Co-Founder Networking: How to Find a Business Partner (June 2021)
In this talk, Royston G. King shares practical guidance on selecting, evaluating, and structuring co‑founder relationships. He begins by contrasting his own partnership with Adeo Ressi, emphasizing that while co‑founders can have very different personalities and skill sets, their working styles and problem‑solving approaches must be aligned. He critiques the popular "hackers‑hustlers‑hipsters" model, warning against building a founding team based solely on complementary skills without considering vision, style, and cultural fit. King introduces the concept of "FSO" (Figure Shit Out) people—individuals with high fluid intelligence who can learn quickly and roll up their sleeves in early‑stage startups. He recommends test‑driving potential co‑founders through small, fast‑paced projects such as organizing an event, which serves as a micro‑cosm of a real business. He also provides concrete tools: a 34‑question worksheet to surface alignment on goals and definitions of success, and a spreadsheet to guide equitable (non‑50/50) equity splits based on contribution, capital, and contacts. Finally, King argues that the lack of a co‑founder should never be an excuse to delay; founders should start building with no‑code tools, engage in online communities, and attract collaborators organically. The overall message is a blend of caution (avoid mismatched equity splits and friendship‑only partnerships) and encouragement (actively create opportunities to meet and test potential partners).
Chapters
As a co-founder myself, I'm just going to dive a little bit into what my dynamic is with my co-founder. So me and my co-founder, his name's Adeo Ressi, my co-founder at the Founder Institute, we are pretty different people, okay? He's an extrovert, he's a risk taker, and his specialties are things like sales, tech, and finance. He's the one that's always on the big stages at the big conferences and things like that, whereas I am more of the introvert. For sure. I don't consider myself risk-averse, but certainly compared to my co-founder, I'm risk-averse. So that's why I say semi-risk-averse. And I'm much more sort of into the details and so the marketing and the operations and the product of what we do at the Founder Institute. So while the important thing here is while we're pretty different people in terms of skill sets and, you know, just our, the things that we bring to the table, him being an extrovert, me being an introvert, the important thing is that our styles are aligned. Aligned, right? We have shared interests outside of the business. We both love the outdoors. We both love doing stuff like that. We've known each other for a very long time. We both have a similar work ethic, right? Sometimes I'll wake him up in the morning, sometimes he'll wake me up in the morning. But I think the most important thing is that we're very structured thinkers, okay? And this even reflects itself in the product of the Founder Institute, where we're basically creating a structured process to help people build businesses. Every problem that we encounter or every challenge or whatever it is as a business, we always tend to break it down in a very structured way, right? And it's just like, okay, we do, we need to do this first, then we need to do that, then we need to do this. Let's not worry about that until next week or whatever, right? So we attack problems the same way. So the important thing to understand here is that, you know, you don't need to be super similar to your co-founder, right? It's good to have a lot of differences, not only in your personality but your skill sets. But the most important thing is that your styles are aligned, right? I think that is why myself and my co-founder have been successful together is because our styles are aligned. Even though we have a lot of other differences, the way that we attack problems, the way that we, you know, figure out how to build products and things like that, it's all very aligned. The second thing that I'll talk about here is sort of the classic team skills composition. All right, so I'm putting this on here now, but honestly, this is a little outdated, but just hear me out, okay? Um, normally, and this is something that became popular sort of in the early, early 2010s, I would say, where, you know, from an investor's perspective, uh, for them to look at a prospective investment, um, especially angel investors, and say, okay, this, this seems like a team that that has the ability to execute, that maybe, you know, has a great chance to build a great business and a low chance to fail really quickly, like that they would need to have 3 specific skill sets: hackers, hustlers, and hipsters. Hackers build the product, hustlers sell and raise the funding for the product, and the hipsters sort of design and market the product and take care of all the creative part of it. Okay. So that made very much sense from an investor perspective to kind of use that as a filter to look at businesses. But honestly, I see way too many founders using the same model to build their teams from the ground up. And that's a massive, massive mistake. Okay. While obviously as you build out the team for your business, you're going to want to plug different holes in terms of skill sets and things that you can bring to the table. But I see way too many founders when they're building out their teams go way too far down that rabbit hole where they're bringing on people that, that don't fit the vision for the business, they don't fit the style of work that you do or anything. And they're simply bringing these people onto the co-founding team because of the skillset that they have, right? They're like, hey, I can't build the product, I need a programmer. So you're a programmer, okay, join my team, right? Or I can't, I don't know how to do finances, I need somebody who knows how to do finances, right? Just join my team, right? And that is a recipe for disaster. So, The second thing that I'll say here is don't only look for skill sets, okay? Once again, you have to make sure that your working styles are aligned and you have to make sure that your vision for how you want to build out the business are aligned. Those two things are number one and number two, okay? Skill sets should probably be number three. And unfortunately, what we see most of the time with co-founders trying to, or solo founders trying to bid out of the team is they start with the skillset. And don't start with the skillset, okay? Just don't, because that's gonna cloud your judgment and you're gonna start bringing on people to your team purely based on skill when they don't fit any of those sort of team parameters that honestly are gonna make or break the business. The third thing that I'll say here is you wanna find FSO people, okay? FSO, pardon my French, stands for Figure Shit Out. As a startup, as an early-stage startup with very little resources, okay, when you only have a small number of people on your team, if you have somebody who's like a finance person or something and all they want to do is finance and they don't want to do anything else and they don't want to just kind of, you know, all have this all hands on deck mentality where they have to figure things out that maybe they didn't go to school for or whatever and they have to like get into the weeds and go on Google and just learn something new. If you don't have those types of people on your early-stage team, you're going to fail, okay? It's going to be an all hands on deck type of mentality in the early stages of your business. So you need people that can just problem solve, all right? For anybody who's familiar with the Founder Institute, we really take this to heart. Our admissions process in our program is based on social sciences, and one of the main things that we look for within that realm is something called fluid intelligence. And fluid intelligence, it's not IQ, right? IQ is sort of like raw computing power. Fluid intelligence is essentially somebody's ability to learn a new rule set very quickly and then put that learning into action, right? In other words, it's their ability to learn very, very quickly. And that is what you need in the earliest stages of your business. All right, even if you think your business is going to maybe eventually it's going to need the best email marketer in the world or anything like that, that's fine. But in the early stages, that core founding team needs to be a bunch of people who are ready to roll up their sleeves, get into the weeds in all different kinds of projects and honestly just figure shit out. See here. And then, so now that was kind of what you wanna look for from a dynamic perspective. Now I'm gonna talk about formalizing that relationship, okay? Way too many people think that because they're friends with somebody, that that means that they're gonna be a great co-founder with this person. Now I'm not saying that can't work. There's plenty of situations where it does work. But in my experience now, working with tens of thousands of companies over the last 15 years or so, I can definitely say that the much more often scenario is that good founders or good friends build a company together and then they, that company ends up, it either does well and they're not friends anymore or it doesn't do well and they're not friends anymore. Okay, like that happens much more often than the inverse where it's like, oh, somebody and their best friend, they started this company together and they're still best friends and it's a great business. Okay, so friendship does not equal business partner. You have to look at things differently. Now, the good news here is that there's a lot of really easy ways for you to sort of test drive this partnership. Okay, and you should do this whether it's your brother or your sister that you're trying to start the business with, or it's your best friend, or it's just somebody that you just met last week, okay? No matter what, a test drive is mandatory. And the best way to do this, in my opinion, and this is something that we always instruct our founders to do in the Founder Institute, is to start a small project first, all right? Why jump into this whole complicated co-founder relationship where you need to sign all these documents and all this kind of stuff, talk about equity, et cetera, right? That's just, that's a lot of stuff you don't need to worry about just yet. First, figure out if you can work well together, and the best way to do that is, in our opinion, is to put together an event, okay? And here's why I say that. No matter what kind of business you're doing, and this is even more so now because of COVID and the prevalence of online events like the one that we're all on right now, putting together an event forces you to do a bunch of different things, right? And it's probably a bunch of different things and a bunch of different skill sets that you might not necessarily have in your business, right? Somebody's going to have to figure out, okay, like, we gotta market this event, we gotta put together some creative or something, right? Somebody has to put some text around the event. Somebody has to figure out how to get some partners or something and post this on different websites and maybe talk to press or something for the event, right? Then somebody has to get speakers for the event. Somebody has to run the event. We need to figure out the technology. We need to do all this stuff. How do we communicate with the attendees? How do we communicate with them afterwards, et cetera, et cetera. Right? It's sort of a great microcosm for building a business, in my opinion, because again, it forces a small team of people to address a lot of different problems, very similar to what they're going to have to do when they build out a business, to do it very, very quickly and to learn very, very quickly and collaborate on how to do that. Right? And people are going to have to say, okay, yeah, I have no idea how to do this. I didn't go to school for this. I have no experience doing this professionally, but, but yeah, sure, I'll go figure it out. I'll do this. You do that. Right? So it is kind of a great petri dish for how you will build out the business and then, and how that relationship will work with this team. And secondly, as the added bonus, it's also helpful for the business that you may create anyway, right? Engaging with partners, building up a mailing list, engaging with speakers who are probably going to be other people in the industry that are fairly high up, right? All of these different things will be very useful for the business as well. So that's why I think it is a It's a great way to test out those relationships. And once again, I don't care if it's your wife or your husband, your brother, your sister, your mother, your father, your best friend, your worst enemy, whoever it is that you're thinking about building a business with. Hopefully it's not your worst enemy, but a test drive is absolutely 100% mandatory. Do not make the mistake that I've seen a million times where a relationship in one realm friendship, spouse, romantic, whatever kind of relationship translates to this business realm. It is completely different ballgame. Okay, and here are some ways where you can start to ensure some of this compatibility. All right, now please, when I say that these are questions and you can download this worksheet, or sorry, it's a blog post at bit.ly/34-questions, and we'll put it into the chat here as well. You know, these are just some questions where you can start to dive into some of the specifics on how, on how maybe you are jiving with this potential co-founder in terms of where do you see the business going? What state is your life in right now? What are your priorities? What, what does the definition of success mean for this business, right? These are all incredibly important questions that you need to ask, right? And I wouldn't say that this is not a replacement for doing a test drive project. Right? These are all things that you should be doing in, in correlation together, right? Because not only do you want to figure out if you can work well with this person in practice through a test project, but you want to make sure that your definitions of very simple things like what is success, where do we want this to be in 2 years, where do you want this to be in 5 years, etc., all of those things are very much aligned. So do me a favor, download this worksheet and That is definitely something that you'll want to go through with potential co-founders. So this is a topic that comes up a lot, right? Because now we're sort of talking about the brass tacks of how do you figure out the equity split with co-founders. And there really is only one wrong answer I've ever seen, and that's the 50/50 split. Okay, now again, 50/50 is assuming two people, right? So if you have four people, that could be the 25% split. 3 people, 33, whatever, right? Essentially evenly splitting the equity amongst the different co-founders on the team is almost always a— it's almost always going to lead to disaster in a couple of different ways. And more importantly, it's something that we see working with so many companies and a lot of investors as well. It's a bit of a red flag for them because when you see something like this, In your head, you're like, okay, these people, they don't really know what they're doing. All right. They have not had those tough conversations yet. They haven't actually talked to each other about what value they're bringing to the table. Right. So they're punting these tough conversations until later when things are sort of hitting the fan, so to speak. Right. And if you can't have those tough conversations now before you really get into the throes of the business and things are changing and stressful and all that kind of stuff, then your ability to have them later in a productive way is going to be that much more difficult. Okay, everybody brings a different level of value to the table. Myself and my co-founder do not share equally. He has a lot more of the company than I do, and again, it's for very simple reasons. Okay, uh, he provided a lot of the money up front to get the thing going, had some— a lot of the initial contacts to get the thing going as well, right? These are kind of grown-up, so to speak, conversations that you need to have on the front end, and it's a huge red flag to anyone else evaluating your business if they see these very equal equity splits. Okay, so there is a spreadsheet that should help you go through that, and I'm not saying it's an easy conversation, right? But that's part of building a business, a part of having a functioning core co-founding team, is to have those difficult conversations and not— and for that not to lead to like somebody not talking to you for a month or whatever, right? Like those are sort of the adult conversations that you need to have to build a great business. So download this spreadsheet which has some guidelines that can help you kind of get through that conversation and provide some framework for that. But believe me, that 50/50, that equal split, whatever it is, is usually a red flag. And it usually means that you're punting really hard conversations. Kind of kicking this can down the road on your business, and that's a terrible, terrible idea. All right, so the last thing I'll say here, and that's why we're all here today as well, right, is how to find co-founders. And the first thing that I'll say here is, and yes, I am quoting myself, ah man, I look a lot better in that picture than I do right now. Maybe that says something about COVID But the lack of a co-founder is a terrible excuse to not get started. All right, we work with a lot of founders who are in the early stages of this business, and I see way too many founders who basically are like, hey, I, I'm just waiting to, to make the next step on the business when I find the right person, right? If you are one of those people, if you've said anything similar to that, just shake free of that, okay? Just get that mindset out of your head, because with that mindset, you'll never get started. All right, do not wait for the right person to get around to get started. The way to find the right person is to just get started. Okay, you have to totally flip that equation around. And there you go. The best way to find a co-founder is to just get the fuck started. And the good news is now with all of these different tools that we have, you know, this is obviously— these tools are very specific for for digital businesses, but there's this whole no-code movement, right? So I put this on here because the most common scenario that I see is where we have this solo founder that doesn't have a technical co-founder, um, and they're not moving forward with the business, right? Because they're like, well, I don't have anyone who build the product, so how the hell can I build out the business? Well, the most important thing is, is that you don't have to build out the final version of your business from day one. All right, you can start cobbling together different tools on the internet. So this whole no-code movement, check out nocode.tech, it's on the bottom right here. Pretty good directory of all these different types of tools. All right, but the most important thing is like, don't wait until your product's perfect to start building it. Just start building it. Because by actually building out your product, by interacting with other people in the space, by starting to build lists of interested customers, by actually diving in and interacting with people interested in what you're doing, That's how you're going to find people to join your team, right? If you're just sitting around waiting to find the right person to even start any of those things, then you're never gonna get started, okay? So don't use the lack of a co-founder as an excuse to not get started. It is a terrible, terrible excuse, and it will almost always result in you never getting started, all right? And the other thing to do too to start connecting with different people in the space is to not observe but to participate. All right, no matter what kind of business you're building, there are communities around that business, right? There's LinkedIn groups, there's Slack groups, there's— check Eventbrite, see all the different events that are going on. And again, even if you're an introvert like me, it's online, right? So it makes it a lot easier. It's just— it's cheaper, it's faster, it's less of a time commitment, all these kind of things to just connect with different people in your space. There's a lot of other tools here as well, and obviously the Founders Institute as well does help a lot of people find other interested people in their space to help them build out their business. So don't observe, participate.
