Co-founders are both the most important thing that your company needs and the most likely reason your company will fail. If you don’t have any co-founders, when you hit that dip, that speed bump along the road, you will be unable to continue. There will be nobody to talk to, nobody to brainstorm with, nobody who will come up with fresh ideas or new ways of doing things. When the customers are complaining, when you hit an impossible bug, without a co-founder, it is easy to give up or just bury your head in unimportant work.

But with a co-founder, the situation can be even worse. It’s a bit like being married – if the marriage works out well, it’s way better than being single. But if the marriage turns out terrible, being single would be heavenly.

A while back when I was consulting in the DirectX area, I had a client called Eric. He was a soft spoken guy, incredibly nice, but he always had this air of sadness around him. Once, we were chatting in the evening, and he suddenly started telling me his life story. He had been running a software business with a co-founder from college, and the business had just started taking off. Suddenly, his co-founder started acting over-bearing and trying to get Eric to reduce his share of the business. They started fighting, they disagreed on some core features, and at some point, Eric came back home and he could not access the servers. An ugly battle started then that ended with Eric being ousted from the company in exchange for some cash.

The co-founders of small startups have very personal relationships. The line between family, friendship and work blurs completely and they intersect and merge with each other. Flaws in people become magnified when people get that close. Just like the biggest fights can be between brothers, people who have their lives so intertwined can get into big battles about unimportant things.

How co-founders should be

Imagine you were in some 16th century tavern, having an ale and then a man walks in and says – which of you men here is ready to join me in war, and have your chance at fame and fortune? You will immediately size up the man and decide – can I do battle with this man by my side? Can I follow this man? Can I trust this man? Will this man be smart enough to actually make me achieve fame and fortune, or will he leave me to bleed to death in some field?

A person who instills confidence in you in all of those questions is the person you want to co- found a company with.

And yes, a partnership is never really equal. There has to be someone who is somewhat more equal than others. There is nothing more devastating than a partnership were all the members have exactly equal rights and votes. This just does not work. Human society and all monkeys always have a single individual at the top and with all others, even though they are almost equal, being not quite equal.

Any company where several people believe they should have final say or be consulted on final say is usually going to fail with a bunch of arguments and fights. The partnership may actually work very well in this mode so long no money I’d bring made, but as soon as there is cash, the clashes will start.

There has to be a clear and obvious leader who has final say within every company. That’s just how the big apes roll.

So you want to start a company, huh?

Don’t just go for the obvious co-founder person around you. You may have some guy you know who is somewhat good in IT, this should not be your cofounder just because he lives near you.

Spend some time getting out there and meeting people and finding out who you are compatible with. Form short term collaborations on small projects and websites and see with whom you can work the best. When you want to get serious with a co-founder, make sure you have really worked together for a while.

When you have someone you want to work with, you will know pretty quickly. It’s like meeting the right girl – you know quite quickly this is the person for you. But to find that person, you need to have met a lot of the wrong people first. Few people are lucky enough to meet the right person straight away, or to have the perfect person be your childhood friend.

Professionalism as a way of doing things

Crazy Internet startups where everyone is really chummy with each other are great way to start a company, but it does not scale. Close personal relationships means that people will get into fights, and in small companies, this can be devastating to morale and your productivity. As a company grows, relationships should be formalized. People who are friends should be friends, but people who are not the types likely to be friends should not be forced to do this.

Work should be governed by mutual respect between the people working. It will seem as if the tone of the company is becoming more drab, but taking away the biggest highs also takes away the lowest lows. And the company in the end is there to make money, and this works best when everyone feels comfortable at work, are able to be as quirky as they naturally are without getting in the hair of other people, and has their space to be productive in.

The story of Eric, completed

Eric, after having been kicked out of his company had hired me as a consultant to build his new software. I got a salary to do the code and also to talk with him about the software. He would come up with a business strategy and ask my opinion, and together we designed a good business model.

When the software was done, he said thank you and gave me a nice bonus. He launched the software and now, a few years later, he is one of the biggest players in the media world. I did a lot of follow up work and watched as he basically out-competed his old company to pieces. He took everything he knew from the old company and not only reimplemented it, he fixed the broken parts.

And when the big payout came, he did not have to share with anyone. Last I spoke to him, he has a lovely wife and is quite happy.

Business building is about relationships in no small way. When you start a company, keep that in mind, and choose wisely who you want to be that close to you.