You’ve identified a market niche. You’ve got a great product or service in mind that you’re certain will be the first to solve the consumer problem in question. You’re almost ready to finally start your business.
But what if you could be better prepared?
While it is not imperative that an SME or startup be founded by multiple individuals, it certainly boosts your chances of success if you do. Some of the most successful companies today, like Google, Microsoft, PayPal and even local champions like Careem and Anghami, were all founded by two or more entrepreneurs.
Here are 5 reasons why you should look for a co-founder.
1. Skillset diversity
While you might be brilliant with the technical side of your proposed business, such as web development or engineering, you might lack the necessary financial management skills needed to optimize your business model and make it profitable.
In that case, finding a co-founder with the missing skill set would help balance the talent behind the company, which is crucial in its formative years.
According to company insights firm Crunchbase, “Many founders make the mistake of finding a co-founder who is exactly like them, rather than finding someone with complementary skills. Ideally, startups should mix skill sets.”
2. Complementary personalities
Just like solo founders should look for partners with the missing skill set that covers their weaknesses, they should also apply the same mentality to the personality types of potential candidates.
In many ways, starting a business is similar to picking a spouse. A potential co-founder should not only have a complementary personality that is compatible with your temperament and approach to running a business, but it also helps if they’re quite different from you. If you’re an introverted, no-nonsense person, find someone more extroverted who would be more suited to handling the pitching to investors, appearing in promotional material, or media interviews, for example.
“The point is not that oil should seek water or that opposites must attract,” Michael Fertik writes for the Harvard Business Review. “The point is instead to find someone who will fill in the gaps around your personality strengths so that employees, partners, and investors will see and benefit from the balance. You’ll discover that different people will cotton to each of you, and that pattern will have more to do with the third parties’ personalities than anything else.”
3. Expanded network
Sure, you might boast a pretty expansive network of contacts, which you are certain will be instrumental in your company’s formative years. What if you boasted two?
If you listened to our earlier advice and onboarded a partner with a different skill set, personality and background to you, more often than not, they will come with their own set of contacts in fields, markets and circles you didn’t previously have access to, increasing your chances at finding potential investors, team members, and customers.
4. Better chances at securing funding
Co-founders not only bring with them potential access to new investors, they also increase your chances of securing funding.
It is a known fact in the business world that companies with more than one founder are more likely to find willing investors than companies run by a solo entrepreneur. While there has been some research that disputes the reasoning that a solo entrepreneur is less likely to lead a successful business, the prevailing consensus among investors however remains biased towards businesses with multiple co-founders at the helm.
For the most part, investors feel safer placing their money with a company that has leaders with different mindsets, expertise and experience. Therefore, it’s another benefit of getting a co-founder on board.
5. Streamlined decision making and aligned values
While it is generally advised against partnering up with relatives, friends or spouses, it does however pay off to find a business partner whom you’ve worked with before in a professional capacity.
Having an established working relationship can be a great boon throughout your entrepreneurial journey, as you will likely already be quite familiar with each other’s working habits and ethics, as well skillsets and mindsets. This will likely boost your setting up efforts, and streamline future decisions that will shape the future of your company.
Trust is a key factor in any relationship, and already sharing it with your prospective business partner-to-be will do wonders for your company.
Stay tuned for our next article, where we explore the ways in which you can find a potential co-founder.