5 Tips to Prevent Co-founders Disagreement and Fights

(and a story)

Let's start with a story - enjoy the drama first! Here is a story of how it goes with co-founders...

You found a co-founder

Imagine, for a moment, entering into a business partnership with someone you've just met. The world of co-founder relationships, especially with those you barely know, is pretty much like venturing into uncharted waters. The excitement of a new venture is met with the unease of the unknown: Will we work well together? How do we align our visions? And most importantly, how do we ensure success, and what does success mean for each one of us?

Joyful beginning

As initial weeks go by, it becomes apparent that while both co-founders are passionate and committed, they have different working styles, areas of expertise, and availability. Without any prior relationship or work history to fall back on, misunderstandings arise.

Who is responsible for what? Why is one founder spending more hours than the other? And, as a challenging decision about the company's direction looms ahead, the realisation hits: they haven't set a clear framework for navigating these murky waters.

Resolving conflict

Recognising the potential pitfalls ahead, our co-founders sit down for a strategic meeting. Their first order of business? Documenting expectations and agreements.

This will act as a compass, providing direction and clarity. They delineate roles, ensuring each founder knows their area of responsibility. Next, they discuss time commitments, ensuring both understand and agree on the time and effort needed.

Aware of the differences in their contributions, they also set up a system for addressing potential disagreements, particularly when making pivotal company decisions. An agreed-upon process ensures that conflicts can be resolved swiftly, preventing them from becoming insurmountable obstacles. And for those unforeseen challenges, like one co-founder being unable to meet their time commitment, a contingency plan is put in place, perhaps allocating funds for temporary assistance.

Happy ending

With these expectations and agreements written down, the document becomes their anchor, a reference point to ensure they remain aligned in their journey. Both founders feel a renewed sense of partnership. With clear communication and transparency as their guiding stars, they set forth, more confident than ever, in the shared venture they've embarked upon.

In the end, while their relationship might have begun on uncertain grounds, their commitment to open communication and strategic planning paved the way for a successful and harmonious partnership.

The moral of the happy-ending co-founder story

The story above has a happy ending, but most of the time, when co-founders let things escalate, it ends up not so nice. It also does not end well if you spend too much time discussing every possible scenario and downside early on.

I have experienced the co-founder issues several times, once to the point that the venture didn't even take off. That's how much we got stuck on discussions about potential scenarios of downside and upside and each others’ responsibilities.

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Practical Tips to Prevent Co-founders Disagreements and Fights

I start with this - it is crucial to discuss and document your expectations and agreements upfront to effectively work with co-founders, especially if you are not familiar with each other.

Even if you have known each other for a long time or have worked together before, writing things down is still a good practice to ensure everyone is on the same page.

What you should document and discuss

Mutual understanding of basic cornerstones for your cooperation and business can serve you greatly. Rather than going into great detail about every possible scenario, focus on key aspects such as:

Clearly defining each co-founder's area of responsibility

• What will you work on?
• What results are you responsible for?
  

Determining the amount of time each co-founder will commit to the business weekly and monthly

• this is so key, I can't stress it enough! There will be differences on day to day basis, but they should smooth out over time.

Developing a plan to handle situations where a co-founder is unable to fulfill their time commitment

• again very crucial to know how you will balance your contributions and what you will do when there's work to be done, which is stalling.
• Will you contribute additional funds to hire someone to cover the work?
• Will you temporarily limit the share of the upside? Or will you do nothing?
• You don't have to do anything; it's totally up to you, but make sure you're comfortable with the agreed path.

Way of resolving potential disagreements on essential matters

• Matters like the company's direction or client work, especially if shares, responsibilities, and time allocations are unequal.

• I'm not talking about describing every possible scenario! No way!
• I'm talking about a mental exercise where you find an acceptable way for all co-founders to resolve major decision conflicts.

Let me give you examples:

• Imagine you can't agree with your co-founders on pricing: are we going for premium or budget pricing?
• Or do you disagree about bringing a strategic partner on board for 20% share?
• What will you do?

Try to find and describe a process that you will be ok to use to get to the final decision. When that decision is made, everyone commits to it, even if they initially disagree.

It's easier than it looks

This may look like a lot, but you can draft this in 30 minutes over a beer or pizza. The sooner you do it, the faster it will go - optimism is always running high early on!

By establishing these expectations upfront, you can minimise misunderstandings and ensure a smoother working relationship with your co-founders. You can also stop if you see that it might not work out well because your expectations are just too different.

Tip no. 5 - a side project

One last tip: starting by treating your venture as a side project is a good de-risking approach when you are not well-acquainted with your co-founders.

I definitely wish you a stroke of good luck!

And if you ever encounter issues down the road with your co-founders or partners, don't despair. If it gets really bad, consider using a mediator to get you all back on track.

I've done mediator work a few times, so reach out to see if I can help. (link to Tidycal booking page)