TWO’S COMPANY,THREE’S A CROWD!!??
Gone are the days when the above adage held true! In these times, of a startup in every gully and nukkad, the more the hands on the deck, to steer the ship, the better! The traditional concept of a single captain of the ship, however, still holds true!
Before you start wondering where this conversation is leading to, let me shed some light on it. I am referring to the fact, that there are numerous startups which have, not just a couple of founders on board, but multiple co-founders, sometimes as high as 7, who invest their money, time and energy to that one startup.
According to many entrepreneurs, this has greater benefits than disadvantages; it also has its own challenges. The biggest advantage is, that each co-founder contributes his/her unique set of talents, intelligence and skill sets to the startup. A potpourri of sorts, so to speak.
When those skills become complimentary, the entire business benefits by virtue of having on hand, specialised know-how in different domains. It’s a clear advantage when all co-founders contribute specialised skills, instead of early employees or people hired later on. That ensures that the commitment to the vision and mission of the startup, is very high. For eg. In a Tech startup, one of them should necessarily be a technology wizard, one could be an expert in sales and marketing and one in finance to raise funds etc. When roles are specific and clearly defined, it leads to better accountability and transparency.
Moreover, in times of crisis, the onus of the downturn is shared equally by all; i.e. everyone concerned shares the bouquets and the brickbats.
The ideal number of co-founders according to some, should be 3. Going by popular feeling, the larger the founding team, greater could be differences of opinion on the daily running of affairs, sharing equity and ill-will amongst members, especially when some could have joined in slightly later.
Specifically, with respect to equity, there are a host of factors that decide its distribution for each founder, like idea generation, capital contribution, business planning, domain expertise, etc. This can be augmented by using a scientific method for calculation. In general, the ones who make the highest contribution and who take the greatest risk, are given a higher percentage.
But irrespective of the size of the team, there should necessarily be a CEO, to take the final call in case of vastly different opinions, and to lead the startup from the front.
These issues can actually be anticipated in advance and sorted out as formal agreements with clear terms and conditions, which could avoid confusion, and ensure smooth sailing as the startup expands.
Apropos that, there are a few, like Pavan Nanda of Zo Rooms, with 7 co-founders, who are quite upbeat and confident about having many co-founders. He happily claims that, “Too many cooks make a rich and lavish buffet”.
It also pays rich dividends through the growth phases of the startup, if the team members have worked together, in the past as the team then behaves like a family, familiar with each other’s idiosyncrasies. As team work in the true sense, is the most significant factor which prevents the startup from breaking up.
The entire team of Zo Rooms, an online budget hotel aggregator, knew each other, as they had earlier, in 2013, started Zostel, India’s first chain of hostels for backpackers. So, coming together, for this new venture, was not at all difficult. According to him, a bigger team expedites all matters from decision making to execution.
Shubh Bansal, one of the seven cofounders of Truebil, an online marketplace for pre-owned cars reiterates the same philosophy.
For other startups, there are varied factors which glue the cofounders together and keep the fires burning!! While for Handy Home, an on-demand electronics services firm, it’s the well-defined delegation of responsibilities, for the five cofounders of TinyOwl, a food ordering app started by IIT-Bombay graduates, it’s remaining convinced about the core idea.
But what about the lone climber? The take on this one appears to be ambiguous!
According to Deepak Ravindran, the founder of Lookup, a messaging app that allows chat between customers and local merchants without sharing their mobile numbers, the going can’t be smoother. Although a steep uphill task, the format of a single leader who is going to shoulder all responsibilities is like an all-inclusive master stroke with all the perks of flexibility, one clear vision, and accountability only to oneself.
As against that, there are founders who start solo or have been left to go solo, who don’t have co-founders, for want of having the right people. The chances of striking the right note with the investors too, become doubtful at times, in a single-founder set-up.
In the end, the team that wins, is the team that thinks it can!
It just needs one person who thinks and can convince the others that, this is an out-of-the-world idea, it’s going to work and it’s going to change the axis around which the earth’s spinning!!!
1. (2015). Retrieved 24 December 2015, from http://economictimes.indiatimes.com/small-biz/startups/inmobis-naveen-tewari-on-the-benefits-of-having-cofounders-who-are-different-yet-similar/articleshow/49210449.cms
2. WSJ,. (2015). Charlie Brock: Three Is the Magic Number, But One Must Be CEO. Retrieved 24 December 2015, from http://blogs.wsj.com/accelerators/2013/07/27/charlie-brock-three-is-the-magic-number-but-one-must-be-ceo/
3. WSJ,. (2015). Frans Van Hulle: Raising Your Startup Together. Retrieved 24 December 2015, from http://blogs.wsj.com/accelerators/2013/07/27/frans-van-hulle-raising-your-startup-together/
4. WSJ,. (2015). Steve Blank: Defining the Roles of Founders. Retrieved 24 December 2015, from http://blogs.wsj.com/accelerators/2013/07/22/steve-blank-defining-the-roles-of-founders/