Is Three Founders One Too Many?(founderdating.com)
founderdating.com
Is Three Founders One Too Many?
http://founderdating.com/is-three-founders-one-too-many/
33 comments
Corporate governance is kind of like, well, every other kind of government: it has serious flaws no matter how you set it up.
If you decide three is one too many, the new pitfall you have to watch out for is tiebreaking. Suppose there's a fundamental disagreement, like whether to sell out or whether to fire one of the two founders and find someone new. You think you'll always be able to talk things through and come to a consensus, but let's say you're wrong. A naive 2-person setup simply has no way to handle a situation like that -- it's paralyzing. So you need a way to break ties. And now instead of a fair three-way split, you have one founder with more power (and investment) than the other, or you have some outside party (played by Justin Timberlake, presumably) with control over your future if they like the other guy more than you.
So maybe two founders is one too many. Going with one founder shouldn't cause any problems ... right?
If you decide three is one too many, the new pitfall you have to watch out for is tiebreaking. Suppose there's a fundamental disagreement, like whether to sell out or whether to fire one of the two founders and find someone new. You think you'll always be able to talk things through and come to a consensus, but let's say you're wrong. A naive 2-person setup simply has no way to handle a situation like that -- it's paralyzing. So you need a way to break ties. And now instead of a fair three-way split, you have one founder with more power (and investment) than the other, or you have some outside party (played by Justin Timberlake, presumably) with control over your future if they like the other guy more than you.
So maybe two founders is one too many. Going with one founder shouldn't cause any problems ... right?
If a two people team cannot hash out their problems together, it is already a sign of trouble.
Conversely, if a two people team can hash out their problems together, there is no sign of trouble yet. That's probably a good time for them to address the fundamental flaws/weaknesses/risks of a two people team, one of which I described above.
I have seen a lot of 3-founder teams fail due to founder breakup. It was pointed out to me that 3-founder teams may be the most unstable because it only takes 2 founders to agree to make a decision. Often this pattern recurs until one person feels left out and leaves.
I think one of the biggest mistakes that startups make is not getting on the same page from day one, and letting small differences become large ones. This applies equally to any sized team, but may get exacerbated as your team increases in size, and there may be a huge jump in this problem as you get to size 3.
Then again, every team size comes with its own set of issues. I wouldn't say 1 is too few, 3 is too many, and 2 is just right. I'd take this article more as, 'the perils of a 3-person startup.'
I think one of the biggest mistakes that startups make is not getting on the same page from day one, and letting small differences become large ones. This applies equally to any sized team, but may get exacerbated as your team increases in size, and there may be a huge jump in this problem as you get to size 3.
Then again, every team size comes with its own set of issues. I wouldn't say 1 is too few, 3 is too many, and 2 is just right. I'd take this article more as, 'the perils of a 3-person startup.'
[deleted]
Obligatory reference to Betteridge's Law of Headlines[1]
[1] http://en.wikipedia.org/wiki/Betteridges_Law_of_Headlines
[2] http://www.quora.com/Startups/Can-a-startup-be-successful-wi...
Any headline which ends in a question mark can be
answered by the word 'no'
[1] http://en.wikipedia.org/wiki/Betteridges_Law_of_Headlines
[2] http://www.quora.com/Startups/Can-a-startup-be-successful-wi...
I think it's pointless to make huge generalizations like this
Is two founders also one too many? Sometimes! At least with one founder you actually solve the problem of founders not agreeing on a course of action (which surely is a bigger probably two founders than an odd number like three).
I'll concede that I'm biased, but my startup has three founders and there is absolutely no doubt in my mind that we would be worse off with fewer people.
Is two founders also one too many? Sometimes! At least with one founder you actually solve the problem of founders not agreeing on a course of action (which surely is a bigger probably two founders than an odd number like three).
I'll concede that I'm biased, but my startup has three founders and there is absolutely no doubt in my mind that we would be worse off with fewer people.
Curious - are you following the Hacker, Hustler, Designer model?
I have never heard that particular phrase before, so the answer is probably not.
It's more like Hacker, Business Guy ("Hustler" sounds a little pejorative), and Sales Guy. But I'd point out that I consider us a B2B media company that makes clever use of technology, more than a "technology startup." Nailing enterprise sales is crucial to our success, which is probably not the case for consumer internet startups (or for startups that are, uh, not yet trying to make money).
It's more like Hacker, Business Guy ("Hustler" sounds a little pejorative), and Sales Guy. But I'd point out that I consider us a B2B media company that makes clever use of technology, more than a "technology startup." Nailing enterprise sales is crucial to our success, which is probably not the case for consumer internet startups (or for startups that are, uh, not yet trying to make money).
Is this some kind of well known model? What are the others?
In the legal world, firms align around "Finders, Minders, and Grinders". Finders are the well-connected guys/gals who bring in business. Minders are the intelligent ones who hash out the hard problems. And grinders get all the routine work done at a fast pace. Maybe this applies to tech?
Its been brought up in the SV circles and on HN several times in the past year or two.
Quora Discussion:
http://www.quora.com/Startups/What-would-the-ideal-web-techn...
The truth of the matter is there's no "one size fits all". Ask 100 founders and you'll get 100 different personal experiences and storied of how one structure worked for them, while other structures destroyed them.
The Hacker, Hustler, Designer model seems to hold strong with incubators, investors etc. as it seems, at the very least, to convey the atmosphere of being well rounded, fully capable and fast to deliver. Obviously this is not always the case.
The nature of past relationship between the founders, plays a large role in how well they can be expected to perform together and survive long term stress. There's no wonder YC dedicated a question to learning the nature of this relationship in their application form.
Some relationships make it, and others won't - the best you can do is try to truly and honestly asses how your relationships might hold up through hard times. Examine all aspects of it in as objective way as you can and make the decision on a case by case basis.
http://www.quora.com/Startups/What-would-the-ideal-web-techn...
The truth of the matter is there's no "one size fits all". Ask 100 founders and you'll get 100 different personal experiences and storied of how one structure worked for them, while other structures destroyed them.
The Hacker, Hustler, Designer model seems to hold strong with incubators, investors etc. as it seems, at the very least, to convey the atmosphere of being well rounded, fully capable and fast to deliver. Obviously this is not always the case.
The nature of past relationship between the founders, plays a large role in how well they can be expected to perform together and survive long term stress. There's no wonder YC dedicated a question to learning the nature of this relationship in their application form.
Some relationships make it, and others won't - the best you can do is try to truly and honestly asses how your relationships might hold up through hard times. Examine all aspects of it in as objective way as you can and make the decision on a case by case basis.
I would have to say this all depends on the overall objectives of the company. If you've got a life style start up then one person is enough. If you've got lofty goals and you're looking to grow the company, and even raise money for that startup, then you will want more than one founder.
Finding one other person is hard enough -- trying to find three seems really challenging. There's ways to make decisions and break tie-breakers without having a third co-founder.
I believe that it comes down to expertise. Its very likely that you're not going to have domain expertise in everything, so you'll have to find some other co-founder that does. I'd think that you'd want to add more co-founders to ensure you have the domain expertise covered.
There's a blog post on our website that discusses "Why Three Founders in Better than Two". Might want to check that out for ideas on why it is better to have more than two.
http://thinkspace.com/why-three-founders-is-better-than-two/
Finding one other person is hard enough -- trying to find three seems really challenging. There's ways to make decisions and break tie-breakers without having a third co-founder.
I believe that it comes down to expertise. Its very likely that you're not going to have domain expertise in everything, so you'll have to find some other co-founder that does. I'd think that you'd want to add more co-founders to ensure you have the domain expertise covered.
There's a blog post on our website that discusses "Why Three Founders in Better than Two". Might want to check that out for ideas on why it is better to have more than two.
http://thinkspace.com/why-three-founders-is-better-than-two/
I wrote all the way back in November, 2009 that three co-founders was better than two. http://spencerfry.com/threes-company I've since changed my thinking that two co-founders is a lot better and that both of those two people should be technical or design.
Noam Wasserman from HBR studies this extensively and has real data on Startup survival rates under various conditions (including founder size). This book http://www.noamwasserman.com/book/ has his results -- I don't have it, and I don't know the results. I saw him give a talk at Business of Software 2-3 years ago -- where he presented a lot of his findings.
Just to let the owner of the website know, there is a typo on your front page. Ironically, it is the word "Taltented" under "1.You Apply".
As has been said, the quality of the relationship between the founders is just as important as their individual abilities. With two founders you have one relationship, and it's hard to find good lasting relationships between two quality people.
Increase the team size by one and you go from one relationship to three.
Increase the team size by one and you go from one relationship to three.
If you have a hard time picking clear titles for founders because there is a lot of overlap there could be a problem.
simple answer, it's two to many ;)
I am actualy a single founder and I dont regret my decision. Although I can see why it is not considered a good idea but I really like to keep the decision making to myself. It results in self fulfilment such that even if I fail, I would know I did it myself and wont have someone else to blame. I guess it's a personal preference thing. I simply can't see myself working with a cofounder.
Three founders is three too many. Businesses don't need founders. They need owners and they need managing directors. Too many people think that becoming the former magically makes them into the latter.
Here is a test for the next time you are founding something. If you weren't a founder, you were just hired labor, and someone tried to give you 93% of this company and total autonomy in exchange for running it full-time, but NO other support of any kind and you would be completely on your own in every aspect of running this company - would you accept this?
For most ideas, the answer is, "Hell no. I have a lot better things to be doing with your time than running your worthless company without any support from you, full time in exchange for 93% of it."
People somehow fail to apply the same standard to their own ideas. They accept this bad deal just because the person who "gives" them 93% (or 100%) of the company is one and the same person, themselves.
Let me illustrate with an example. Think of an idea for a web site that you have.
If someoe approached you with that idea and asked you to code it, but they would not help in any way, would you do so in exchange for nearly 100% of it? Probably not.
But when you make YOURSELF the same proposition, you often end up saying, "Yes. I will code this since the result is mine."
You forget that the result is not worth the work and you would not accept it under more neutral terms.
This is simply illogical. Stop thinking like a founder, and start thinking like a managing director.
Here is a test for the next time you are founding something. If you weren't a founder, you were just hired labor, and someone tried to give you 93% of this company and total autonomy in exchange for running it full-time, but NO other support of any kind and you would be completely on your own in every aspect of running this company - would you accept this?
For most ideas, the answer is, "Hell no. I have a lot better things to be doing with your time than running your worthless company without any support from you, full time in exchange for 93% of it."
People somehow fail to apply the same standard to their own ideas. They accept this bad deal just because the person who "gives" them 93% (or 100%) of the company is one and the same person, themselves.
Let me illustrate with an example. Think of an idea for a web site that you have.
If someoe approached you with that idea and asked you to code it, but they would not help in any way, would you do so in exchange for nearly 100% of it? Probably not.
But when you make YOURSELF the same proposition, you often end up saying, "Yes. I will code this since the result is mine."
You forget that the result is not worth the work and you would not accept it under more neutral terms.
This is simply illogical. Stop thinking like a founder, and start thinking like a managing director.
This is so counter-intuitive that I'm having trouble understanding if this is a logical fallacy.
Generally agree with this unless your team is going through an incubator/accelerator. Those programs (and not just YC/500) are best taken advantage of by a 3-4 person team.
why do you think so? not sure you should optimize for a 3 month program.
Granted, I haven't been through an accelerator but I heard a great talk by Tim Falls of SendGrid who does have a lot of experience through TechStars and he covered this topic. To get full value out of an accelerator/incubator you need to be in a position to leverage the relationships you are making AND continue iterating and developing your product/business model. And two people isn't enough to do that. Love to hear your thoughts.
I see what he's saying. In terms of long term consideration though, would that early burst of ability and speed be worth some of the issues that might crop up later?
Just don't think you should optimize your team for that 3 month process
In our experience, 3 is as good as 2 if the people are as good. It's harder to find 3 good people than 2 though.