Why Co-Founders Scale at Different Speeds?
I often talk about the challenges of scaling a business. Yet, a key challenge or impediment is founders’ ability to scale their own leadership skills.
In the case of co-founders, one may scale faster while the other doesn’t keep pace with the speed of business growth.
This can be a source of conflict and frustration. And conflict among co-founders can destroy the business.
Noam Wasserman, author of The Founder’s Dilemma, found that 65% of high potential startups fail due to interpersonal tensions. Further, Initialized Capital, an early-stage VC firm with more than 200 active companies in its portfolio, found that 20% of co-founders depart, and the number one reason, at 30%, is a co-founder’s skills not scaling fast enough.
The Tortoise and the Hare
Why might one co-founder fall behind?
For starters, often one founder will take on the role of CEO. The other may focus on a specific functional role, for example, if he or she is the technical co-founder, the visionary, a killer salesperson, or marketing guru.
Being a first-time CEO is a steep learning curve. As CEO you are involved in every major decision, the last stop for every complex problem, at the center of every important transaction and business relationship. All the strategic information ultimately flows to you (well, if you get your systems and culture right!)
The Resulting “Rivalry”
Once it appears that your co-founder is not growing into a leadership role, not keeping up with the pace of business development and the accelerating needs of the business and team, there can be a breakdown of trust.
You may start to box them out of important meetings, make important decisions without them, or hoard important information.
When they feel like they are losing control, they may start to micromanage their team, interfere in their work, or second-guess their decisions. This will piss people off, particularly, your experienced senior talent. They may start coming to you complaining or threatening to leave because they just can’t work like this. In your attempt to smooth things over, however well-intentioned, it may make things worse if your co-founder feels like you are usurping their power.
That power struggle is a killer. Esther Perel, a renowned relationship psychologist, identified 3 major sources of conflict that dismantle co-founder relationships. One of which is power and control.
Work it Out
Carve out space for each of you. Together, define your roles and responsibilities, determine what decisions will be made together and how they will be made, and seek to understand each other’s leadership strengths and styles.
Where does your co-founder add the most value? What is their superpower? And, what do they want to do? I find all founders fail to ask themselves that question.
Are they more of an individual superstar? So often, the superstar is promoted to level of failure. Maybe they are better suited to lead a small team on a new initiative or special project.
Maybe they make a great spokesperson or are the face of the brand. Perhaps, they are best suited for business development efforts rather than a functional role. Maybe they are the designated firefighter jumping in where needed.
Finally, as you scale and grow, everyone’s personal ambitions and priorities may change. Maybe they want to move on to their next venture. Maybe the true value they bring is in the trust and magic you have created since the beginning, serving as your sounding board and safe space.
Addressing these dynamic shifts before they become full-blown conflicts requires honest, empathic communication and self-evaluation. Beware when you start asking yourself “what the heck does he/she actually do?” or “why am I doing all the work?” or “damn, is this person crazy?”