In the first installment of this series on co-founder tension, I noted that one root cause of all co-founder tensions is when the founders fail to understand, clarify or act on the contrasting values that cause conflicting behaviors and mindsets between/among them.

In this second installment, I will focus on the other root cause: in the face of dynamic changes in a growing organization, the founders fail to re-define, re-clarify and re-value the roles each individual founder fulfills.

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Part II: Clarity, Relevance and Value of Role

This is how it begins: As an illustrative example, let’s use the so-common-it’s-practically-a-cliché dynamic that occurs when you have two co-founders, one who is the “business” or “nontechnical” founder and the other who is the “technical” founder. Usually the technical founder builds the product (whether its software, hardware or a service) and the business founder, especially in the early days, does everything else. Their partnership works smoothly from the start. They have clear roles that match well with their talents and laser focus on their next steps. At a certain point, the business founder typically steps up to raise capital to fund the company’s next stage of growth. The technical founder builds a compelling prototype and the business founder closes a first round of funding on the promise of that prototype. They both head out to a bar to celebrate. They are on top of the world. The next day, they grab lunch together to start making plans to build up the team and that’s when the tension first begins to emerge. Business Founder (BF) wants to be directly involved in hiring the first few engineers even though they would report directly to Technical Founder (TF). Meanwhile Technical Founder is eyeing Business Founder’s proposed development timeline warily. BF walks away from the meeting worried that TF is too possessive of the engineering team. TF walks away nervous that BF is demanding too much control over product direction. Seeds of doubt and distrust are planted, take root, and start to grow.

In short: Anytime your company experiences a change your co-founder dynamic will change with it. And even “good” changes can create negative tension.

What this means: All startups must change in order to grow. And by extension all co-founder relationships must change in order to keep pace with the dynamism of the company and the marketplace. The key consideration is whether your dynamic changes in a way where both founders are clear on their role, feel valued for their contributions, and feel relevant for the future ahead.

What I have found most fascinating about changes creating tension among co-founders is that it doesn’t matter much at all if the change is “good” or “bad”—-it just matters that a change is occurring. Some “good” changes might include: closing a round of funding; hiring your first few employees; landing a huge new deal; renting your first real office space. Some “bad” changes might include: a product recall; a down round; an unexpected resignation from a key teammate; a competitor launch; an acquisition offer falling through. Either type of change can influence the dynamic and make things feel heavier. In the “good” scenarios, it’s that much more disturbing to founders who experience tension because they are “supposed to be happy.” And in the “bad” scenarios, the increased tension in the relationship feels like a pile-on to the mounting stress coming from the broader challenge the company is facing.

Self-coach your way through this one: 

You can answer these questions on your own first and then when you find yourself unsure in any area—that might be a clue about where you will need to engage with your co-founder in additional conversation.

1) What recent event or milestone has changed your venture? What are some of the most significant changes that are happening?

Remember that an event could be “good” or “bad.” At this point, you only need to list out the changes the company is experiencing (e.g., hiring a team, new investors to be accountable to, new pressure from new customers, etc)

2) What is the immediate tension/conflict that is going on right now?

Imagine playing back a video in your head of the last disagreement or fight you had with your co-founder. In the BF/TF case described above, you’d cite the disagreement over who to hire next and how to evaluate/screen them. For now, leave out your director’s commentary over what else might be brewing beneath the surface.

3) What did we decide either implicitly or explicitly the last time we contracted about our work together?

This is probably where you might be rolling your eyes at me or feel exasperated. [“Contract?!?! This is a startup. We were working in my mom’s basement for four months before this. There was never any contract!”]

It’s true there might not have been a legal Contract with a capital C, but you better believe there was a contract underlying your partnership. At the very least, you each made several assumptions about working together and, more likely, you also had some level of conversation about how you wanted to work together. These assumptions and that conversation became your “contract.”

Here are the things that many co-founders will have an initial conversation about:

  • the duration of how long they will try out working together
  • if they get to a stage of figuring out equity, how they will split it up
  • initial roles for how they will divide the work that needs to get done

And here are the three assumptions I see co-founders make (wrongly) about each other that end up causing major conflict later:

  • the degree of commitment to a new venture and what “commitment” means in practice in terms of hours, sacrifices and lifestyle
  • the degree to which each co-founder is personally or passionately invested in the initial idea/product/market
  • how much control and power the co-founder who “came up with the idea” should get

As you can imagine from the above, these early-stage “contracts” are usually insufficient—but as you self-coach yourself through figuring out where your co-founder relationship is at risk, you will find it most helpful to begin with your best sense of what was explicitly or implicitly decided in your last contract.

3) What is my role now? What is their role now?

In the classic BF/TF scenario above, the BF is unclear what his role should be now that he is no longer actively fundraising. The root of their initial conflict is likely stemming from his assumption that his role should now be to step into more of a “product manager” role while the TF expects to maintain product leadership on her own and would probably prefer if the BF focused on another area of the business (sales, ops, admin, marketing) altogether. I am not going to advise you on which role would be the best for the BF because that decision is really specific to each company. However, I cannot tell you how often I have sat across from disgruntled technical founders who have complained to me: “It’s like my business founder woke up one morning and suddenly decided to get more involved in product because s/he had nothing better to do.”  When roles are unclear, co-founders start stepping on each other’s toes and, if the roles aren’t re-negotiated and clarified, then founders will start to misinterpret (and resent) how they are getting in each other’s way. But it’s not always enough to re-draw the lines of influence—the co-founders must also ensure each feels valued in the new roles.

4) How do we value ourselves and each other in these new roles?

It is one thing to re-draw the lines in the venture and shift roles and responsibilities—it’s another thing to actually believe that you and your co-founder are in the best roles possible for growing the venture. There are two temptations that arise when companies change, roles need to shift, and founders, understandably, want everyone to stay as relevant and valued as they have been previously.

#1 A Co-Founder Takes On a New Role that No One Believes S/He Can Actually Do
If you don’t believe that your co-founder can create a sales team from scratch, chances are he doesn’t either. You might say: “but someone has to do it and there is no one else!” In that case, make an interim plan. Hire an advisor with deep expertise in that function to advise/oversee the co-founder who is capable of learning quickly, but will clearly need help. The long-term plan is to hire someone who can lead that function well. And chances are that if the company and team are growing, there will be another mission-critical need that will emerge for the co-founder to attend to once the new hire steps in. The key here is that your co-founder believes in his/her ability to lead this new area and that you believe in your co-founder’s ability to get this really important thing done.

#2 A Co-Founder Takes On a New Role That Is Not Actually Important To The Company
Your co-founder might have deep experience in marketing and be chomping at the bit to kick butt for the team in this area, but if marketing is not what your company needs right now don’t let her pursue a marketing strategy too early. It’s tempting to convince yourself that the company needs her expertise in this area right now—but you can’t let a readily available solution define the problem. While your co-founder might feel comfortable deploying a certain set of skills, that doesn’t mean those are the skills you need. If you let a co-founder do this, you waste time, energy and talent that would be better directed towards areas of the company that really need focused attention. You also risk building up your own resentment when you are working long hours and feel increasingly annoyed at how much your co-founder works on something that doesn’t really matter.

If your company has changed and you can no longer find a relevant and valued role for your co-founder where s/he can thrive, it’s time for you to start thinking, collectively, about a transition plan. That might sound harsh, but it’s likely that your co-founder will also feel similarly. No one wants to stay in a company where they are no longer relevant or valued—at least not for very long. Sometimes co-founders who are important to the culture or have critical technical expertise can (and ideally should) stay involved in the venture, but in more of an advisory/consultant role.

5) How do we move forward? What’s next?  

First and foremost, in the wake of the events that have changed your company it is critical that you have a conversation with your co-founder(s) to clarify roles and ensure that you feel relevant and valued in these new or adjusted roles. Second, you need to incorporate these new roles into your contract for working together as a founding team and, where possible, “upgrade” your contract as well. What do I mean by upgrade?  In this contract negotiation, whatever was on paper before, keep it on paper and refresh it. Whatever was just a conversation before, consider moving it to some form of paper. And whatever you previously left to assumptions, consider having an explicit conversation about those. Then, look ahead to the next company milestone you anticipate reaching and make an agreement about when you will revisit this version of the contract.

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In this post and the previous one, I focused on the two most common root causes of co-founder tension and how to self-coach yourself through these conflicts when they emerge in your relationship. On a related note, I often get a lot of questions on how to anticipate these challenges in the earliest stages of a partnership. The next post in this series is my first attempt to answer these questions.

Continue on to Part III: Tips for Co-Founders Who Are Still Dating Or On Their Honeymoon

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