Of all the things used to measure the progress and / or success for startups, raising funds from investors seems to have the greatest weightage. Despite protests from some investors, anyone who has actually been funded and basically any other person with common sense, ‘general public opinion’ seems determined to measure the credibility of a business by the amount of money that has been raised by it.
I will save my complaints on the flaws of this approach for another post. Nor is this a piece about the merits or demerits of getting funding in general — instead its about a simple rule of thumb that I have discovered over time:
If you haven’t managed to get the right co-founder(s) to come on board your business, you most probably will not get the right investor either.
Not trying to demotivate early stage entrepreneurs who don’t have co-founders, just sharing a lesson that I learnt the hardest way possible.
And of course, the statement above comes with the standard disclaimers: some businesses don’t need multiple founders (or even funding for that matter), and there are always exceptions to the rule.
But coming back to technology entrepreneurs looking to build venture backed companies (popularly known as ‘startups’), getting co-founders is to me the essential first step. And the reason for that is simple:
You simply cannot generate the traction you need to get funding, in the minimal time frame available, if you are the only person running the show.
Starting a new company is a challenge not just because you need to set up everything from scratch, its tough cause you need to setup everything from scratch in a very short period of time.
Most entrepreneurs that start off do so with around a year or more of savings to manage personal expenses while you get things off the ground (as I also did). Now in this year or so, you need to refine your idea, build your product, launch your business, service customers, iterate based on their feedback and finally start generating measurable and repeatable success — the last milestone being the one that professional investors would typically want to see before stepping in. You could do this alone if you have loads of time, or money (or both). But chances are, like me, you only have ‘intelligence’ 🙂
No, even Messi could not score alone…
There are plenty of other reasons why getting a co-founder first is valuable — but most importantly, going through the process of getting a co-founder is perhaps the most basic exercise in validating, and building, your business: You learn to articulate your vision, come up with a believable plan to achieve it, put your thoughts and yourself out there, absorb or ignore the criticism, and in general prove that your business is going to become big. That’s pretty much everything you need to do to get funding as well…
A final note for people who are looking for co-founders but don’t have them yet — Assuming that you have already exhausted your first and second degree network at this point, this next part is indeed superbly difficult. You have to discover the right people, and then get them excited to work with you, both of which can take a lot of time and effort. At the same time, you can take solace in the fact that it has been done before.