In the early days of building his mental health app Kalda, Daniel Botcherby and his team were under a lot of pressure to meet milestones, with minimal funding — and then, one day, one of his cofounders “just exploded on us”.
“It really rattled us. Up until that point, we had been an incredible team and got along great,” Botcherby tells Sifted. The founding team decided to take on marriage counselling to repair things, which worked for a while — but, nine months later, the cofounder stepped down after repeated breakdowns in the working relationship.
“[We] were obviously really affected by it, but we knew it was the right decision. What we really said to ourselves was how are we going to get through this? We came into the business with complimentary skills, so what is the skill that we've lost?” he says.
Botcherby and his cofounders aren’t the only ones to treat the leadership relationship like a marriage — and when it comes to the chances of success, you’re better off actually tying the knot. While 42% of marriages in the UK and 45% in the US end in divorce, 65% of startups fail because of conflicts within the founding team.
So, how can cofounders know when their relationship is cooked, and what's the best way to cut things off without sacrificing the startup?
The founder/friend conundrum
Botcherby met his cofounders on the first few days of accelerator programme Antler — but not everyone finds their business partner so easily. For Bobby Abdullah, cofounder of fintech Lobster Money, it was third time lucky: he’s broken up with two cofounders in the past year.
The first, which happened in the early ideation stage of the company, was a friendly separation, he says: “I realised I was lifting a lot of the weight of the day-to-day, so we ended it calmly and kept a relationship.” But the second was less amicable, as he discovered they had “misrepresented themselves to me” and weren't up to the job.
Now, he’s found someone who “aligns on a personal level” — and this connection is a vital one, he says. “They were all very talented, gifted, hardworking individuals, but what matters a lot is also the personal side and I didn't spend enough time with them to really get to know them.”
“This person's going to stick by you for the next 10, 20, 30 years, potentially, and you want to be able to be as confident in them taking decisions as they are confident in you. it doesn't have to be a friendship, it could just be a very deep understanding."
For Johannes Roggendorf, founder and CEO of healthcare jobs platform Medwing, the cofounder he chose six months into the company being launched was initially a great fit. But as the startup grew, they found that internal communications became confused, as both cofounders had equal decision making power and disagreed on ways to run the company.
“It worked for a certain period of time, but I think in the end, especially if they're really like hard decisions to make, it's just better to have one person deciding,” he says.
Roggendorf explains that he and his cofounder had worked together in previous jobs, and he says this was a vital element of choosing them. “You enter a very strong relationship that needs to last over a certain period of time. I would really recommend that if you want to do this with friends, that you at least have worked together at some point already.”
While knowing someone well is a testament to their character, seeing someone in a work context offers crucial insight in how they would cope with the pressure of company building, he argues
“I do have friends where I could imagine working with them together as a cofounder, but I also have friends who I would never, ever start a company with, though they are very good friends of mine,” says Roggendorf. “If you have worked with someone, you know how they approach things, how they prioritise, how they work, what is important for them in the culture, how they’d run a company.”
Biting the bullet
For both Roggendorf and Abdullah, one of the main lessons they’ve taken away from their cofounder breakups is that it’s best to rip the plaster off quickly when things go south in a relationship.
“I think we should have done it earlier. We waited a little bit too long to take this decision,” says Roggendorf. “It’s not an easy way to go [but] it should always be the main objective to put personal egos apart and find the best solution for the company.”
For Abdullah, it’s also about trying to not leave space for resentment to build up.
“I think if someone ever wanted to have that conversation with me — and I've had that conversation happen with previous projects — I'd rather that be brutally honest upfront so if there is something to tackle, change or even just break it off there nicely, that could be done versus building resentment.”
Allowing discontent to build can often have worse consequences than having a difficult conversation, he adds. “That is one thing I've learned: don't build resentment. That breaks teams and eventually it's going to be the last straw, so you would rather be very honest with each other [instead].”
And while Kalda’s cofounder split was initially unpleasant and distressing for the team, Botcherby has found that it was the best thing for the company in the long run.
“Because of these ups and downs and the learnings and the insight, [we had the] honesty to take a look at the business and be able to ask, ‘What do we want to build? How do we fill the gaps?’ The reason things have worked out is because I’m a product of all of those experiences.”