Why Co-Founders Break Up (And How to Prevent It)

So how do we contain conflict? One thing that I often see is one, those initial expectations, agreements, like we were talking about before, values alignment, it's not made as explicit or concrete as it should be. But the thing that, that becomes so important, especially as you start entering that hypergrowth, is revisiting and revising those agreements. Is there's unspoken agreements and expectations that take place very early on where we assume various aspects of how the other party will, will behave because the relationship that got us 0 to 1 is not the type of relationship that's gonna get us 1 to N. 1 to N is gonna require a fundamentally different way of relating. And so how can we embrace that and do so intentionally?

Welcome to the Startup CEO Show. I'm your host, Mark MacLeod. In this episode, I speak with Matt Jones, who's a psychologist and coach specializing in co-founder relationships. This is the first time I've had a fellow coach on the podcast, and I was really fascinated by this conversation. You know, basically 100%. Of companies have co-founder conflict along the way. Matt shared an interesting stat where two-thirds of startup failure is actually kind of at the root cause due to co-founder conflict. So this is his specialty. We went super deep into it. He left some very practical, actionable tips, and he's written a book as well called The Co-Founder Effect for people who want to go deeper on this topic. I really hope you enjoy the episode, and I hope you subscribe for future episodes. Matt, welcome to the Startup CEO Show. It's a true pleasure to have you here. How you doing today? Thanks, Mark.

Doing pretty well. I'm excited to talk about all things co-founder related.

Yeah.

Yeah.

So this is, this is a first, right? As you probably know, normally I have CEOs on the podcast. The term Startup CEO Show might've given that away, but this is the first time I'm talking to a fellow coach. And I think this will be really fascinating. For folks that don't know you, maybe just give some background on yourself. Sure.

So I'm a licensed psychologist, but for the last 6 years I focused exclusively on working with startup co-founding teams. And so kind of found my way to doing this. I was in graduate school while 2 of my closest friends started a company together. I watched them scale it to a multimillion-dollar success externally. But, you know, as you and all the CEOs listening know, internally it was a very different story. And they came to me kind of sharing a little bit of their frustration with one another. And since I knew them both so well, I said, look guys, the problem is not internal. It's interpersonal. It's not that one of you is right and the other's wrong. We actually just need to have a group conversation about what's happening. And as we were able to lean into that process, they found it really valuable and said, Matt, you not only saved our business, you saved our friendship. And so that's whenever I was instantly hooked into, to trying to help startup, uh, founders navigate tension.

I love that. It's funny, I often joke that, um, you know, coaching's not therapy, but it's not unrelated. And I usually bring that up in the context of like, hey, as you're choosing a coach and as a coach is choosing you, the fit's gotta be there because you're gonna share shit that you maybe don't even share with your spouse and don't share with your co-founder. But you're actually coming from a therapy background as well, which is fascinating and hugely relevant.

Yeah, 100%.

And so your specialty is, is on working with co-founders exclusively.

That's right. Yeah. Yeah.

Cool. So let's maybe set the stage, you know, have anecdotal evidence that many, if not most co-founder relationships break down, but I don't know. Do you have any stats on this? Can you kind of set a picture for folks? Give some folks some context here.

Well, I think the, the most common statistic that's cited comes from Noam Wasserman's work in The Founder's Dilemmas. And part of what, what he does, and I'll just actually give you the full context, 'cause most people don't know this. They, they know the, the stat all about that I'll just say now, which is 65% of high potential startups fail due to co-founder conflict. That's the stat that's, that's most attributed to Noam Wasserman. But actually, as you look into the book, if you read it, and it is a little bit dry and academic, uh, but if you do read it, it, it comes from a 1989 study that was done. Where it was kind of a survey where it asked a whole bunch of investors their perception of what caused failure among teams. And it was in fact the team dynamics themselves that contributed most often. And the reason I raise this is one, I think that the landscape has changed dramatically between 1989 to present. Two, a lot of the, uh, you know, other modes of failure that we can look kind of objectively and say, oh, they didn't achieve product market fit or whatever the case may be, they run out of money. I think there's a world in which those are simultaneously true and valid. And the, the part of the reason why could have to do with some of the, the founding team dynamics that might not have been, uh, sorted through or, or certainly not aligned optimally.

Right. Yeah. You know, it's funny, I often joke with clients like co-founders, it's like a marriage without the sex, right? At least you have sex in, in a relationship that can get you through the tough times. Um, I don't know if you saw this, but YC did a study some time ago, just trying to isolate, you know, the different factors of success in a company. And the number one predictor of success was how long the co-founders knew each other prior to starting. Wondering if you've seen that pattern show up at all.

I haven't. And part of what's really interesting about it is actually it's, it's, um, related to, but, but a little bit in conflict with Noam Wasserman's research where part of what he found is that companies who are founded by friends or family are more unstable than teams founded by people who didn't have a prior existing social relationship. And the reason is because the people with that prior social relationship are more likely to avoid conflict. Whereas, 'cause for them it's a catch-22, right? If you're giving negative feedback to someone and critiquing their professional performance on one level, you might also be hurting your friend, right? And so there's a fear of, oh gosh, like, you know, these, uh, interwoven dynamics will make things worse. But to your point, I think part of what YC knows quite well is that especially teams founded by people who have worked together previously, whether that's college or actually like a company, whatever the case may be, that actually can be really beneficial because you understand each other's work styles a little bit more. So you don't have to do like a full work trial, like you've already done that. And so then it's really a matter of having some deeper conversations to make sure you're aligned on several other really important factors like degree of sacrifice, desired exit and those types of things as well. Uh, but, but yes, I think that can lead to a lot less initial friction. Uh, but it, it still doesn't mean that we don't need to invest in, in trying to be proactive and preventative. Uh, but it does mean we can hit the ground running.

Right. I thought it might be fun to walk through the whole life cycle, right? You know, where starting with how to choose a co-founder or co-founders and, and then how to scale a relationship once the company's up and running. So let's go to the beginning, right? Um, I'm thinking of starting something. I recognize that being a founder is really difficult. And so I want to have some co-founders to go on the journey with. How do I go about choosing co-founders?

I think, you know, we can, we can talk about this from like an analytical perspective of like, what is the, what are some right reasons, right? Like, uh, making sure we have complementary skills and maybe they have network effects that I don't have access to that could be really beneficial, access to capital. Like there's, there's different strategic lenses to, to view this through. And then there's also just the emotional reality that a lot of people will default to, you know, who they know and who they've relied on and who they have in their peer network. And so I think what I tend to see is far more of the latter than the former.

That makes sense. Interesting. So it's not an explicit checklist of attributes. It's more first degree. I just know these people. It's familiarity, I guess.

I would say it's familiarity. And then, you know, it does depend on the company and circumstances. I think there's also, especially for non-technical founders, there can be a sense of urgency to find that technical perspective. And so almost an urgency of like, oh, you know, you know how to code. Great. Like, let's, let's jump into things together without actually going through all these other, you know, no work trial, no serious questions about, you know, values or company building, you know, et cetera. And so there's a lot of skipping levels, let's say, that I think does ultimately a disservice to co-founders as, you know, the, the project becomes real, uh, the, the financial pressures become real, and then they're, they're ill-equipped to deal with it because they, they jumped in to a long-term— you brought up the marriage metaphor— a long-term committed relationship with somebody that's going to go through a lot of ups and downs without having that foundation in place.

Yeah, 100%. So if I compare that to, I don't know, hiring an executive. I go to hire an executive. I may, first of all, I may or may not engage a search firm, but you know, with or without a search firm, I'm building a pipeline. It's pretty exhaustive. I'm thinking about the attributes of an ideal person, what experience, what background, pedigree, what scale they've seen. I'm reference checking. I'm doing all this shit. Uh, that sounds like I'm doing a fraction of that in choosing the co-founding relationship, which is most important. And then of course I'm sharing the cap table with these really important people as well. So I don't know, do you recommend approach that's maybe a little more like hiring?

I would love that. I, and I, and I think the, the challenge is of course, um, because you're, you're so early, it feels like there's a, a different level of urgency to create the idea and to make it real. And so again, that's where that kind of scarcity of like, oh, first person who comes by who has that complementary skill that I need. Let me just, you know, jump in and let's do this thing together. Um, and so you do have to fight that impulse. And I, and I do feel for other, other founders I've seen too, where it's like they've been looking for years and they haven't been able to find the right co-founder. And so I think there, there's a reality to, uh, some of the challenges in place, but in an ideal world, yes, of course, being more conscious and deliberate, uh, and intentional with who you're selecting, I think could be a, a lot better for the individuals and for the relationship and for the company.

Right. Yeah, for sure. My last operating gig was for this company called FreshBooks. And Mike, who was the CEO at the time, co-founder and CEO, would always tell me, it's funny, I'm older than him, but it was almost like this fatherly, like, hey son, let me tell you this advice thing. You know, it was like, there's two things you need to succeed in business and life, alignment and shared values. You know, if you can, if you have that, that's the foundation, you can figure anything else out. And so like, alignment, you know, in the case of context of choosing co-founders, if I want to ring the bell on the NASDAQ and you want to build a lifestyle business, we're not aligned. You know, values, you know, if I, you know, yeah, it's just how I make decisions, right? We have to think that through. Ideally, we're not the same. We're not carbon copies of each other. Um, but, uh, but there should be some overlap, right? We should value similar things. So I'm wondering to what extent alignment and values show up in, in your work.

I think it's a, it's a great, uh, kind of tool to think about co-founding teams. And so in terms of alignment, I think you need to be really aligned on degrees of sacrifice, like how much time, energy, effort you're willing to put in. Uh, and, and by the way, what everything I'm about to say also can change as you continue scaling. And so that's where we need to have some flexibility to revisit these initial agreements. Um, but, but yes. Degrees of sacrifice, desired outcomes, uh, you know, like, do we, do we care about trying to have a lot of control over our business and ourselves and our time? Or do we, do we want to play the venture game and swing for the fences and have this massive wealth opportunity? And I think being clear about all that ahead of time is really important. In terms of the shared values too, this is one that I think is very interesting. In the book, I talk a lot about conflicting values because there's different— we all have different, uh, kind of personality traits and styles, ways of making decisions, ways of thinking through problems, uh, and it's not necessarily that there's one inherent good way or bad way, but I think what's really important is that in these areas of difference and misalignment, we're really clear about, uh, you know, how we solve that or how we manage that. Because like one difference between like a marriage and a co-founding partnership is, you know, with a co-founding team, a decision has to be made. We can't just punt it forever. Like there's something that we must decide on about the product and the direction or whatever the case may be that actually then, uh, matters quite a bit. And so how we make that decision therefore, uh, matters a lot to both individuals involved. And so what I really care about is not saying let's, let's only default to, to Matt because he's, he's really quick and iterative as opposed to being like more deliberate. Um, But instead, in these areas of difference, let's, let's create the scenario so that we're really clear about when we default to one person or the other, so that when we disagree, we can do so with integrity and commitment, but we're not building resentment or internalizing those issues. Uh, and so those are some of the things that come to mind.

So it's coming up with some kind of framework for how we make decisions and which ones we agree on versus which ones we just disagree and commit on to that kind of thing.

Yeah, and so, I mean, just to use that as an example, you can talk about, you know, kind of open door or what was it, one-way door or two-way door types of conversations and decisions. And you might have a protocol that says, okay, look, for two-way decisions that are easily reversible, we can default to the person who has domain ownership or domain expertise. However, if we're talking about something that is existential to the company that we cannot easily reverse, then we actually either need consensus or we need to at least have a, a longer-term deliberation to make sure that all voices feel heard before we proceed with that. And so I think just being really clear about those types of protocols can, can be really helpful.

So maybe let's move on to scaling, 'cause it sounds like people are going based on familiarity, convenience, speed, perceived need. They don't think I can run an exhaustive search, so let's assume they're making suboptimal co-founder choices. So now we're into scaling. Uh, you know, I'm guessing, um, you know, you don't call a therapist when everything's right in your marriage. So, um, I'm guessing people call you when shit's going down. So I don't know, maybe, uh, I don't know, just give us, just give us some patterns you see for when things start to go awry. This could probably be an entire episode in and of itself, but yeah, just curious what you're seeing.

It certainly could be. I think, let me back up just for a second, because I do think that this is an interesting meta point that's worth naming. Part of what's so cool about co-founder coaching as a category of services, because a lot of people don't know that this is something that exists. And, uh, and, and I think that that's understandable because it's been underserved as like a unit. Like we have a lot of individual coaches who work with like CEOs, whatever the case may be. There's also some who might specialize in team and kind of offsites or whatever that looks like. But actually focusing on this unit, I think is the most important relationship in business. And if we get it right, there's kind of this multiplier effect where it buffers us from those ups and downs of the entrepreneurial journey and make sure that we are in lockstep as we're scaling. And so there's this sense of momentum and, you know, we're all rowing the same direction with the same cadence. And on the flip side, wherever we get it wrong, then we're staying up at night replaying an argument with our co-founder instead of thinking about the product. And then, and it can get a lot worse. That's just like a low, a low-grade frustration, but this can really multiply and be an existential threat to the company. And so I bring all of that up because whenever I started this work 6 years ago, I only found like 5 other coaches internationally doing this work, specializing in it. Now there's 30, uh, as of 2025. And so I'm seeing this growth, uh, which I think to me is very exciting. Um, but you know, some of the, the signs and symptoms, uh, that I see, uh, because people do come to me disproportionately whenever there's a conflict already existing. There are other coaches who specialize in like, you know, getting things set up before there's a conflict, which is incredible work too. Um, but the things that I see are recurring disagreements. So the types of conversations where let's say we're arguing about product roadmap or some kind of, uh, you know, decision, but regardless of what that content is, uh, we're stuck on it. We keep finding ourselves going in the same loop. We had the same conversation last week, right? And that type of frustration to me often, uh, signals that there's something deeper going on under the surface that we haven't been able to name and address. And if, if only we could actually do that, then all of a sudden the business issue, uh, takes on much less importance and we can make that decision more clear-headed and more effectively.

How similar is this to couples counseling?

There's a lot of similarities in that, um, some of the different kind of theoretical ways of thinking, uh, apply, and so do some of the tools. So to be really direct, this is part of what I went through in my book was to, to kind of research this this, uh, this very question. And where I've landed is, um, because the co-founder relationship is what I argue an attachment-based relationship, meaning that when you go through hardship with somebody, when you're in this committed relationship for years on end, uh, your— and your identity is tied up in it, you know, your financial livelihood is tied up in it, you inherently want that person that you're partnered with to be reliable, to be responsive, to be available. Uh, and so if you feel like those things are not being met, it's going to trigger this deep fear response of like, oh no, like my livelihood's at stake. You know, this is incredibly, this is unacceptable. Right. And so in that way, all the different patterns that we see playing out in marriages, and I, I can go into more detail here, but like the pursuer and withdrawer dynamic being one of them, all of those kind of relational configurations do show up in the co-founding teams. And so I think there are a lot of areas of, of similarity.

Yeah. Makes a ton of sense to me. And which is why I, I tell folks that it's like a marriage without the sex. Um, and you know, it might be a little bit different now in this post-COVID world where a lot of people are remote. But the other interesting, I guess, comparison between these co-founder relationships and our romantic relationships is we probably spend more time with our co-founders, especially in the, where we were in work, like in an office, right? We spend most of our waking hours working. So again, just really, really important to work on that relationship. A pattern that I've seen over and over again, I'm curious if you've seen it and if you have any thoughts, is where, you know, so you've got a co-founding team, one of whom is the CEO, and of course the others have other roles. And then, you know, I only work with with CEOs of companies that have raised venture capital or private equity. And once you go down that path, like a CEO, whether you like it or not, you're getting a ton of input. You've got VCs on your board, they're introducing you to portfolio companies, you're meeting other CEOs, you're basically being surrounded by smart people all the time. Now, some of them are telling you to go right and some of them are telling you to go to the left. That's a separate topic, but either way, you're getting tons of input. And whereas if you're the CTO co-founder, you're not getting that same level of input. And I find almost universally what happens over time is the CEO, CTO, or whatever, the non-CEO co-founder just struggles to keep up. And I feel like in part it is because they're not getting exposed to that same level of input. I'm wondering if you've seen that and yeah, what your thoughts are.

See it all the time, especially Series A and Series B in particular. Um, and I think it's exactly right that the CEO gets, you know, 10 times the input easily. And I think part of, part of where I see this, and of course, especially within CTO, not to like stereotype, but there's also different, different options there where some people might want to stay more in the IC as opposed to going to, to more of a manager type of role. And so I think that's a transition to, uh, pay a lot of attention to and to know yourself really well about your areas of interest. But I agree that actually to continue scaling as a non-CEO co-founder requires an extra investment in self-growth, uh, in, in kind of getting your own executive coaching and starting that process, you know, sooner rather than later. And I think it requires, uh, seeking out more of those growth opportunities, uh, in such a way that, that's more inherent and natural to the CEO position. And I think without that, uh, it can create a lot of challenges, especially as the organization grows, if that non-CEO co-founder is not getting feedback, I think that's, that's something else that I see as being really important where all of a sudden they kind of get put on this island where, where they're, you know, the CEOs, their people are backchanneling, telling the CEO issues with the CTO as opposed to going direct to the CTO. And I see that as being, it makes this issue that you're pointing out so much worse. And so I think there's also a need organizationally and from the CEO's perspective to always coach people to go back to the source and to not isolate this person.

Yep. Yeah, for sure. So maybe let's talk about the causes of co-founder conflict. I think we've identified a couple. One is, well, probably the biggest one is you don't realize it out of the gate, but you just have the wrong co-founder. Um, not same levels of input or just investment in their growth. What are the other big kind of causal factors here?

Uh, I mean, there's, there's many, and I guess just to back up for a second. Lots of different arguments can take place, various topics like roles and responsibility, equities and compensation, uh, kind of hiring and firing dynamics. Like there's a strategic alignment, like there's all these different buckets of categories that we argue about. But at root, I think, uh, part of what's, what's often happening is that we're speaking different languages where one person is, is arguing about, you know, uh, you were arguing about product roadmap going back to the example, but what's happening under the surface can be things like, uh, power disputes where, where I feel like I ought to have more of a just say in this decision-making process. Could be things like recognition, or not feeling like my contribution is being really valued and appreciated, uh, and so I'm like fighting to, to have that, uh, acknowledged more. It can be things like closeness, where, where I feel like you're micromanaging me, and so I actually want you to like step out of my lane. But we're, you know, we're talking about roles and responsibilities, but what we're not naming is that I actually don't feel like I, I want you, uh, you know, as close, like You know, or whatever the case may be. And so I think a lot of the job as, uh, you know, from my perspective as a coach is getting teams to, to fi— to transition from that operation, what I call operational language to psychological language, to be able to talk about some of the unspoken emotional dynamics. Because if we can do that and unlock it, like I said before, it can make the actual business decision so much easier.

So how do you help folks make that transition?

So I created a system called the Co-Founder Conflict Navigation System, and it walks teams through how to prepare for challenging dialogue and then like the the actual conversation itself and how to structure it, especially if tensions are high, then how to build systems of accountability to help the partnership scale, uh, after those types of conversations. But I, I think really it, it comes down to first, I, I think it's building awareness. Uh, and in particular what I mean is, uh, you know, sometimes I use some, some diagnostics, like I, I have this thing called the Co-Founder Satisfaction Index. It's a measure I created, gives me a high-level snapshot of the strengths and weaknesses of the partnership. And so as I kick off an engagement, I'll share an overview of where they're aligned and misaligned across multiple multiple different domains. That— there's stuff like that that can be helpful. But I think more than anything else is, is pinpointing the moments where, where it's like we're two ships in the night just passing each other. Like, what happened, you know, in that moment? If we can examine it and then discover it together, that exact moment, then we might, uh, have a better hypothesis about those dynamics going on under the surface and how to change them. For some people, by the way, I think this is quite difficult because, you know, whether again, not to stereotype, there's some, there's some personalities that I've seen, very detail and process-oriented, who, uh, kind of care ruthlessly about efficiency but might undervalue some of the touchy-feely stuff that I'm, that I'm getting into. And yet, uh, part of what I've seen over and over again is that if we can build in some level of awareness, uh, to, to these dynamics and stuff, it actually makes the entire process more efficient. And so we're actually creating net inefficiencies by not acknowledging some of these emotional dynamics. And so I think presenting that as an argument and like, you know, meeting people where they're at, uh, and just reorienting people to understand the value of, uh, you know, identifying this work, I think is like kind of step one.

Thinking about the running of the company, right? Like a CEO— I'm both a CEO and a founder— that, let's stay with that example. The CTO is, as you know, a CTO and the founder. And I'm wondering to what extent Like where should they and how should they interact as co-founders versus just as members of the executive team along with other members who are not co-founders? Does that make sense as a question?

It's a fantastic question because part of what you're pointing out is how there ought to be, at least we could say like the team should operate at a co-founder level and have some cross-functional visibility. Think about company-wide objectives and priorities and making sure that you're really aligned on some of those. And those are like co-founder level conversations. Then there's kind of like more of the, the executive level conversations of owning your domains and, and, uh, departments. And then there's kind of, and then sometimes there's also like a friendship level, right? And so there, there could be multiple levels that might at times have, you know, conflicting understandings or, or needs. And so I think part of the complexity of, of the co-founder relationship is being able to be really specific. I, I don't think necessarily I should prescribe and say this is the right way, you know, this is a co-founder level conversation. This is, you know, an executive, this is a friendship, but making sure that there is awareness that there are these different levels and that each one, they, the, the teams themselves are the ones who need to be able to define and say what, what kind of topic of conversation or level of importance, uh, should map into those different areas.

Back when I was a VC, I invested in this company, uh, Unbounce, and they're, they're still around. And, um, there were 6 co-founders. So that was pretty wild. And to be honest, a piece of friction for me investing, like getting my head around like how that's gonna work. But kind of what got me over the hump, other than their traction, which was phenomenal, was how much they invested in the co-founder relationship and how they thought about it is, I mean, you brought up an important word, which is is friendship, right? And so they recognized that was a thing to build on. It was a thing that brought people together in the first place, but then they didn't want to have two classes of management team members, right? Where the co-founders might be perceived as more powerful, having more authority than the non- founder executives, right? And so what they did is they would get together for dinner once a month, and that served two purposes. One, continuing to build the bonds of friendship. The other, it was like, this was the forum to discuss things with our founder, Hatlon. And the way they thought about it, love your feedback, is like, We are the owners of the business. And so it's through that lens as an owner that I am bringing this topic up versus my lens as CXO, right? Like the CXO discussion, that's for our broader leadership team meeting. The owner discussion, like as an example, should we raise more capital? Is now the right time to sell? Um, our overall level of burn. You know, like these kinds of bigger, broader topics versus, I don't know, setting next year's budget or competitive landscape review. You know, those things are more for the team as a whole. Yeah. Wondering what it, it seems, certainly seemed to work for them, but that's, you know, a sample size of one. I'm just curious how you react to that description.

I love and appreciate how you articulated it because to me that was a really clarifying way of of operating because, you know, I, I've had a lot of conflicts where team members are feeling like, um, kind of where they're, where they're feeling like the co-founder piece is missing and they're kind of like, they're not actually stepping out as, as company owners to have that high-level conversation. They're not feeling included in that. And so I think part of this ritual of meeting once a month for, for dinner is a powerful one that, that maps onto broadly what I recommend for, for all teams, regardless of kind of size or scale. And I call these co-founder dates. And the reason I call them that, just for context, it does, there's the obvious marriage parallel here to the Gottman State of the Union meeting. The reason I call them dates is because I was describing this to a team once and they said, Matt, like, sounds like we're like an old couple who like lost the spark and you're trying to get us to date again.

And I'm like, yeah, date night.

Yeah. I'm like, you know, like, yeah, it's not too far off. And so it's basically I talk about these meetings again, kind of having a dual function, and I'm curious to hear your thoughts because it's very much related, maps onto what you're just describing, which is at once I want to be doing something that is, um, kind of not work-related. So for some teams, this is going on a walk, a hike, playing games, playing video games, uh, you know, pickleball. Like, I've kind of seen different versions of what this looks like for the team, but doing something together outside of work And then there's the secondary component is all about meta-communication. So talking about how we're communicating, how we're working together, how we're making decisions as a team. Because my theory is like, much like that kind of adage of not working in the business but on the business. Similarly, I think we need to be working on the partnership and not just reacting within it. And so part of this is— Amen. —asking each other, you know, how are we doing? How are we communicating? And if we can create that space and dialog to think about that and talk about it, it opens up the opportunity to change it. And so that, that's part of what came up as you shared that.

Yeah, no, that makes a ton of sense. You know, as you were describing that, I was like, that kind of meta, you know, working on the relationship to me is something that should be done not just between co-founders, but the exact team at large. Like, you know, if I were to boil down the root of every issue and every opportunity in a company, it's people. And a CEO is only as strong as the people that report to the CEO. That's, that's their leverage. And if I were, I don't know if I had a pie chart of all the topics that I discuss with my clients, by far the number one topic is their leadership team. Who was great, but that is no longer great, who's missing the skills. They may or may not be co-founders, it kind of doesn't matter. So, and there are separate, you know, considerations with co-founders. You know, a thing that I push my clients on is don't treat your co-founder any differently. Like they're subject to the exact same quality bar and the same standards as, as everyone else. And if they're not, you know, your other leaders will see that and it'll be a bit demotivating. So, uh, tough. So anyway, just, just made me think that that kind of meta working on it could, could be applied even more broadly.

I completely agree. And I really appreciate the point too of holding your co-founder to that same standard because I agree that not only is it, is it demotivating, but I mean, that, that sends like such a negative signal because it's immediately undercutting, you know, whatever type of cultural process you're trying to establish. Yeah. So, and that, that just compounds, right? Like if you don't fix your problem before you scale, you'll scale your problem. And so in a situation like this, I often see teams where, you know, there, there could be a reluctance again, especially due to the fear of, of how this might impact their friendship. I also work with teams where they're, you know, related or they're dating or whatever the case may be. And so when there's a fear of kind of giving this difficult feedback and it compounds, and this is just a brief tangent, I call this emotional debt. Because what it, you know, these little moments where there's misalignment and something's not being discussed, it ultimately ends up building the frustration. It acts like a magnet where all these other negative thoughts and feelings come and kind of coagulate is the word that came to mind into, it kind of hardens into resentment. Resentment, and that resentment is, is quite toxic. And so then it'll come out in these, these more intense ways that then kind of actually creates the very problem you were trying to avoid, which is pushing the person further away. I bring all this up because if you're not giving that person feedback, it, it, like we were saying before, it isolates them, it decreases their probability of success to continue scaling, and then yeah, it kind of demotivates everyone else. And so I agree that this actually is, is a massive problem if you're not being proactive in some of these conversations. And so if you're making making exceptions for your co-founder, uh, you're ultimately doing a net disservice to your company. And I see a lot of teams— I work with a team presently where this has been a problem for the last 3 years, uh, and, and, and they're, they're still reluctant as a, as a co-founding team to face it. And yet it's leading to employees burning out, to employees kind of playing this parentified role of intervening, uh, and it's, it's actually toxic and it's contributing to their lack of success. Yeah.

No, makes, makes a ton of sense. I'm curious, you know, you've come at this focus that you have from the psychology background, happened to get connected to some, some co-founders, found this fascinating. Now you're in this startup world and, um, whereas I came at it totally differently. I was in the startup world since the '90s. At this point, it's all I know. I'd be useless outside of that context. And so I'm just curious, like, what are your observations on the startup world? 'Cause I think we do some batshit crazy stuff. Like there aren't other verticals where you just, I don't know, set a few million bucks on fire every month. So it's like, yeah, what are your thoughts about this crazy industry that we're now both in?

There's elements of it that I really love and appreciate that feel aligned with, like, The teams that I love working with are those with, who are led by people who at their root just want to grow. And it's, it's not, it's like, I want to grow personally. I want the business to grow professionally. I want to make an impact on the world. Like just everything is about growth. And so that means doing self-work along the way to make sure that I can fulfill this mission. That's something that I find deeply inspiring and that deeply resonates with the core of my being. There's also like kind of, you know, some, some shadow material here that I think is challenging in the startup space. Of, um, you know, whether that's, uh, kind of avoiding our own relational traumas and wounds and trying to, to kind of get away from them through this, this achievement and grandiosity. There's also like in this space, one thing that I find really frustrating is, you know, just within my work in particular, a lot of teams will give me testimonials but make them anonymous, not because they're not proud of the work, but because they're afraid of sending a negative signal to investors. And so I think again, there's like this, this stigma, like, oh, we're going to say that there's something wrong with us, uh, but by kind of endorsing this work, when in fact I could argue the opposite, uh, not doing something is far more of an issue. Uh, doing something about it is definitely going to improve the likelihood of success. And so I think that there's elements like that where, uh, I think part of my biggest challenge are the ways in which I see some hypocrisy or, or misalignment between supporting founders and saying, yes, we're pro-founder mental health. And then on the other hand, you know, the, the way that some of the, you know, perhaps also from the, the VC, uh, side of things, uh, you know, there's different incentives. And so some of those, uh, are not always in, in complete alignment.

That's fascinating. I'm, I'm, I'm amazed that attitude still exists. Like I bought my first book on coaching in 2002. I was just somehow intuitively drawn to coaching, but concluded I lacked the gray hair or moral authority to be the, be ready as a coach. Uh, as you can see, it's white now, so check. Um, but back then, like, I think there was a stigma to coaching. If someone said, oh, you should get a coach, you're like, oh, what's wrong with me? Right. Uh, or as I, I feel now, it's just like, oh yeah, you're investing in yourself. Like you recognize the stakes, uh, and therefore you're investing in yourself. That's great. And, and probably half of my clients come from VC, so I don't feel like there's stigma there. Now when I think about it at the co-founder level, it's inevitable. Like I bet you if you pulled a VC, they've got co-founder conflict in 100% of their companies. Like you can't, I don't know, double or more every year and not have some friction along the way. So I'm, yeah, I'm just surprised that there would be any resistance at all on either side, you know, like to the notion of co-founders working on that relationship.

Yeah. And, and I'd be curious, I mean, just in transparency, a, as I've talked to a lot of, it, it could be like another way of saying it is internalized fear on the founder's part that may not be based in the reality of the situation. On the other hand, it doesn't make the, the kind of fear or stigma that, that's been internalized less real, uh, kind of on the founder end. And so yeah, it is an interesting setup where I certainly agree that on the individual level, individual coaching does seem to have like green green light, you know, full support. And I still do have questions about the co-founder piece too, because whenever I do have talked to various investors, it seems like a problem that is ubiquitous, that's seen. But again, I don't necessarily see a whole lot of desire to support co-founding teams because it's almost looked at perhaps as a lost cause. Like if the team's not right, then this just means this is not going to work. And you know, this is just, you know, the 6 out of 10 that won't have any return at all.

And so I'll just move on to the next Yeah, there's a lot of pattern recognition going on there, right? For better or worse. You know, one of my companies I was involved with early on, uh, was Shopify. And Shopify is one of the few standout examples of me, for me, where the 3 active co-founders were crushing it in C-level roles at the time of IPO. And, um, I've thought about why that was. It wasn't just that they were smart people. Yes, they were, they were very smart, but they all got coaches early on. Toby, who's still running it, he was the first to get a coach. At one point he had two coaches, but his first coach started coaching some of the other C-level leaders, and then they brought that person on and, and he built out a coaching, uh, department inside Shopify that they call Talent Acceleration. So it's a thing that's separate from HR and it was born outta necessity. You know, at the time they were based in Ottawa, which is a really small town and like there just wasn't talent who had seen their scale, so they had to create it. But you couple that like an investment with an in coaching with like revenue growth. So the thing I tell my CEOs all the time is like you can, you can have all the coaches, all the advisors, you could read all the books, all the blog posts. It's all useful, but the single biggest thing that will grow you as a leader is to unlock revenue growth and hang on for dear life. The biggest recent example of that is Lovable, which went from $0 to $100 million of revenue in 8 months. Now anyone from the outside looking in would say like anyone who can grow that amount of revenue in 8 months is clearly a great leader, but it's chicken and egg. That person now has experience that they didn't have 8 months ago just because they unlock the flywheel and just like hung on, you know, when you're not growing, when you have these really smart people and they're beating the head against the wall and you're not growing, that of course is going to create conflict. Especially when you raise capital, you got these tensions and expectations. Conversely, when you are growing, I don't know, growth just forgives all sins. So yeah, like, yeah, I'm just wondering what your thoughts are on, on, uh, yeah, how growth factors, you know, the growth of a company factors into all of this.

Yeah, it's a fascinating, um, thought because I certainly see a spike in conflict both in low growth and high growth moments. Yeah. And you know, I think there is that, that sense of everything being under a microscope. Everything's, you know, very frustrating whenever it's not working. And on the flip side that, you know, oh my gosh, we're so in over our heads, but we're holding on for dear life on the other. And so both are right for conflict. The piece that I'll bring it back to though is, you know, earlier on we were talking about how to find a co-founder and we mentioned that there's a, there's kind of a convenience factor that goes into that. And one thing that I, that I often see is one, those initial expectations agreements, like we were talking about before, values alignment, it's not made as explicit or concrete as it should be. And so like, just as a brief aside, like in the book I have what I call partnership term sheets where we start to kind of document this very early on so that it's clear for all parties. But the thing that, that becomes so important, especially as you start entering that hypergrowth, is revisiting and revising those agreements, right? Because what, what often, what I often see, another way of talking about this is there's unspoken agreements and expectations that, that take place very early on where we assume various aspects of how the other party will, will behave. And then once the pressure hits the, the, you know, and all the pressure starts going up, then all of a sudden we have these outdated agreements, uh, and expectations that, that are creating a lot of friction. And so what what we actually need to do is sit down, have a set aside time to address some of those things about, again, revisiting the degrees of sacrifice, the desired outcome, and just making sure that we can get realigned and our relationship can evolve into something new because the relationship that got us 0 to 1 is not the type of relationship that's going to get us 1 to N. 1 to N is going to require a fundamentally different way of relating. And so how can we embrace that and do so intentionally? I love it.

So you, you mentioned the book a couple of times. Maybe tell folks about the book.

Sure. So, uh, I, I wrote a book called The Co-Founder Effect: How to Diagnose, Fix, and Scale Healthy Communication for Startup Success. And it is the, the deepest, most robust psychological analysis of the co-founding team dynamic that exists, uh, which is not saying much because there's, there's no, no real books on it. Uh, and so I, I'm excited to, to start doing more of that work and, and trying to bring more awareness to this topic. And so, yeah, it goes into all of these unique dynamics from a psychological perspective and tries to look at their various impacts on the individuals, the organizations, the cultures involved. And it tries to be very tactical in helping teams not only diagnose what's happening, but then find their way out of it to improve their alignment and then ultimately the kind of the culture of the organization. And so. So that's the journey that, that I hope, you know, teams will, will lean into more and more. And then, you know, certainly I hope that there's more, more books and concepts and tools in the works because I think that, like I said, this is the most important business relationship and it's also quite underserved.

Yeah. How epic was it to write a book? I write a few LinkedIn posts here and there, but writing an entire book is a bigger undertaking.

I mean, it felt like I was looking up at Mount Everest every day and just, you know, just slog my way through it at various points. There were some elements where I will say I personally felt a lot of gratitude for it because it connected me with my mission a lot more than just kind of doing other types of sprints. And so doing that deep work was something that I found personally inspiring. And there were certainly moments, especially towards that latter, you know, fourth of it where I was like, okay, I just, I'm done. Like, I'm so done. I just need to get— I heard a really good quote that said, most great works of art and books in particular are not finished as much as abandoned. And that felt really—

yeah, yeah, that resonates for sure. So folks should obviously read the book, but in advance of that, and some of this has come up in our conversation, but I don't know, any suggested best practices that you just want to share with folks today on the conversation?

I'll share two. I think one is what, what we already covered, so I, I won't go into too much detail, but the, the co-founder dates is one that, that is low-hanging fruit. That's a system that you can add in. And for some teams it is once a month, for others it's once a quarter, but whatever that cadence is, I think agreeing to that time and not, uh, just punting it. 'Cause again, I think it's very easy, uh, especially at various moments, uh, in the business to just say, hey, look, this touchy-feely stuff, no big deal. Let's just punt it to the next one. And yet I actually think based on our conversation, it's absolutely essential to maintain alignment. Alignment. So I'd say do those co-founder dates. And again, the main question there is just how are we doing, right? Let's talk about that. The second practice that came to mind as you asked that is contain, like what I call containment. So how do we contain conflict? So to give you an example, I'll say that my fictitious co-founder Mark just interrupted me 3 times in our all-hands meeting. And so I'm at the deepest level, I'm feeling deeply hurt because Mark's also my friend, But, you know, superficially I'm quite frustrated and so I'll just stick with the anger. And so after that call, I might, you know, contact Mark and be like, Mark, like, dude, why don't you care what I have to say? You know, why are you being such a dick? Like, this is ridiculous. Like, why? I can't believe you did that. That's, that's not containing conflict. And what I've learned with teams is if we don't contain the conflict, it contaminates our execution. And so part of what we actually need to do is to, a much healthier way of doing this is for me to hit Mark up and say, hey Mark, listen. I'm having some, some feelings and reactions to, uh, the all-hands meeting. I would love it if we could debug and realign. Uh, I'm looking at the calendars now. Do you think you could meet with me Friday at 2 PM? So what I just did is I contained the conflict. I gave it a time, I gave it a space. Uh, Mark now knows that Matt had some type of reactions to this and he wants to, to process those with me. Uh, and so then that helps us both enter that dialogue with, uh, with more clarity, more intention. Gives me a chance to kind of center myself a little bit. And then I might try to, to stick on my side of the net and say things like, hey Mark, when, when you interrupted me those 3 times, you know, I felt really frustrated because to me it's absolutely essential that you and I are, you know, presenting a united front and that we're in lockstep, uh, to our, to our company. And so are you open to adding another like 5-minute sync before the next one just to make sure that we're aligned before we, we actually kick things off? So now Mark can hear that, he can digest it, he can respond more appropriately, and that makes the entire process of conflict something that is healthy for the organization and for the people involved. And so I think if we can make that shift, uh, then that's what I see the, the most productive teams. It's not that they never have conflict, it's that they've learned to, to have them more effectively. I love it.

Well, people should obviously go read the book, but if they walk away even just implementing those two things, they're gonna have gotten gotten a ton of value from this. I really enjoyed having you on the show, Matt. You know, you've, I think there's lots of coaches out there, but you've picked a pretty interesting specialty. I wanted to have you on because you and I interacted before, but you have that distinct specialty. You've got a TAM that includes, I think, every startup out there because every startup has co-founder issues. So yeah, I think it's fascinating for folks who want to learn more about you. How do they find you?

Sure. You can find me at, uh, co-founderclarity.com. That's my main website. You can find the book there, uh, some additional tools, a, you know, a couple free downloads. Or if you want to look, uh, for the book on Amazon, again, just type in The Co-Founder Effect and it should pop up for you.

Amazing. Thanks for coming on the show, Matt. Really enjoyed it. Hey, thanks for listening to The Startup CEO Show. If you'd like to connect with me, be sure to visit my website at markmcleod.me or follow me on LinkedIn at The Mark MacLeod or Twitter @MarkMacLeod_. And if you want to tune in again next week, be sure to subscribe on YouTube, Spotify, Apple, or wherever you get your podcasts. We'll see you next time.