great post! Just partnered up with a friend for a new venture, and it seems our intuition is somewhat validated from this post….so, we’ve got that going for us, which is nice…
Great article but unfortunately it doesn’t totally address the challenge that most of us face: We *know* what type of person we want as a co-founder but unfortunately we don’t have a sufficiently large number of candidates.
From this post you stress:
-Common work history
-Has all of the (many) intrinsic entrepreneurial qualities
-Has complementary skillsets
-Aligned motives
-Similar age
-Similar financial standing
To that I would add:
-Is available (i.e. not already on another startup)
-Does not have multiple small children (just my personal experience – I would not discourage any parent from pursuing his or her passion)
How many of us over the age of 35 have sufficiently large sample set of colleagues who fit this criteria? Not many. So by this logic are companies only started by recent college grads? Or are more successful companies started by just a single co-founder?
Given the choice of settling for a sub-optimal co-founder situation, continuing to search, going alone, or giving up, what should people do?
Really, this is the question that matters.
Finally, I would actually really be interested in seeing some rigorous social scientific analysis applied to this issue. How many companies are founded by 1, 2, 3, 5, or 8 co-founders? What is their relative success rate?
Entrepreneurship is a topic full of urban myths that need disproving such as the reality of Angel investing in America and most first time entrepreneurs are young.
Is the 2 co-founder myth yet another one?
Terrific post and tremendously useful to the entrepreneur. The challenge with co-founder structures is that there can ultimately be a dispute over ‘who is really driving the bus’.
I would therefore add one thing: before you decide to co-found a company, make sure you are 100% prepared to lose your friendship in order to save your partnership or save your friendship by ending your partnership. This isn’t pessimistic, it’s sheer fact. As your startup evolves, sometimes it’s clear that one of the co-founders is more relevant, more competent, more appropriate to really take the lead. Ideally, it won’t happen, but be sure you go into a co-founder structure eyes wide open.
Can you talk a bit about what makes two better than one?
Other than the statistical correlations that are out there that suggest two founders are more successful (which is debatable), what are the theories behind it?
How to pick a co-founder? at Entrepreneur Geek // Nov 21, 2009 at 1:07 am
[…] Naval Ravikant writes an insightful post on Venture Hacks on picking up a co-founder for your startup. […]
Awesome post Naval, very well articulated.
Though would love you see you delve into the specifics of the two founders. I remember you talking about the alpha geek technical guy – would love to hear more. And then do it again with the business guy – who’s an API that the alpha geek can plug into, if I can quote a wise man 🙂
Asking yourself and the potential co-founder some of the questions found in this article may be helpful to see if your interest and passion are aligned…So, You Want to Be an Entrepreneur – WSJ.com http://bit.ly/zHF4h
Great post. As a previous co-founder of a startup that died mainly from the due to internal (inter-founder) differences and issues, I can say this post is right on the spot 🙂 Having the right co-founder is the most important 1st step of the company. For me I’ve always believe the right/magic number is two…
ceo
Remember that success has many fathers but failure is an orphan.
Bootstrapping Independence · A Short List of Current Reading // Dec 2, 2009 at 2:49 pm
[…] How to pick a co-founder – A good look at picking business partners. I like how he ties everything back to all personal relationships […]
Just got video of Hubspot CEO Brian Halligan addressing the factors in picking co-founders. You can find it here: http://bit.ly/6MtDtb.
How to build your core team for early-stage startup? | Grow VC > Blog // Jan 2, 2010 at 11:44 am
[…] look for co-founder or co-founders. There is a great post and podcast about this subject “How to pick a co-founder” at venturehacks. You may also want to see this post “Unlock Your Team’s Potential to […]
Thanks Naval, great post to go back to and remember how to do it right, when there is no specific right.
Taking time to learn more about your potentiatl co-founder ought to be the most important step in a start-up’s life.
The High-touch Legal Services® Blog • For Startup/Early-stage Companies » How Many Founders should a Company Have? // Mar 2, 2010 at 7:36 pm
[…] Please see How to pick a co-founder, an excellent post in which angel investor Naval Ravikant opines that two is the optimum number of […]
Thank you for this blog post. I very much enjoyed hearing your perspective. It would be great to get follow-on topics such as working with remote team members in the early stages, recruiting methods, what to not to look for, etc.
I am curious about situations where neither of the founders qualifies as the lead developer. In my situation we are both tech savvy and know enough to be dangerous across a wide range of specializations. However, neither one of us has a coding background. Can the programming be outsourced and really get the end-product you’re looking for?
re: J –
“Can the programming be outsourced?”
Of course! The challenge will be getting the right kind of architecture and design which will scale. My 0.02 is that if you target building something “good enough” to go to launch, that will likely carry you until the first major rewrite. You’ll learn so much in the process of getting the first version working that it will make it easier to get it “right” the second time around. Geeks can always be hired. The passion, the ideas and the dream are hard to find, and you’ve apparently already got those. Got hire a geek to get your code done, and after you’ve got the first round of clients, work on insourcing the developers and building a scalable version.
Tom
Yes, You Need a Co-Founder — giffconstable.com // Aug 5, 2010 at 8:50 am
[…] this said, I do generally agree with Venture Hacks the ideal number of co-founders is two or three. And if you’ve been working on something for […]
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[…] How to pick a co-founder? – Naval Ravikant, Venture Hacks (Recommended) Choosing a co-founder is perhaps the single most important decision for an entrepreneur. What qualities to consider in a co-founder? […]
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The co-founders meetup is landing in Austin, TX on Dec 6th | Austin Tech Geeks // Nov 9, 2010 at 8:48 pm
[…] is also a good idea to read this before the meetup, it provides great advice on how to pick up the right co-founder and it also […]
I am not sure that the two co founder rule is so sacrosanct. Perhaps the so called ‘team’ of co founders is a demand that emanates from the venture funds.
Even a single founder based companies can flourish if the founder can put together a team of employees with a good stock option profile.
Of course, there is a problem of fatigue with single founders. If a single founder can muster the necessary energy and resilience, nothing should stop the company from succeeding. Of course the investment model would change as such companies are least preferred by venture funds.
While I had three partners to start with, I had buy the two out to make the company acquire an unified momentum towards its objectives. If the two funder theory has worked for some, it does not automatically mean that it would work in every case.
We can certainly draw inspiration from success stories but cannot make rules based on these.
Founder and Co Founder // Dec 30, 2010 at 12:11 am
[…] these two individuals. Which is why I recently found the title for one of Venture Hacks articles, How to Pick a Co Founder, a little […]
Gyan corner for the wanna-be as well as early stage entrepreneurs/founders/co-founders » Blog Archive » How to pick a co-founder (revisited) // Jan 3, 2011 at 2:09 am
[…] inspiration to write this post came from the post by Naval at http://www.venturehacks.com . I agreed to most of the points made there, but there are certain […]
Nice article Naval. I felt like adding a few more points to the list & composed another blog.
I feel the attitude of the co-founder is very important. Also wrote a few pointers on how to gauge it.
I have also suggested a new formula for the right combination to look out for.
Blog here – http://www.cofoundersgyan.com/how-to-pick-a-co-founder-revisited/
天地一沙鸥 // Jan 9, 2011 at 8:41 am
[…] How to pick a co-founder – Venture Hacks: The ideal founding team is two individuals, with a history of working together, of similar age and financial standing, with mutual respect. One is good at building products and the other is good at selling them 此条目发表在 生活 分类目录。将固定链接加入收藏夹。 ← 申请德国博士指南 […]
Four For Friday (11) // Jan 12, 2011 at 11:42 am
[…] Naval’s spot-on note on How To Pick A Co-founder. Some basic but essential […]
Quora // Jan 28, 2011 at 6:44 pm
How do I find good technical co-founders?…
Here are some places where you can find a co-founder.
Linkedin.com
Do you have a profile there? Do you have tech people in your network? If yes you can take a look at their profile and see if you find someone interesting and contact them.
If you don’…
Pros and Cons of Having a Cofounder | Lead411 Blog // Feb 24, 2011 at 9:01 am
[…] a great post from VentureHacks with advice on choosing a cofounder. Here’s my own […]
Bootup Entrepreneurial Society » Co-Founders & Captables with Danny Robinson // Mar 7, 2011 at 10:54 pm
[…] What is the ideal # of co-founders? Danny doesn’t think there is an ideal number while Venture Hacks recommends 2-3 co-founders. Each co-founder is just a shareholder. It can get complicated the more […]