How To Create An All-Star Team With Partners And Cofounders
If you want to go fast, go alone; if you want to go far, go together
Anyone can create app ideas, but not everyone has the skills needed to actually build apps. Likewise, many developers don’t know enough about marketing to pull off a successful marketing campaign to create buzz around their apps.
As an indie app maker you often have to wear different hats. Marketing, development, outreach, customer relations, business development – to name a few. Although you can learn any of those disciplines given enough time, you often simply don’t have that much time to invest in your business. Perhaps you’re working a day-job, you study part-time, or you just don’t want to spend all of your time pursuing a new app idea.
This is where partners and co-founders come in. Just like the quote at the top of this article says: if you want to go fast, go alone, but if you want to go farther, go together. Co-founders and business partners can help you speed up your time-to-market, speed up development of your app, and bring invaluable knowledge and expertise to your app venture.
Often, business isn’t easy. Running your own startup, whether it’s a side-hustle or a full-fledged enterprise, comes with hard times in which you doubt yourself, lose faith in your ideas, and despise the universe for not sending you a signal that you’re on the right track. Co-founders can help you through that, just like you would help them when times get rough.
Working together with a partner or co-founder comes with challenges, too. Success and money often brings out the good and the bad in people, with sometimes devastating results. Founders split, argue over petty issues, and never talk to each other again. Partners lose faith in the viability of your ideas, and skimp on their responsibilities or quit altogether.
There’s no proven path for working together with people, but in this article I’d like to point out to you 3 different methods of strengthening your business by working together. In it, you’ll find out what you need to do to smith a solid partnership and what pitfalls to avoid.
Find a technical or marketing co-founder
You know the stories about famous co-founder teams: Jobs and Wozniak, Gates and Allen, Page and Brin, Saverin and Zuckerberg. Although many of them ultimately stopped working together – in both good and bad ways – their team-ups are undoubtedly responsible for the many business successes they had.
The no. 1 way to build an all-star team is working together with a co-founder, like this:
- The co-founders both have different skillsets, such as marketing and development, or engineering and design
- Co-founders generally specialize in their own fields, but do know their fair share about the other’s skillsets too
- Teaming up with a co-founder is initially cheap, because founders rarely pay themselves a salary, but when a company grows in value a bad team-up can be extremely costly
Although many co-founder teams look like they formed out of thin air (or they were childhood friends), it’s not uncommon to try to find a semi-random business partner.
Are you looking for a co-founder? This is what I’d do:
- Create a profile of the ideal co-founder, in terms of expertise and skillset. This helps you figure out what you’re looking for.
- Go to meetups (via Meetup.com) and explain your network that you’re looking for a co-founder. There’s several meetups specifically for business founders.
- Get in touch with your nearest business incubator. Most of them keep a list of their network, and can get you in touch with a potential partner or can point you in the right direction.
When you’ve found a good match, make sure to keep the following points in mind.
- Agreements are often worth the paper they’re (not) written on. Always make an written agreement if you decide to do business with each other.
- A co-founder is not an employee. You can’t go around “hiring” a founder, it doesn’t work that way. Co-founders bring their own ideas to your business, and that’s why they’re invaluable.
- Make sure you set up a good compensation structure. You probably won’t pay yourself at the start of your venture, but you’ll want to plan for the day that you’re making enough to pay yourself and your co-founders. Agreeing on compensation early on saves you trouble in the future.
- Get help from a lawyer or your incubator when you’re dividing the company stock between co-founders. There’s lots of rules involved, and even though your company isn’t worth anything yet, it has “virtual” worth on your tax returns statement.
When you’ve found the perfect co-founder it’s time to go to work. It takes patience and effort to get to know your co-founder, and to work together, so make sure you give yourself and your co-founder the space to do so.
Many teams I’ve talked to over the years weren’t just successful because they were a well-oiled machine together, they were also successful because they were well-oiled machines on their own. You can’t build a castle on quicksand!
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Team up with an established company
When your business idea has an immediate value to the market you’re operating in, and when it’s crystalized enough to be developed in a short timeframe, it may make sense to team up with an established company.
Let’s say you’re building a fitness app to track workouts. You need $ 15.000 in investments before you can spend the time to actually build it. You either build it yourself and need the investment to acquire customers, or you’ll use the cash to hire an offshore team.
If you can get in touch with one or more fitness gyms, you could pitch them on the following deal:
- The gym fronts you the cash to build your app idea
- In return, they get a say in what the app does and what it looks like
- The gym also gets the right to use the app for a limited period of time without any associated cost
This of course only makes sense if it fits your business idea and model. Generally, a partnership like this works well for Software-as-a-Service businesses in which the app performs a defined service for a defined price.
Technically, the business you choose to partner with becomes an investor in your business without getting equity for it. They pay up-front for limited use of the product, and in return for the risk of doing business they get a say in the end product. For them it’s the ultimate opportunity to create an app they want to use themselves, and have a say in what the app does.
It’s not uncommon to share part of the revenues with the partnering company. This especially makes a lot of sense if the company you’re partnering with has the capacity to bring in more customers for your joint venture.
Let’s say I choose to build that fitness app with a local gym. The gym gets to use my app for free for 2 years and we negotiate a deal in which they can offer the app as an extra service to their customers, with a maximum of 1.000 users in total. The local gym also gets 20% of total profit the app brings in, for 2 years.
Moreover, their network includes many of the gyms in neighbouring cities. My agreement with them says that they’ll introduce me in their network of gyms, and use their good name to vouch for our joint business. Most likely, this will result in lucrative deals with these new gyms.
Ultimately, we part ways after 2 years. At the start of the venture we agreed that they would pay me a fixed fee for the 1.000 “free” users. As a result, I end up with the app, the customers they brought in via their network, and a fixed fee for the initial users they brought in.
Most likely you’ll renegotiate a new deal by the end of the first 2 years. You can create a new app, or expand your networks. If the business you did was good, your joint venture partner will no doubt continue to work with you.
Join a Startup Weekend
Perhaps the most well-known of partnerships, and their results, is the famous “Startup Weekend” concept. It exists in many ways, and in different names, but the activity is the same:
- You join an event for a weekend, or 54 hours
- Many more people join: developers, designers, marketers, etcetera
- A few people get the chance to pitch their business idea to the entire group, after which everybody decides to join a team
- During the weekend the teams try to create a Minimum Viable Product (MVP) of their business idea
During the weekend all impromptu-startups compete with each other for the greatest business success. Startup Weekends often include prizes for the best design, the best business idea, and the best implementation. Although the prize money is great, people often join a Startup Weekend for the fun and excitement of creating a business.
The ultimate result of a Startup Weekend is of course the creation, and validation, of a potentially awesome business idea. I know several coders who’ve joined Startup Weekends in return for a small percentage in equity if the business takes off, regardless of their future involvement in the business. You could say it’s a poor man’s investment strategy!
When you join a Startup Weekend, keep this in mind:
- It’s a lot of fun, but you have to be cut out for this kind of work. If you’re used to delivering features and products months after they’ve been asked for by management or your clients, you can expect to have some “growing pains” when you enter the world of whirlwind startup ideas.
- You’ll learn a ton! Even if you’re a beginner coder, expect to learn a great deal about coding and delivering results fast. You’ll also learn to make choices, because no one has time for the best database system or Swift library during a Startup Weekend.
- Startup Weekends are a great way to expand your network of friends and business associates, and it’s worthwhile to develop such relationships in your professional life.
- Don’t join a Startup Weekend just for “sharking”. Many organisations have strict policies for entering the contest just to fish for ideas or equity, and not giving much in return. It’s OK when a partnership and business relationship naturally forms, but it’s not OK when you intentionally join to steal an idea or to skim off equity just for the sake of getting ownership.
Check out the official website of Startup Weekend or check your local incubator and startups for upcoming events. Many of them aren’t called “Startup Weekend”, but follow the same principle, so keep that in mind when you search. You can always host your own 54-hour event, of course, too!
Deciding which partnership type is the best for you is only something you can do, of course. It depends on multiple factors, such as your business model, your ideas, your own expertise and your willingness to give up value and carry risk.
A few pointers:
- Is this your first app idea? See if you can first develop part of the idea on your own, and then look for a co-founder who complements your skillset.
- Are you a developer, or do you have the capacity to build, and is your idea semi-SaaS, and are you in need of capital and/or a network? Choose the joint venture option.
- Are you starting out as a developer, designer, marketer or are you already a bit more experienced and looking for a great experience with like-minded startup people? Sign up for a Startup Weekend!
Regardless of which option you choose, you can’t conquer the world on your own. When you work together with people you won’t only create a better, more profitable business, but you’ll get to work through the challenges and celebrate your successes with other people. And without a doubt, that’s one of the most valuable things in entrepreneurship!
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