Startups come in all shapes and sizes. With big teams squeezed into small offices, or a few people scattered around the globe relying on shaky WiFi to stay in touch. There is clear flexibility in how you start and run a company, but often much debate centres on forming the perfect founding team.
Is it better to go solo or to find co-founders who believe in the vision enough to join you building from the foundation up? What’s the real impact on share distribution? Do co-founders need to be local, culturally similar or in posession of totally different skillsets?
A few months ago I joined Cocoon, a smart home security company with five founders (have a nose around the website, I think it’s cool but I’m biased). For the past six years I’ve worked with startups, but have never come across such a large founding team. It made me curious, would it result in more bickering, slower decisions, personality clashes?… Since joining the company I’ve been watching the dynamics play out, wondering if they’re onto something or if “too many cooks spoil the broth”.
I must say that, overwhelmingly, having 5 founders seems to work.
5 reasons having 5 founders works.
For a solo founder or small founding team, if someone is on the wrong track it’s hard to pull them back in line. Even if a structure is relatively flat most employees won’t step up to correct a founder in critical decisions, it takes another founder to do that unless you have a really proactive board.
With more founders, there is more accountability around decisions, progress and results.
Holding people to account can sound negative, but it’s all part of running a successful business and can’t happen effectively without a great support structure. If people are aware of what you’re working on then they can support you through tough decision making, creative blanks, problem solving and in knowing when you should push yourself or pause for breath.
This support system is something many solo founders struggle without. The value of working alongside others who are (hopefully) as passionate as you on a business can be the factor that secures success.
You meet all sorts of different people along life’s path and you never know who might one day prove helpful. The more founders, the more contacts you have who could open doors and extend your reach to a wider audience for investment, sales, mentorship or whatever it is your business needs.
Vision and Belief
One person driving a vision can be powerful, but when that person stands with others the passion becomes more contagious and the belief becomes reinforced to appear more viable.
It is likely that with a larger number of founders there’ll be more diversity, and it’s a fact that the more diversity in a company the better they perform. (One of many pieces of research on the benefits of diversity by McKinsey)
More founders is likely to mean greater variations in cultural views, areas of knowledge, interest, and communities they’re involved in. But, maybe most valuable of all, is the likely cocktail of skill sets.
Cocoon’s founding team have a really diverse and complementary set of skills. There’s a chartered accountant who’s great at making considered opinions and really understanding their commercial implications, there’s a marketing professional well respected for his knack to understand customers and for being an animated fast thinking presenter. There are three technical founders covering hardware, software, platforms, servers, integrations, and UX. Their experience and understanding of project management and problem solving means they are incredibly powerful at creating smart solutions.
What unites them? They are all doers, with experience in building successful companies from the ground up, in managing teams, technology, and customer expectations. The majority have held leading roles for some of the world’s most well-known internet security companies so really understand how to secure the privacy of Cocoon customers. But most importantly, they all believe in making the world a safer place through home security that’s smart but simple.
*Yes Cocoon founders are all men. They can themselves still be diverse, and active promoters of diversity. This will be a follow up blog post.
The cons of a big founding team
A larger founding team inevitably means more dilution, when starting out you’re splitting nothing between you. Spreading that nothing a little further means that the share you get out, if you reach success together, is a little less. But will you even reach success without their help? Might they help you reach far greater success, making the smaller percentage worth more?
If the chance of success is less without them, then you could end up with nothing anyway? Surely it’s worth having a smaller percentage in a far more successful business!
This is a real potential problem, early stage companies must move fast and lots of founders can mean slow progress, but put a few measures in place and a larger team needn’t make a company move more slowly.
These can be as simple as having clear communication systems, be they morning standups or a slack channel, scheduling regular updates, ensuring you trust each other to flag issues, and perhaps most importantly, giving people ownership of areas that match their expertise.
There is no such thing as one size fits all, every company is different.
There may be reasons why a large founding team is not right for you or your industry. Sometimes the right person can drive a company to success on their own, my good friend Jenny Griffiths (SnapFashion) is a prime example. However, as I see Cocoon go from strength to strength, it seems clear that our founding team work well for each other, our industry and our customers. In the case of Cocoon, many heads really are better than one.
Coming together is a beginning, staying together is progress, and working together is success – Henry Ford