Founder team: Co-founder or employee? – Starting your own business #3
Founder team: Co-founder or employee? If you want to start your first company or write your first business plan, you have to consider a lot. Starting with the founding team, through the idea to the product, price, distribution channels, financing, personnel and much more. An overview of all topics. What is really essential and what needs to be considered?
Team of founders: persons, knowledge and qualification
The founders always make the start. Who wants to start a business? What knowledge and qualifications do you have to carry out projects yourself? Is it digital know-how that can help you to get ahead, e.g. in marketing through modern distribution channels such as social advertising or funnel marketing? Are you the programmer who can handle large amounts of data and knows how to bring them into new forms, keyword Big Data? Data trading is extremely lucrative because it can be quickly scaled, and more on that later. Are you the sales representative from the food industry who, with 10 years of professional experience, brings his own product to market with his own network?
Special knowledge and skills are therefore always a strategic and operational advantage for founders. At the same time, however, our strengths always result in weaknesses and deficits. Those who are good at development, for example, have a less exuberant, over-social nature, which you in turn often need in sales and distribution, also in customer service. In contrast, the sales representative has the perfect conditions to sell the product, but has no knowledge of digital accounting, e-commerce, design with Photoshop and Illustrator. Accordingly, you need good staff, good employees.
Employee or co-founder?
This raises one of the first big questions that will constantly accompany you as an entrepreneur. Who’s doing the job? There are always special tasks that cannot be done by yourself. That’s why you naturally call the electrician for the lamp, the painter to paint, the developer for the software, the cleaning service for clean offices or you hire external sales structures such as call centres. The possibilities of outsourcing are gigantic.
Employees save time
Giving jobs to employees and freelancers saves you time. Time is your most precious commodity. You can always make more money but never more time. Co-founders in a company, on the other hand, always bring with them risk potential. The common ground, must know exactly that the cooperation will work very well and that both founders complement each other in their skills and knowledge. Are two people working just as intensively on the project? In very few cases both founders reach 100%. A person will always feel disadvantaged. The bigger the turnover, the bigger the problems caused by this difference will be.
Co-founders cost time – under circumstances
Especially if founder 1, founder 2 wants to take shares. Even if it would be fair because person 1 works or has worked a full 70 hours a week and person 2 maybe only 20 hours a week. Founder 1 does not go on holiday for three years, Founder 2 already flies twice in the first year to the south. If the cooperation has been decided on at the same level, disagreements quickly arise between the founders. Start your startup with a co-founder only if you know 100% that he or she will deliver the performance you expect from him or her. As a rule, you should rather rely on motivated employees!
Then you always own 100%.
In summary, the following can be said about the founder or founding team: Personal strengths are the basis. Unconditional faith and perseverance, at the same time realism and yes also a little “megalomania” and naivety. It is a fine line between businessman or businesswoman and dreamer, many stay with dreaming and forget the realist. Especially in times when business is going extremely well, you must always remember that tomorrow can be different again. Goals must be as big as possible, but steps as realistic and small as necessary. The knowledge about yourself, your very own strengths but also your deficits and the answer to the question (employee) are extremely important.
Therefore we now come to the analysis of your strengths, weaknesses and the following compensation.
Type analysis for strengths, deficits, and compensation
In your analysis all knowledge, skills, i.e. all strengths but also all deficits and risks should be considered. Once the business is up and running, there is little time to make new strategic decisions. Operational measures without strategic guidelines are not very effective. Especially when the “machine” is running once.
Strengths should definitely be used. As mentioned before, it can be the very long professional experience in sales, as well as knowledge in software development. Your abilities are your capital. Your own yoga studio, the yoga online video course, the cook with his own online shop or the hobby car tuner who becomes a Youtube star. From classic business ideas, as well as the yoga studio that is needed in every district, to new concepts such as video marketing, cross-location. The personal abilities should always be used and therefore should be emphasized in an analysis.
- Where are your advantages?
- Where are you ahead of the others?
- In which areas do you develop more ambition than others?
In particular, further development remains a constant topic. That’s why I like to compare it with the football field, the simple and aimless football matches between friends and boys. If you played football as a little boy, it will not sound like work to you later on to become a football manager. Although you sometimes have to go through 16 or 18 hours, it feels like a good game but not like work. What you do, you do gladly. That’s why passion is so important for your entrepreneurial success. Ask yourself: In what area do I develop ambition, more than anyone else?
To be is everything: Entrepreneur Rule
A simple and at the same time elementary rule, which I got to know myself, is: Stay on the ball. Being there / staying there is everything! Those who give up too early – self-doubt will come to you every month – have already lost, although the time may not have been ripe yet. Another year or two and the big breakthrough would have come. The one big customer who has an absolutely innovative extension, the sudden hype by the press, a prominent person talking about your business idea, countless possibilities that can make a business profitable overnight, even if you were doubtful before.
You are independent, self-sufficient and constantly
Tip! Keep deleting the word “man” from your vocabulary in your mind. Very often one tends to say to everything, “one could have done better”, “one could have structured it better”. We always project our behaviour onto the general public. That may be true, but in the entrepreneurial sense there is no generality but you as the decision maker. “I could have done better,” “I could have structured it better.” This little thought game always reminds you that you are responsible. Back to the thought, being there is everything, just stay on the ball. If you continue to work on the project, you will also continuously build up new customers, new sales channels and, accordingly, without additional turnover, which will put you in the black at some point. More sales, more employees, twice as many sales, even more employees, four times as many sales. Suddenly the curve rises very quickly, ideally exponentially. Since the curve for most companies rises slightly exponentially, the withdrawal must never take place too early. Perseverance, ambition and belief in oneself, as kitschy as it sounds, is the foundation for everything else.
Now that that’s settled, we can get down to the business idea. Next to the founder, the second pillar in the business.