Cre8tive Capital wants to ensure startup tech and tech enabled companies are well managed and stable. We are writing this blog to help you with essential questions that we often see clients struggle with. Welcome to Part 3 of Building a Great Team.
Starting a successful startup on your own can be difficult. Successful startups require time and energy and can be too demanding for one person to do all of it by themselves. Many times it makes sense to form a team who can complement your skills to work together as a co-founder. Some of these times include: when you lack a technical skill, recognize a lack in required managerial/business building competence, or it is a requirement to obtain funding.
Choosing a co-founder is not always easy. Many different things should be taken into consideration when choosing a partner. This partner will be with you for potentially years and will have a large say in the direction of the company. The key is to have the same drive to succeed and resilience to overcome each and every obstacle. Your co-founder and partner should complement you by compensating for your weaknesses. The process of searching for a partner should look something like this:
- The competence you are looking for in a partner
- The character traits that would best fit yours
- What value he/she would bring to the business
- How much equity you are willing to surrender
2. Reach out to your network. It is easier to work with someone you already know or is recommended by someone you trust.
3. Interview or have a chat with potential candidates. Take your time, do not expect to conclude the process in the first day. Most importantly ensure he/she is a good fit – that you can work with them.
4. Legalize the new relationship. Get a good lawyer to ensure you and your business are protected as much as possible by a good contract.
Do not be afraid to ask as many questions as possible. Just as you would want to get to know a potential spouse as much as possible, you should also try to know all that you can. Entrepreneur Magazine has a great article discussing a list of questions that you can ask a potential suitor, and that list can be found here.
Nathan and Brian can be a lesson in how to best pick a partner that can compliment you in the skills that you lack when founding and growing your business.
Brian was always creative growing up and excelled at design. He decided to attend the Rhode Island School of Design and graduated with a degree in industrial design. This led to him getting a design job in San Francisco; he got an apartment in San Francisco with a college friend of his. Due to the prices in San Francisco, it became difficult for Brian and his roommate to afford rent at their apartment. The Industrial Designers of America were holding a conference in San Francisco, but all of the hotels were booked so Brian decided to rent out his apartment for money. They bought air mattresses, made a very simple website to advertise, and jokingly called their place “Airbed and Breakfast.”
Brian was able to make some money from renting out his place and decided to start a business out of it. Brian lacked much of the technical knowledge to create a better website and make an easier to use interface so he contacted his friend Nathan. His friend Nathan was an old roommate and had graduated with a degree in computer science. Nathan agreed to come on board as a co-founder and helped launch a new redesigned website. By the summer of that year, the business had been entirely revamped so they met with investors and tried to get their first funding. Investors were not convinced it would be successful so Brian and Nathan were on their own in trying to fund their idea.
Since the site was not making enough money to sustain them, Brian and Nathan had an amazing idea. The 2008 presidential election was coming up so Brian and Nathan decided to transform boxes of cereal into Obama O’s and Cap’n McCains. The two sold these boxes of cereal to the public for $40 each. Each box came with a limited-edition number and information about the company which served to advertise for the company. This marketing strategy netted them $30,000 to invest into the company.
The creativity and passion of Brian and Nathan caught the eye of a notable investor. Paul Graham of Y Combinator invited them to come spend time at the accelerator to perfect their company. They worked there for several months trying to improve the company, but investors still not did not fully believe in it so they continued to work on their idea.
A few months later, they finally picked up a $600,000 seed investment from Sequoia Capital. The company continued on that upward trend and only grew from then on. Brian and Nathan decided something needed to be changed though. They decided to get rid of the Airbed and Breakfast name and changed it to the much simpler Airbnb.
About four years after those first guests in Brian’s apartment, Airbnb had grown to exist in 89 countries and had hit 1 million nights booked on the platform. Shortly after, Airbnb raised an additional $112 million and had a billion dollar valuation. Airbnb would only grow from there with it now existing in 191 countries and being worth almost $25 billion. A company that started with just three air mattresses in its founder’s apartment now has grown to the point of being a legitimate threat to the entire hotel industry and is only growing.