Do you need a co-founder to run an agency? Do you need a partner in the business, with skin in the game just like you?
This is a controversial topic in the startup world, we have Paul Graham saying the number #1 mistake he sees in startups is only having a single founder, and on the other hand there are a bazillion articles telling you why you don't need a co-founder.
And of course you don't need one... but what are the benefits?
You can try and get things rolling by yourself, and then hire staff as you need. You also technically don't need experience in the industry, to focus on a niche, or have any existing clients - but these small parts will make your journey easier. And it's by stacking a lot of 'small parts' that gets you to where you want to be.
"I don’t think you need a co-founder. But your business will benefit immensely from having a co-founder" ― Arvid Kahl, The Bootstrapped Founder
Benefits of having a co-founder
Share the load 🐪
I know it's obvious, but I need to say it: starting a software agency is hard, and running a successful software agency is even harder. You will wear a million different hats and work your ass off - all whilst living with a lot of uncertainty (and if you're anything like me, a lot of self-doubt). Having someone there to share the load will take the pressure off, in this case two heads really can be better than one. You can divide and conquer the facets of the business, whilst playing to your individual strengths. A partner in the business can also help share the emotional load, which is oftentimes greater than the physical load.
Complimenting skillsets 🧑🏽💻
A classic combo is the 'the business one' and the 'technical one'. In a small software business I believe it's valuable that both partners have at least some technical skills, but importantly at least one of you needs the business skills - or is prepared to learn fast. Although I think both being technical proficient is important, as with all humans you will have your individual strengths and weaknesses - and this is a bonus.
"Co-founders shouldn't excel in the same areas - it's inefficient and will inevitably lead to conflicts down the road" ― Julia Hartz, CEO of Eventbrite
A perfect unity is one likes sales (and coding), and one loves to push out code. But perhaps one of you is stronger on the backend and one on the frontend. One super experienced in complex SQL, and the other has an eye for design. Whatever it is - complimentary skills between business partners is a super power, and you don't want a partner that is just a mirror image of you.
Partners in strategy ♟
A lot of business is strategy, future planning, and making important decisions. Whilst your life-partner or a mentor may be a fantastic sounding board, a canny business partner who is actually in the trenches with you already is the best strategist, as they understand the domain and issues at hand. Decisions such as hiring staff, taking on a very large project, or even pivoting to an industry or technology niche - can all be difficult to make on by yourself. And will put a lot of weight resting solely on your shoulders.
"Don’t do it alone. I would’ve lost my mind years ago without Dan, and Tighten wouldn’t be at all what it is today without him. Running a business alone is lonely. I’ve talked to friends who do it and they don’t recommend it." ― Matt Stauffer, Partner and Technical Director of Tighten
I've personally found I need to talk most things through with my business partners, and I know that's something I will always need to do. Whether it's a conversation that ends in agreement, or a challenging conversation that brings up differences of opinion - it's all valuable. Although it's hard for me to accept - I don't know everything, and sometimes I need to have my opinion changed.
A toxic founder relationship can bring a business to its knees. Bad partners are a risk, and embarking on a business with someone is not a decision that should be taken lightly.
“A lot of people treat choosing their cofounder with even less importance than they put on hiring. Don’t do this.” ― Sam Altman, CEO of OpenAI
It's a cliché, but in many respects a business relationship is like a romantic relationship:
- You need to take it seriously
- You both need to be in it for the right reasons
- You need to have respect for your partner
If any of these are misaligned then it may be a rocky path ahead.
So how do you ensure a good match with your co-founder? Arvid Kahl has a good list of key alignments to look for in a co-founder relationship, and in my experience his advice is worth its weight in gold. Without communication it can't last, without personality alignment resentment will sneak in, and without empowering each other to drive and push through the hard times, you may just both give up.
I have a had a few businesses so far, and my experience with co-founders has not always been 100% perfect, but I don't look back and wish I had of done any of them alone.
One thing I will say is more co-founders is not better.
Two complimentary humans is a great team, two people can support and improve each other to be more than the sum of its parts. Of course three, four, and five people can also improve each other. But adding more partners to a business is not simple math, it doesn't always accumulate impact in the way you expect. More people means more personalities, more opinions, and more decisions requiring a larger consensus. Just as I'm sure many software agencies have nailed it with just a single founder, there is bound to be as many who found success with three, four, or five founders.
I have started businesses with two founders, three founders - and four founders. And after all this experience, I am pretty sure my future businesses will only have two founders. Two people to share the load, steer the ship, support each other and make decisions - and then hire in great people when there is too much work to do yourself.
How do I find a co-founder? 🔎
Hopefully you already know your soon to be co-founder, that is the path of least resistance. An existing friend or colleague you respect and could imagine starting a business with. But let's assume you don't already have an acquaintance that matches the criteria you are looking for, then my friend, you are going to have to hunt.
"If you're an engineer, go to developer meetups or work on open source projects, or go to hackathons. Do things where others, engineers and builders are hanging out" ― Harj Taggar, Co-founder and CEO of Triplebyte
There is no magic answer to this, you need to align yourself with places your mysterious co-founder could be hanging out. Events and communities, online or offline, it doesn't matter. Meet more people, engage in more conversations, and increase your luck surface area.
I have already made comparisons to founders and romantic relationships - and being on the lookout for a co-founder is no different. It is the same as dating, in that even by acknowledging the fact you are looking for a partner, potential partners will start to be appear in your world. This isn't magic conjuring int up, it is your brain pattern matching and keeping your desires in your consciousness. But by no means is just 'being on the lookout' the answer, you need to put yourself out there, and get in the situations that will reside in you finding more candidates.
And the dating analogy doesn't end when you have found a potential co-founder. In fact that's where the real dating part begins. Co-founder dating is a thing, take a read of the The Founder Dating Playbook if you want some interesting advice on how to manage the fledgling relationship, and decide on whether this person is truly 'co-founder material'.
Can I just do it by myself? 🕺
Yes. But an agency of just you is not an agency - it is you as a freelancer.
An agency needs many hands. Hands to serve the current clients, whilst other hands are looking for the next clients. Technically all these hands could be yours, it's not impossible, but it will be a hard road ahead. If this is what you want I would recommend you have a solid plan in place on how to balance sales with building, how to build a pipeline of work, and at what point will you hire staff. I would also recommend a strong support network, people you can turn to instead of a business partner to help provide advice, mentorship, and also help with strategy.
"A wise man has to always listen to the peers he surrounds around himself. That's why you surround yourself with other smart people. Captain Kirk keep Mr. Spock right beside him" ―RZA, Wu-Tang Clan
For me, starting an agency meant having a bigger impact. I wanted to serve many clients, build a team, and work on large interesting projects. I also wanted to eventually scale back from doing 'everything' to mainly focusing on the parts I enjoyed the most.
Sure, it always required hard work - but for me having co-founders made it manageable. In the end I was able to stop working so hard and enjoy the benefits of the well-oiled machine that I had helped build from the ground up.
If you have any thoughts, feedback, or questions, I would love to hear from you. Please hit me up on Twitter @chrisrickard