Co-Founder Mistakes
2022 · Essay
In 2022 I was building a sports betting SaaS. The idea was simple: I'd made about $20k making positive expected value bets, but the sportsbooks make it hard for you to keep doing it, so I figured I'd sell the system as a product. I'd already sold my first company, an e-commerce business I'd grown to seven figures in nine months. I had skills, momentum, and confidence.
It ended up being a three-month project. I don't even know if I'd call the people I brought on co-founders. We quit so early it was barely a company, more like a thing I thought maybe could be a company. We stopped partially because I didn't want to go deeper into the sports betting space, partially because there was so much drama, and partially because I just wanted to be done with it.
But I learned a lot about picking who you work with. I should have created a framework before making decisions like these instead of doing what feels right.
The people you work with have to have these things:
1. Great work ethic. Not "works hard when inspired." Works hard period. Nights, weekends, when it's boring, when it's broken, when nobody is watching. If someone has other priorities that will consistently pull them away from the company, they're a great advisor or employee. Not a co-founder.
2. Logical thinking under stress. Can they think logically when emotions are running high? Startups are a pressure cooker. Every week brings a new crisis. If your co-founder turns every disagreement into an emotional negotiation, you will spend more time managing feelings than building product. You can't afford that.
3. Complementary skills. This one gets talked about the most but matters the least if the first two aren't there. Having a technical co-founder is worthless if they can't ship under pressure. Having a sales co-founder is worthless if they can't think clearly about tradeoffs.
4. Passionate about the mission. Not required, but it helps. Passion carries people through the months where nothing is working and the numbers look terrible.
Beyond the framework, there's a question I should have asked myself: How would I feel about this agreement in six months or a year? Would I still be happy about it? What things pop up in your head that make you hesitate to say yes? If something makes you hesitate, pay attention to it.
I'd rather build alone for six more months than spend two years unwinding a bad partnership. The situation slowed everything down. Startups are messy and I got in bed with the wrong people.
Hire and partner with people that fill your weaknesses but never hire or partner with someone that has vastly different values.
One more thing I realized through all of this: finding undiscovered talent is extremely valuable. In other industries you can find 10-20x return people. In tech, you can find 1000x return people. But you need to know what you're looking for, and that starts with the framework.