Jay Barnett is the founder of Priority Pickup, an Australia based online passenger services company that offers private chauffeur rentals to customers in Perth, Western Australia.
One of the most frequently asked questions when I go to startup events here in Perth is why I do not have a co-founder for my business. At the outset, having a business partner makes perfect sense. I am not a technology guy myself. My primary role in business is to sign up new contractors and in ensuring that my customers are happy.
I would be lying if I told you that the thought of having a co-founder who can take care of all the technology or marketing tasks has never crossed my mind.
So why haven’t I explored my network for someone who could join me as a co-founder? Here are some reasons why:
Partnership is based on trust
This is pretty obvious. You cannot have someone you barely know as a co-founder simply because they are the best developer or marketing person you know.
Any partnership needs to be based on trust. Having said that, I have always believed that friendship and money do not mix. It was a huge burden in the beginning as I had to multi-task and coordinate on several aspects, but this has paid off in the long run.
No matter how good your pre-nups are with your co-founder, there is a good chance you might disagree with them on something or the other. Some people can manage this well together, but if you’re not the type, this is a headache that you must avoid if you can.
It makes business sense
So why exactly are you in business? A passion for your work or a mission to create a difference can be true in a lot of cases, but making money is definitely a factor for most successful businesses.
Be honest with yourself. If that is the case, owning the company yourself earns you the most money. Every partner you add to your business results in your own share holding in the company drop. Think about this carefully before adding another partner.
Contracting is cheaper
I have a pretty good working relationship with my developer and marketing team. But I’ve not met them even once. All of our work gets done online and through emails.
Contracting is cheaper since it costs me just a few hundred dollars every month to have them on a retainer basis. Even if I continue with this model for the next five years, it will still be cheaper than having a co-founder who would not only claim a higher pay, but would also enjoy a huge chunk of share-holding.
Co-founders aren’t required all the time
In my business, there are not enough things to keep a technical co-founder busy. Yes, things were pretty chaotic in the initial days. But now, once the technology is in place, we do not have enough tasks to keep working on.
If I had partnered with a technical co-founder, they might find themselves irrelevant at this point in time. Such a scenario is true for a lot of businesses where most of everyday tasks are low-level in nature that can easily be outsourced.
This does not mean you shouldn’t have a tech-savvy co-founder, but you should only have a one when you know both of you would have something to keep working on all the time. A bootstrapped startup may not always be the right place to have people with limited skills and not enough work to do.
Founding a startup independently has worked for me, but it’s clear that not all businesses can afford this luxury. The above may not be applicable to all businesses. But given a choice between owning a business with a co-founder and owning another without one, I would still go for one that gives me complete control.
Truly, it will depend on your business; but if people are telling you that you must have a co-founder for your business, think twice about what you are looking to accomplish before giving away control.
What are your thoughts? Let’s discusss in the comments below.