4 ms·

This is very familiar and I've been dealing with it for a lot longer. Unfortunately my conclusion has been that I cannot grow my company any further with my co

This is very familiar and I've been dealing with it for a lot longer. Unfortunately my conclusion has been that I cannot grow my company any further with my co-founder, and I instigated a search for a buyer a few months back. I'm not sure how much of my advice is going to be useful if your money has nearly run out, but I can share what I went through to try to resolve the situation, and how it came to this. Can you agree on what the company is trying to do? Can you write it down? This is so important and took me & my co-founder years! Pick a performance metric for the company, share it with everyone and hold yourselves accountable. (we didn't do this for >10 years, until the growth had slowed - we had to backtrack through our random walk to find a model of why we'd grown, and therefore how we might grow more deliberately in future!) If you can do that, great! Now can you agree on what your individual roles are in achieving those goals? Can you give them titles? You say you've turned over $1m but I assume you have funding as well - what to do next really depends on how many staff you have, and whether you need them all to achieve your goals. If you have <10 or so, the "overstepping your bounds" dynamic sounds like a big worry - that might be your co-founder trying to build a comfortable wall where there probably shouldn't be one. At that size it's more important that you can trust each other to step in where necessary. If you have e.g. >20 staff, it's more important you cultivate autonomy among your two management chains, and try to hold each other accountable to higher level goals, accepting a bit of inefficiency in the process. I'd not write off someone who wants to take on sales & figurehead (CEO) stuff. Business need contributions that are not just "technical work", and you might be guilty of undervaluing what your partner does. The company dies without sales, and a figurehead needs to take primary reponsibility for the company's mission and keeping it accountable for that. They should also be the first person to spot customer problems, and want to air them out. At your size there should be a really tight loop between "sales person" and "product problems person", and the CEO needs to be in charge of that. So don't be tempted to talk down your partner's role as you've done here. Talk it up, then hold them to it. Ask why your CEO-in-waiting is letting customer problems are going unaddressed, and why he's not taking charge of sales while you solve real operational issues. Give him the shape of the business as you see it - that you're going to lose buyers because it's clear that the company is not solving current customers' problems well enough. Ask what his plan is to resolve that, and ask that he take charge of that plan- he's the figurehead, the salesperson-in-chief. (from what you're saying, it sounds like your CEO might need to get down with the product like he did at the start, and make a plan to step back up when more sales effort is required - is that about right? This kind of temporary change of role falls out of the targets you agree.) Management failings are really really hard to address. Unfortunately telling your partner that they are a bad manager, despite all the evidence you can muster, will not work. If you're expected to fill in for their managing - bring that to their attention. Tell them what conversations you've had with "his" staff, why that's a problem, and what you'd like him to do to resolve them. (This was probably the biggest red flag in my business - an elaborate shadow management structure to prop up a bad manager is torture for everyone. If your co-founder is motivated by fealty, flattery etc. rather than having his staff achieve cool things - that is such a hard attitude to shift, and especially to recognise in yourself. Being as absolutelly charitable as possible - what do you think they are motivated by? Has that changed since day 1? Can you work with that motivation?) So ... I'm not sure if you've had a direct conversation, or what personal stock you might have in being blunt to the point of risking your relationship. But the financial situation sounds like you may not have a choice (is this subscription revenue or a predictable set of one offs? I'm guessing subscription and investment has taken your burn rate too high?). Lay it on the line to your partner, with the greatest respect to his past achievments. You had nothing, you now have a company & professional respect. Leave bitterness and ego at the door. Put the crucial problems of the business on the table, and see if you can build fresh confidence between you to resolve it. If you can't do that in one or two meetings, where the stakes are very clear to your partner, make your own plan to leave because at that point it won't be mutual. Don't give yourself the pain of trying to agree a mutual exit plan - decide what's right for you, and execute on that. The line about "struggling to have meaningful conversations" is exactly where I was years ago - and still am in some ways. It took me a while to get from that point to actually pushing to leave, but I've had to do that on his schedule. I'll miss the wonderful team we've built, but I know that I'm wasting theirs and my time by staying. I wasted real value in my company by hoping my partner would change for much too long. Take my advice, lay it on the line for them as a matter of priority, and if you don't get real commitment, get your head in your next opportunity ASAP. The team, the customers and everything you've built can't come to anything if you've correctly identified such a big structural failing in your company. Act on it! And good luck.

bwb 8y ago
Feel free to hit me up if you want to talk, my email is in my profile and happy to jump on voice. I am happy to go into more detail on what I tried with my co-founder what worked. Over the last couple of years, I've talked to a lot of founders so I've got a good collection of what others tried too (slowly writing content for https://healthybusinesspartnerships.com/ https://healthybusinesspartnerships.com/). I went through something similar with my 50/50 business partner in 2014. Not quite the same, but close. My co-founder had a bit more of a mid-life crisis that he took out on me, although with your partner it might be similar under the surface. I tried meditation with someone who helps on this store of thing, time, some alternative work arrangement proposals, a coach to work with him, and so on. I was prepared to talk to our only investor and fire him at the time, but it would have created a lot of problems due to our structure. So I tried to buy him out... but in the end that didn't work out and I decided the best course of action for my stress was to sell. It sucked but happy to be out of it. What would I recommend? *With the caveat, I don't know more of the details. 1. You guys have hit a million run rate, that is impressive and a huge point to reach. Don't throw away the company so quick until you figure out if you can salvage this, or if you want to salvage this. I would stress that not many companies get to $1 million. I don't know how that first batch of customers is doing, or if you can be profitable without an investment round so there are two big questions I would ask myself. 2. Do you still like this business? Do you want to keep doing it even if you only own 50%? If you want to continue on this project... 3. I'd recommend going to couples counseling. I kid you not. Tell him that you want to go to a weekly couples counselor and find someone who focuses on business partnerships, this could be a mentor, this could be a therapist. Find someone and have a place you guys can start talking to see if this is going to move forward. If you can't talk this isn't going anywhere. If after that you still can't talk... - Can you work with the investors and fire him from day to day and take over? I wasn't sure if there were any investors... - Can you find an investor who will buy out a portion of his ownership or all of it? PS. I'd love to hear more on the business and possibly buying him out as well. Always interested in that.
throwaway9934 8y ago
Hey thanks for responding. I'm sorry to hear you are in a similar situation. Okay so yes we can agree on what we're trying to as a company and we can write it down. We even have a performance metric. So that's a good start but you'll see things start to break down for us soon. There is no accountability, and we absolutely cannot agree on individual roles let alone come up with titles. Turnover was > $1m, we have no funding, and < 10 staff. Both of us have a technical background. Our model is basically one large up front set up fee and then an ongoing subscription. Your comments about the CEO type role are interesting and really accurate. Right now I'd guess that I'm 80/20 tech/sales and he is 20/80. So he is the initial primary contact for most of the sales although over time I seem to become the primary contact. I think this is because I am more willing to recognize and admit the problem exists. Some of the technical problems are only currently solvable by one of us because of specific domain knowledge. Otherwise I would have taken responsibility for everything technical. We cannot agree that the company is not solving current customers problems well enough. I hear a lot about managing expectations and T's & C's. I feel like I often have to step in and fix relationships with customers because of this. Then I end up making a plan, taking charge of the plan, and making myself accountable to the customer for executing that plan. I seriously piss him off when I do this, especially if it is one of "his" accounts. I've taken on board a lot of the advice I've read here today, and I just maybe think that I may have been able to finally get the idea through to him that happy customers will make his sales job a lot easier. I've also (I think) managed to make him see that it would only take us a maximum of one month to solve all the remaining problems that I (and most of the customer base) classify as major. I'm going to do everything I can to make sure the company will survive the next couple of months (that means sales) and then I'll need to revisit the idea of what's next.

bwb 8y ago

Feel free to hit me up if you want to talk, my email is in my profile and happy to jump on voice. I am happy to go into more detail on what I tried with my co-founder what worked. Over the last couple of years, I've talked to a lot of founders so I've got a good collection of what others tried too (slowly writing content for https://healthybusinesspartnerships.com/ https://healthybusinesspartnerships.com/). I went through something similar with my 50/50 business partner in 2014. Not quite the same, but close. My co-founder had a bit more of a mid-life crisis that he took out on me, although with your partner it might be similar under the surface. I tried meditation with someone who helps on this store of thing, time, some alternative work arrangement proposals, a coach to work with him, and so on. I was prepared to talk to our only investor and fire him at the time, but it would have created a lot of problems due to our structure. So I tried to buy him out... but in the end that didn't work out and I decided the best course of action for my stress was to sell. It sucked but happy to be out of it. What would I recommend? *With the caveat, I don't know more of the details. 1. You guys have hit a million run rate, that is impressive and a huge point to reach. Don't throw away the company so quick until you figure out if you can salvage this, or if you want to salvage this. I would stress that not many companies get to $1 million. I don't know how that first batch of customers is doing, or if you can be profitable without an investment round so there are two big questions I would ask myself. 2. Do you still like this business? Do you want to keep doing it even if you only own 50%? If you want to continue on this project... 3. I'd recommend going to couples counseling. I kid you not. Tell him that you want to go to a weekly couples counselor and find someone who focuses on business partnerships, this could be a mentor, this could be a therapist. Find someone and have a place you guys can start talking to see if this is going to move forward. If you can't talk this isn't going anywhere. If after that you still can't talk... - Can you work with the investors and fire him from day to day and take over? I wasn't sure if there were any investors... - Can you find an investor who will buy out a portion of his ownership or all of it? PS. I'd love to hear more on the business and possibly buying him out as well. Always interested in that.

throwaway9934 8y ago

Hey thanks for responding. I'm sorry to hear you are in a similar situation. Okay so yes we can agree on what we're trying to as a company and we can write it down. We even have a performance metric. So that's a good start but you'll see things start to break down for us soon. There is no accountability, and we absolutely cannot agree on individual roles let alone come up with titles. Turnover was > $1m, we have no funding, and < 10 staff. Both of us have a technical background. Our model is basically one large up front set up fee and then an ongoing subscription. Your comments about the CEO type role are interesting and really accurate. Right now I'd guess that I'm 80/20 tech/sales and he is 20/80. So he is the initial primary contact for most of the sales although over time I seem to become the primary contact. I think this is because I am more willing to recognize and admit the problem exists. Some of the technical problems are only currently solvable by one of us because of specific domain knowledge. Otherwise I would have taken responsibility for everything technical. We cannot agree that the company is not solving current customers problems well enough. I hear a lot about managing expectations and T's & C's. I feel like I often have to step in and fix relationships with customers because of this. Then I end up making a plan, taking charge of the plan, and making myself accountable to the customer for executing that plan. I seriously piss him off when I do this, especially if it is one of "his" accounts. I've taken on board a lot of the advice I've read here today, and I just maybe think that I may have been able to finally get the idea through to him that happy customers will make his sales job a lot easier. I've also (I think) managed to make him see that it would only take us a maximum of one month to solve all the remaining problems that I (and most of the customer base) classify as major. I'm going to do everything I can to make sure the company will survive the next couple of months (that means sales) and then I'll need to revisit the idea of what's next.