The Power of Two: 2 > 1!

Looking at the most successful Internet and technology companies of the past few decades, it’s shocking to see how many have two or more founders: Google, Apple, Microsoft, Intel, Youtube, Skype, Yahoo to name a few all have multiple founders. Even Oracle which is closely associated with Larry Ellison has multiple founders. It’s much harder to come up with super successful Internet companies which only have one founder. Amazon and eBay seem to be the exception and Jeff Bezos is all the more exceptional as he is still CEO. The same applies to up and coming Internet companies which also seemingly all have multiple founders: Gilt, Yelp, Facebook and Twitter.

I would not have expected this result. Running a successful starting requires clear and rapid decision making: you ask everyone’s opinion and make an informed decision and assess its impact. If it’s a product decision, you A/B test the top few decisions and keep refining. There is no time to find the democratic consensus, the field is too dynamic and competitive and from experience the consensus decision is usually worse than an informed rapid decision followed by rigorous A/B testing with continuous refinement. I would have suspected that having multiple founders would slow down the decision making as the co-founders would have to agree on a decision before it gets taken.

Moreover, most marriages end in divorce. Why would it be any different for business relationships especially given the stress that the two partners are under and the financial stakes involved? In fact, I would have expected that companies with multiple founders to be more likely to fail than companies with one founder for that very reason as two disagreeing founders would tear the company apart.

If someone did the analysis, I would bet that companies with multiple founders are more likely to fail than companies with one founder, but when they succeed, they are more likely to succeed in a bigger way.

There are four reasons why having a partner might make a huge difference:

1. If you can’t convince your friends to join you, you probably should not be starting the business.

Your friends are likely to be your most lenient audience: they have no choice but to listen thoughtfully to your crazy ideas so if you can’t convince them you are in trouble. It might be that your idea is not convincing, maybe it does not meet the 9 business selection criteria? 🙂 Alternatively, you might not be an effective pitchman for the idea. This is even worse, you can always find a better idea, but ultimately a startup CEO is a salesperson: he has to sell his vision of the world to investors, employees, customers, the press and anyone who will listen!

2.Being a startup founder is incredibly lonely and it’s great to have someone to pick you up when you are down and keep you grounded in reality when you become exuberant

As the sole founder you always have to exude confidence in your vision, idea and ability to execute, but the reality is that life in general and startup life in particular is anything but a continuous series of uninterrupted successes. There are countless ups and downs. While at Zingy for the first two years we were continuously on the verge of bankruptcy. We missed payroll countless times and I would raise $25k or $50k at the last minute to belatedly make payroll. Sharing those problems with existing investors, potential investors, partners and employees would have only made them worse. It would have been great to have someone to share my fears with.

Having a partner also makes you much more resilient as you don’t want to let him or her down. There is a magical esprit de corps that forms when you are working intensely with other people. Beyond having someone there to cheer you up when things go wrong, this fear of letting your friends down keeps you going no matter what!

3. It’s necessary to have a strategic sounding board

In a startup, you typically hire people based on their functional expertise: a fantastic VP of Marketing or Head of Engineering. You want to hire the very best at every position which means almost by definition that those people are hyper specialized. They are significantly better than you would be at what they do, but they don’t have the same global perspective and vision. That’s ok, but it’s your job as founder and CEO to define it. However, startup success is so much about effective execution that you can easily get lost in the details and forget the big picture.

It’s important not to lose sight of strategic considerations as they ultimately determine how much value you are creating. In other words, it’s not just important to implement the right billing platform but to make sure we have selected the right business model. Similarly, we need to be cognizant of the macro environment. Valuations may be inflated or the competitive dynamics may be about to shift dramatically suggesting that now is the time to sell.

It’s easy to lose sight of all this while you are busy executing. There are alternatives to having a founder for these roles: throughout my life, I have had the pleasure of having fantastic strategic advisors: my friends from McKinsey like Bryan Ellis, thoughtful businessmen like my dad, other Internet entrepreneurs and more recently my amazing VC board members at OLX: Jeremy Levine and Joel Cutler. However, I know how privileged I am to have been surrounded by such amazing people. Many entrepreneurs don’t have the same business background and network and a co-founder is a fantastic sounding board for strategic ideas.

4. There is so much work to do, it’s good to have someone you completely trust to split it with

Many people imagine that a CEO merely sits in his office thinking big thoughts. I doubt that’s the reality at large corporations and I know it’s not in startups which are perennially under staffed relative to the amount of work they have to do. As a founder you have to be willing to do whatever it takes to succeed. Chances are you will be involved with PR, legal issues, partnerships, product decisions and much more! So much time is spent dealing with fires (we just got sued, this huge company is willing to sign us but we have to be ready by tomorrow, etc.) that it’s good to be able to split the work with!

Not only are there four good reasons to have a partner, but currently having had a Co-Founder and Co-CEO for three and a half years, my aforementioned fear of it slowing down the decision making process was overrated.

My partner is Alec Oxenford. I have known him for 11 years. I met him when his friends and he were considering what to do on the Internet in Latin America and I provided them with the business plan and technology to create Deremate, an adaptation of eBay for the Latin American market.

We have extremely similar backgrounds: he went to Harvard, I went to Princeton. He worked at BCG, I worked at McKinsey. He was CEO of a copy of eBay for Latin America, I was CEO of a copy of eBay for Southern Europe.

You might have argued that our similar backgrounds would lead to conflicts over who does what. What’s interesting is that we never once discussed our respective roles – we fell naturally into them based on geographic location, linguistic ability and personal preferences.

He is based in Buenos Aires where 110 of our 140 employees are based so he takes a much more hands on role in hiring and day to day management. Similarly, his more attuned political skills mean that he takes care of solving conflicts in the company and plays a much bigger role in post-merger integration. Given his linguistic skills, he obviously takes the lead on Spanish and Portuguese related partnerships and PR (public relation) opportunities.

Because I am based in NY closer to where our investors and potential investors are, I take more of a lead in IR (investor relations). Given that I am at a stage in my life where I have an easier time to travel (I am single while he is married with two amazing kids), I take more of a lead in frontline M&A (identifying and speaking with potential acquisition targets in the early stages of the process) and BD (business development). Given my linguistic skills, I take the lead on French and English PR opportunities. Finally, I care deeply about product decisions and involve myself more closely in the product planning process.

What is interesting is that our skill sets are essentially identical. We could actually successfully swap roles and often cover for each other when one of us is at a conference, on vacation or if there is some sort of fire that needs to be put out.

We are equally involved in strategic decision making. It’s the one place where a slight difference emerges, he is much more conservative by nature and I am much more gung-ho. Even there our differences balance each other and let us reach a better outcome. Interestingly enough, our board members also have a similar distinction: Jeremy is more conservative and Joel more aggressive. (BTW this is not to say I prefer Joel to Jeremy – they are both extremely smart and thoughtful and the discussions all four of us have had have proved invaluable). As an aside, Jeremy seemed like a new man in the last board meeting ready to conquer the world and take no prisoners. I was fun to see! I wonder if the rumors that one of his portfolio companies had recently received a $500 million buyout offer had anything to do with it 🙂

Any combination of founders works, but similar people who respect each other is probably best

The common recommendation is for a business founder to join forces with a technical founder. When I look at successful startups though there does not seem to be a rule. If anything there are more teams were all the founders have technical background (e.g.; Google) than mixed teams. From my experience with Alec, I can glean why that might be: if you understand where your partner is coming from, you are in a stronger position to respect his choices and mutual respect and trust is essential to sustain the partnership – just like in a marriage!

I actually once described my relationship to Alec as a good marriage, but he immediately corrected: “it’s much better than a good marriage: we never argue about anything and never fight!” He should know: he has been in a fantastic happy marriage with an amazing girl for over ten years!

The conclusion is clear: if you are creating a startup get at least one partner!

  • I never thought this was true; however, when I look back at my most successful ventures, I always find a partner there with me.

    I’m in the middle of trying to proving this theory wrong by launching a solo venture. I’ll let you know how it goes.

    Robert M. Cavezza

  • Actually Pierre, who wrote the code for eBay in it’s alpha-phase got his friend Jeff Skoll involved as co-founder and president, and the two really created the business, raised money etc.

    so there you go, another power of 2 🙂


  • These are great points!!!! I once went through a partnership of 4 people in business school- a VERY small clothing venture, but learned a ton – essentially most of what you pointed out below. But 4 people was just too much and I would never do it again.

  • Very interesting topic and one i’ve dug in myself considerably. However if I may add my two pence: having more than one founder or co-founders does not necessarily mean that one of them is not the ultimate decision maker! In most of the below theres one key figure-head: Zuck in Facebook, Steve Jobs in Apple, Bill gates in Microsoft .. etc. I think Google is a rare exception and they countered that by bringing in Eric.. Youtube was too fast a story to even have time to develop power struggles so that too is not an appropriate case study I think..

  • Ultimately what matters is not the % of the company you own but how much your stake is worth. 5% of $1 billion is better than 100% of $1 million 🙂

    The way to think through the decision whether it’s to raise money or to take a partner is: will the value created by the new person or the money raised be greater than the dilution you suffer. If the answer is a clear yes, go for it!

  • Great thoughts here but I question one statement…
    “but similar people who respect each other is probably best”
    Wouldn’t you prefer to have people or are dissimilar so that they can take on different tasks, ie. CEO – business, and CTO – technology?


  • Interesting read. I’ve given a lot of thought to this question of late. My net takeaway is that while I recognize the value that a cofounder represents in the early stages of company building, I don’t think it’s worth checking this box at the expense of organic development. Wrote a response to your post on my blog:

  • Having a partner in my business venture has proven to be successful, and like Sam, I think that sometimes you can get too many partners (4 people is too much in my opinion too). One thing I wanted to say to Sam though is that I just read a great book…”Built To Sell” by John Warrillow (I had the opportunity to preview this awesome book before- it doesn’t come out until February)In the book, Mr. Warrillow made a great statement… He said that he learned more from his mistakes than anything he did right. The book offers a blueprint to help business owners/entrepreneurs create and maintain a successful business. Sam maybe you should try another venture, with less partners this time :).

  • Fabrice am in total agreement with your article.if any start up especially tech one is a one man show,then there is no future at all.that is fact!even ancient people believed two heads are better than one.

  • Really thoughtful post. As you mentioned, it is not clear if this is just the few major successes here, or a general rule. Still, on a much smaller scale, I work very closely with my father. Generally decisions can be made as fast because we know each other so well. We always seek consensus with each other, no one else, and because of our relationship and knowledge of each other, we usually think of the opposing view before we even discuss it. I feel lucky for this, and it is likely what you, and the others mentioned must have. It is very lonely to be going into it completely alowithout someone you completely trust and respect.

  • My experience has showed me that having various partners that focus on different parts of a business that is being born, can be a great part of a *lean* operating strategy. And as long as there is great communication and whatever “needs” of each partner simultaneously grow with the company, problems can be minimized. Keeping focus on the company’s well being, being fully aware of your function as leader in your area, respecting each other’s subject areas and being totally sincere throughout the life of the company can be elements that, if applied, could greatly diminish risk. Usually a person that goes “solo” is never really alone. There has to be some kind of structure that will support whatever project the “single CEO” may have. So, promises, deals, shares, and money play a big role in how “solo” can someone be at the top. Lets not forget about the component of stress AND skimming on details, which, at the end, is what really makes the difference in any B2B now a days. You can bust your own bubble if you missed an important detail that, if you would have had a partner, may have possibly come up on a trivial conversation and you could have saved yourself and possibly your family, the grief of a business gone sour.