A case of co-founder misalignment


4

tldr; In a company with 3 co-founders, 2(say Adam and Charlie) are pulling in opposite directions, and everything is being decided by committee or things don't move fast enough. Need help exploring the various ways things could be set right from here.

Detailed story (names and context modified for anonymity):

Adam, Bob, and Charlie have worked in the same company(but not the same team). They've been good friends for several years.

Adam and Bob have worked as a team for some time; Bob and Charlie have worked as a team too. Adam and Bob were considering starting up for quite sometime, and were moonlighting on a few ideas. Meanwhile, Charlie asked Bob about starting up together. Bob thought of making it a 3 member team since he liked working with both Charlie and Adam. He told Adam that Charlie would be a good person to have on team. Adam too thought that Charlie would be a great co-founder to have, since Charlie was smart, sharp and technically very sound. From Charlie's angle, Adam was technically good, had helped him make a few personal and career decisions, was highly rational, and Charlie had looked up to Adam on a few aspects. So, Charlie too thought that Adam would be a great co-founder to have.

All three respect each other and the feelings described above haven't changed a bit. But the problem is with Adam and Charlie believing that their ideologies are in the opposite ends.

Adam wants to build a company around a product that solves the problem at hand 100%, and would want to do whatever it takes for it(be it using trained turks or a marketplace of people skilled in doing the work). Charlie wants to build a very hacker friendly culture in the company and doesn't want to deal with lot of people. Even if he personally wouldn't have to deal with people, he doesn't want that.

The problem at hand might consume 6-8 months of research to see if it could be solved completely with algorithms or not. Adam wants to quickly evaluate whether the market would be willing to pay for this product(Enterprise product) or not, by making use of turks(skilled ones that have to be found and trained by the company; not the amazon ones) instead of spending months to devise reliable algorithms for those(its something humans to intuitively).

Algorithms, in Adam's opinion would come in to increase the efficiency of the system and to make the product super scalable. For Charlie, if the problem is not algorithmically 100% solvable, even if it would involve 2% labor work, he isn't in for the game. Adam believes that the problem isn't 100% algorithmically solvable.

All conversations and arguments that have happened so far have resulted in compromises, with Bob being the tie breaker. Adam looks at Charlie as an idealist who would be happy doing an open source project full time, while Charlie looks at Adam as a capitalist who would optimise for the short term. Adam would completely lose interest if he has to work heads down, without market validation. Charlie would completely lose interest if he has to work in Adam's way of powering the product with turks. Bob finds it frustrating too.

A few additional points that might be relevant:

  1. Bob doesn't specifically believe in either of the approaches. He wants traction in the company, and is open to either.
  2. This problem would be gone once the company crosses the initial stages and the three have well defined roles to play. There is a clear agreement in what role each is going to play in that stage.
  3. If the team gets into a different product, where technical uncertainty is lower, and metric for growth in the initial stages would just be user engagement(and not paying customers or revenue), the team might be highly aligned.
  4. If either Adam or Charlie leaves, Bob and the remaining person would make a good team that moves fast in one direction, and the deciding by committee problem would be gone too. The inclination is to stay intact as a team and make things work. One person leaving would be the last resort to consider.
  5. The team came together for the team itself, and not for a specific product. Charlie came up with the idea for the current product.
  6. Either of Adam or Charlie would make a dominant co-founder in the other's absence.
  7. Charlie wants to build a company where a bunch of hackers would sit and write code, and customers would pay for the product, which is the software itself. Adam would like to shape the culture based on what kind of company would solve the problem at hand. He would be fine even if the code doesn't directly translate to revenue. In short, Charlie wouldn't have been happy building an Airbnb or Amazon, while Adam would have been.

If you need more context, would be happy to give.

Would appreciate your thoughts on how we could solve this problem.

EDIT : It would take 6-8 months of research effort. If it works, a working MVP should be done in a couple of more weeks from then.

There is runway for 18-24 months.

Co-Founder Entrepreneurs

asked Dec 25 '12 at 20:12
Blank
Founder X
21 points
Get up to $750K in working capital to finance your business: Clarify Capital Business Loans
  • Welcome to OnStartups.com. Nice write-up but can you go easier on the slang? – Karlson 10 years ago
  • Thanks for the comment. Could you point me to the places where I'm using slang? – Founder X 9 years ago
  • How about turks. – Karlson 9 years ago

3 Answers


2

Looks like this is a battle: Human beings + Capitalist VS Algorithm + Hacker :-)

Assuming you three work here together for making money but not for fun only, I came to my conclusion to support Adam.

Adam is quite realistic:

  1. He always keeps in mind a company's first task is to make money to survive.
  2. He knows the in and out and limitation of each solution. Adam has not denied the benefit of algorithm solution at all, but he recognized it's for efficiency and scaling. If turks really could solve the problem with same result less efficiently and in small scale, I agree with him point.

Turks solution is nothing wrong if same problem could be solved and result being acceptable to clients:

  1. The lead time is much shorter, helping verify the idea in much less cost.
  2. You pay turks by tasks done. Tasks only come after business. So the cost comes with income.
  3. You can get feedbacks in very early stage to improve turks solution and even future algorithm solution.

Algorithm solution is quite expensive. It'll take 6-8 months for research only, let alone the time to finish product. Based on your estimation it'll take at least one year to generate revenue. That's quite long for a team without any income, bearing the opportunity cost of your salary and the real cost of office blah blah.

How about you start with turks solution at first? Then you can use the money earned and the feedbacks from clients to support research of algorithm solution, which may be helpful in the long run. And each of the team member could play an important role in this arrangement.

answered Dec 27 '12 at 05:34
Blank
Billy Chan
1,179 points

1

It time to sit down and decide on a strategy everyone agrees to (or at least can live with) - a team can't work if members are constantly pulling in opposite directions.

I personally agree with Adam, if you are trying to start a company you have to solve a real problem in a way that real people are willing to pay for - if you want to only hack away at an interesting problem don't do it as a business - when you run a business you have to get customers, you have to sell stuff and you have to deal with boring and annoying things like accounting - as a founder you can expect that writing fun code is something you do 20% or less of the time (if you are lucky).

Another important point you should take into account is how much money you have and how much risk you are comfortable with taking:

6-8 months for "research only" means 2-3 years to finished product (probably more if it's scalable, modular and you "do it right").

  1. Do you have enough money to survive with no income for 3 years or more?
  2. Are you comfortable working on something for 3 years or more without knowing if there are any customers that are interested in your product?

If you are doing this with VC money (and lots of it) you can play the "do something fun and hope to monetize it later" game, if you don't have essentially unlimited funds you have to start selling quickly to survive.

By the way, businesses where "metric for growth in the initial stages would just be user engagement" are also something you can only do if someone else is paying, you can't buy food with user engagement, you can't pay your mortgage with user engagement and you can't pay salaries with user engagement - an organization only turns to a viable business when you find a way to turn user engagement into money.

answered Dec 30 '12 at 23:29
Blank
Nir
1,569 points
  • I love that last paragraph. – James Adam 9 years ago

0

Problem is everyone thinks their opinion is correct - and it seems that Adam being pegged as the shameless capitalist and Charlie the misunderstood hacker doesn't help things.

Unless this is a programming exercise and / or you have enough cash to fund such efforts, the only thing that really matters is what your market & targeted customers wants.

Validating the market (and other Adam / Charlie / Bob assumptions within the context of the market) should be your goal. Better to validate what the market size actually is and what they are willing to pay for before engaging in a multi-month algo-dev fest that could potentially return zero value to a market.

Remove the emotion from the process ("capitalist" vs "hacker"). Work to define a common approach - perhaps agreeing to a agile process would help bring everyone together to prove or disprove theories - (Running lean maybe a good process review that everyone could relate to.)

Best of luck.

answered Jan 3 '13 at 05:25
Blank
Jim Galley
9,952 points

Your Answer

  • Bold
  • Italic
  • • Bullets
  • 1. Numbers
  • Quote
Not the answer you're looking for? Ask your own question or browse other questions in these topics:

Co-Founder Entrepreneurs