Tuesday, March 3, 2015

#Startup : #Founders vs #Others

When I founded two startups, I was keen to avoid one situation.  I had gone through this myself - the one key thing that dawns when you work for startups is that there are founders, and there are the 'others'.
The founders are the ones who have the vision, the zeal and the passion to make things happen.  The others are the one who join the startup, and help them towards the journey of success. The 'others' can be consultants, first employees and associates.  
While being a consultant or an employee on one side and 'founder' on the other, I have encountered relationships being tested, because of difference of opinions - especially on how to move things forward.  In this process, the relationship fundamentals can be challenged.  Some work it out;  others quit and move on.  This has a deep impact on the startup, considering the vulnerable stage the startup is in. 
Here are few suggestions on how to avoid, analyse and fix the situation:
Founders and Others - the need to understand is key
1. Remember, 'others' are not founders:  There is a reason why founders are founders. Founders are the visionaries. They had the guts to be off the blocks, and among other risks, have decided to put their time, money and a portion of their lives ( call it opportunity cost).  
Others are indeed respected for their skill and guts.  But the key differentiation of the 'founding vision' and the 'first mover' in terms of risk taking will make the founders what they are.  
This theory gets challenged more often than not.   How come a stakeholder who contributes to the execution is any lesser?  This is not a debate about who is better, but it is about recognition of the roles and making things work better, and therefore making the idea of the startup succeed. 

2. 'Others' don't decide, at least in early stages:  When push comes to shove, the decisions are made by the founders. Why?  They are the 'idea germinators' and 'risk takers'.  At some point, the thin line between ownership and management will dissolve indeed.  This is the trickiest factor in the nascent phases of a startup, but this recognition that the bucks stops with the 'founders' should be better understood 'well'.   There is a risk of abuse in this theory, but more often than not, the final decision rests with the owner. 
3. 'Others' deserve respect and freedom :  Indeed, founders deserve all the respect for what they started. However, the most important reason why 'others' are needed is precisely to take the idea forward to success.  Complimenting with their skills and capital, the others bring in their own style and past experiences into the organization.  This is key for their own contribution to succeed.  The founders need to recognize this, and work together to foster positivity and leverage the strength of the 'others'.  Here is where the differentiation of 'ownership' and 'employee' needs to be defined. 
A founder is also an employee of the company, whose role is defined.  And like the 'others', founders are equals in terms of executing their roles and collaborating with everybody.  This equanimous approach brings in a respectful and free working relationship, rather than an constrictive environment. 
4. 'Founders' need to be understood :  The others, who join the game a little later, indeed require the same amount of respect.  But what needs to be appreciated is the fine print. Founders carry a degree of dogma, which is slightly higher, as they are the germinators of the idea, and hence are more clingy to the idea, especially the idea getting morphed.  So some degree of understanding by the 'others' about this factor of 'founders' would make the relationship pan out better.
Collaboration, respect and then the final glue- Finance!

Another aspect of the founder's psyche needs to be understood as well. The founders are normally the initial funders of the startup, and hence own the risk completely more or less. And that makes them a little jittery and paranoid about how things 'play out'.  While entrepreneurs embrace risk as part of their journey, this aspect of paranoia should be factored into the mind of others, so that the interactions are better addressing any concerns that might arise. 
5. 'Finance' is the ONLY glue :  This is the ultimate truth.  The engagement between the founders and others, apart from the human element, is finance.  The commitments either side is stuck on the financial aspect - in terms of 'investments' or 'sweat' vs the equity or other perks within the startup.   The key factor here is that, this is the ultimate test of commitment either side, and has to serve as the beacon for the journey forward.   A formal agreement is better - but a constantly reviewable agreement leaves scope for rolling stones.  Clarity is key, and constant review brings it at all points in time. 
6. Sometimes it is good to part than stretch:  All said, inspite of a clear agreement, there is a possibility that the relationship between the founder's and others can vary. It is like that the 'others' value can have a shelf life, and that the partnership therefore does not carry value.  
However, in some cases, the partnership can pan into a new avatar.  In that case, one has to revise the agreement in such a way that the new arrangement is documented and the learnings of the past experience factored. 

The roles of 'founders' and 'others' play a vital role in the success of a startup.  Most people sort it out privately, and sometimes the dirty linen spills over to the public domain.  This should be avoided at all cost - it was after all a professional relationship, and if it did not work out, then it is better sorted out at a professional level.   The ability to 'let go' and 'move on' is key factor for both the founders and others - because the roles could after all be reversed some day. 

- Ashok Subramanian