Smart Startup – Smart Up

Chapter 7: The Co-Founder

As we know,

very few people make a career alone.

Most great startup stories are stories of a group of people.

In other words,

it is very difficult for an individual to make a great career.

As the famous American businessman

and investor Warren Buffett said:

“If you want to go fast,

go alone.

If you want to go far,

go together.”

A startup entrepreneur goes

to an investor to raise capital

with the desire to turn his idea into reality.

The investor spent more than three hours listening

to this guy preach.

Then he commented:

“Your idea is brilliant,

but I want to ask more:

Do you have your own team?”.

The guy replied,

“No,” and then the investor replied,

“Sorry! We don’t invest in ideas,

we just invest in a group of people.

Even if your idea is brilliant,

if you don’t have a team to work with,

I can’t invest.”

Some time later,

another entrepreneur came to the investor

and presented an idea to hope

that the investor would turn this idea into reality

by pouring capital.

This second guy’s idea wasn’t as brilliant as the first,

but he had a group of three people working on it.

The investor has agreed to invest non-refundable in this idea

for two years.

The difference between the first

and the second is not the good or bad idea,

the future future of the project,

the investment capital more or less …

but the second person has a team to execute,

and the first one is not.

And that’s the difference:

a group of like-minded people working together to do great things.

So, starting a business means

you have to find yourself a co-founder.

In Silicon Valley,

there is an “implicit” view

that no investor will ever put money into a startup team

of less than three people.

The important issue here is:

What are the conditions between the co-founders?

The following are terms of cooperation

that must be agreed in advance by a group of co-founders.

1. Name, time, duration and purpose of cooperation.

First of all, it is necessary to clarify what is the name of the group,

how long is the cooperation period

and when will the cooperation project end?

What is the purpose of this partnership and start-up group?

There are questions that must be clarified at the outset.

And this is extremely important.

The collective purpose of the group shows the individual

purpose of each person.

The goals of each person must be linked together

to form the complete purpose of a team,

whether the team consists of two people,

three people or more…

Co-founders must clearly understand their goals to achieve.

What is coming?

And each person in the organization must act

for that common purpose.

There was a father who took his three children to the forest

to hunt deer.

The father asked the first son:

“What do you see?”.

The first son replied,

“I see the forest.”

The father continued to ask the second son:

“What do you see?”.

The second son replied,

“I see a gun.”

The father continued to ask the third son the same question:

“What do you see?”.

The third son replied,

“I see a deer.”

The father replied,

“Very good! I will cooperate with you,

the other two can do whatever they want.

In my opinion,

it is better for you to go home

because deer hunting is not suitable for you,

and you should not be on the same team as me.”

In the end,

the third son and the father hunted ten deer,

while the other two sons did not hunt any deer.

This story highlights a very important philosophy:

In an organization,

each member must have the same purpose

or serve a common purpose

and must see what the whole organization sees,

or else invite them out. organization.

Form of cooperation

Cooperation takes many different forms.

At the beginning of the start-up,

you have to clarify the form of the partnership,

who will do what? Who will contribute?

And who will do what specific work?

This transparency will help the parties

– the co-founders

– have a clear picture of what they will do

and thereby achieve the best possible effect.

Identify how co-founders contribute.

What do you personally contribute?

Competence,

capital,

or employment?

What will the first co-founder contribute?

Similarly, the remaining founders must be able to answer the question:

What does each of them contribute

to make a successful organization?

All must be clear until you see every detail in the big picture

of the work,

then proceed to launch:

building a startup.

Be clear from the start to avoid trouble later.

2. Agreement on enterprise expense management.

As you know:

expenses and cash flow are the lifeblood of a healthy

or ailing business.

So managing enterprise expenses is an important step

that co-founders must clarify

with each other from the very beginning of a startup.

Reaching agreement on cost management is critical.

Any business must have costs,

especially supplier costs

– that is,

people who make your product.

And it’s important

that all cofounders understand this cost flow,

not just one founder.

Because if one of the co-founders does not know how the financial flow

of the business is going,

it is very annoying.

There are two entrepreneurs starting out,

one is a sales person,

the other is an online marketing trainer.

Initially, two people cooperated

to build an online marketing training business in the model

of 50% – 50% after deducting all expenses;

The problem is that the salesman knows nothing about the cost

of online marketing technology services.

The course was organized

and produced a lot of students,

and in summary,

the trainers also both online marketing services

and training office costs,

which are extremely high costs.

Therefore, the 50%-50% split after deducting

all expenses is not as expected by both people.

Since the salesman only knows the sales job,

and all the rest is taken care of

by his online marketing training,

both of them are not satisfied with the final split

and so they split up. each other’s hands.

Thus, the agreement on enterprise cost management is really necessary

because it determines the long-term path of the co-founders.

3. Responsibilities and powers of each party.

After discussing the management of corporate expenses,

it is time to divide the responsibilities

and powers of each party and all parties.

In the process of collaborating

to build a business,

there will certainly be people who are excellent in one role

but not excellent in another and vice versa.

When a person does well in a role,

their responsibility is higher,

and their authority is also higher.

On the contrary,

if a person has not done well in a certain role,

then they have to accept the role and their authority is lower.

Therefore, the rights and responsibilities

of each person in the co-founder group are not the same.

Rights and responsibilities are divided among each person according

to the way they contribute to the organization,

including:

working capacity,

capital,

time and work undertaken.

For example, in the case of a sales expert

and an online marketing trainer working together

to build a company,

when it comes to customers and finance,

the sales specialist customers will decide

– having greater authority,

and greater responsibility for customer creation

as well as corporate finance.

In contrast, with what is related to the training program

and customer care after the course,

the online marketing training specialist will take over.

So in this case,

the online marketing training specialist will have a higher responsibility

for training programs

and customer care support than the sales specialist,

and thus the authority in this section.

This is also higher.

At some point,

both of them have to combine with a marketing expert

to increase sales and business reputation.

At that time,

both parties must divide responsibility

and authority to the third party.

In any case, this means:

Authority goes hand in hand with responsibility,

more authority means more responsibility and vice versa.

4. Unify the accounting method used.

Accounting is an integral part of every business,

be it a start-up or a long-established business.

Therefore, from the outset,

the co-founders will have to agree on the accounting method used

– that is, to build financial flows based on the revenue

and expenditure and the financial relationship of the business

with the state

– as how?

5. Salary and benefits of each party.

After agreeing on the accounting method to be used,

it is time for the parties to discuss the salary

and benefits of each founding member.

Usually the salary in the start-up stage is not very high

and the benefits have to be negotiated to get results.

It’s rare that wages

and benefits in the early stages of a business hit their mark,

which is why it’s so obvious from the start the better.

Be careful with this:

Sometimes you need to compromise

all you have to build a successful company,

accept working without pay for long periods of time

and not care about personal interests first eyes for business to take off.

6. Profit sharing and loss sharing.

There is a saying in entrepreneurship:

“Always believe in the best,

but always prepare for the worst.”

Have you found that when there is a profit,

everyone is excited,

but when the business loses,

few people accept it?

That’s why we have to pay attention to this in all cases:

Leave profit sharing

and loss sharing for all co-founders.

There are many different rules

for dividing profits and losses,

but usually according to the principle:

If the profit is divided,

the loss is also divided.

This makes sense when the co-founders are people

who know who they are,

what they do, and what they contribute.

what and what will be in return.

There is another method of profit and loss sharing:

If you contribute your core competencies,

you will not contribute capital at the same time,

if you contribute capital,

you will rarely contribute to jobs,

if you contribute to jobs,

you will rarely contribute capital

and core competencies…

When profits are made,

the capital is divided (converted into money)

for the co-founders to invest in core competencies,

invest in capital and invest in jobs.

On the contrary,

when there is a loss,

the capital contributor will lose money,

the contributor of core competencies

and jobs will not lose money

but lose time and effort for this joint project.

In general,

if there is a loss,

each founding member

who does not lose one will also lose the other.

It’s another form of profit and loss.

And no matter what,

the division of profit

and loss must be clearly placed on the negotiating table

of business co-founders from day one.

7. Farewell.

Not only the division of profits

and losses needs to be put on the negotiating table

from the very first moment

when starting a business,

but it is also at this time that the “breakup” condition must be said.

The story of starting a business is like the story

of a couple who love each other,

get married and get divorced.

Why did we start talking about “break up”?

Nowadays people have marriage laws

and also divorce laws to divide property and related things.

Therefore, co-founders also need to sign together

before the common principles

when establishing a business

and when breaking up a business.

If the startup project is viewed as a long-term path,

the co-founders are actually individuals

who marry to make great careers.

If there is a divorce law,

there must also be a divorce law for businesses.

In fact, the things that need to be agreed in advance are:

When working together,

what is the purpose of working together

and what is the purpose of fighting?

And what are the conditions?

In fact, the opposite goals

and conditions would make it impossible for the co-founders

to continue fighting together.

That’s when they had to part.

Instead of having to wait a

while to work together

to find out that the ideals

and conditions are not compatible and then break up,

this should be brought to the negotiating table

as soon as the business is started.

In fact, the terms of the “breakup” agreed

from the beginning will help the co-founders not arbitrarily violate

the principles set out.

That is also the way to build a sustainable business,

lasting with time.

“Not only pointing out specific issues

to help readers identify themselves,

thereby having orientation

and determining their own path

when deciding to start a business,

Smart Startup also gives advices

and suggestions open the preparation,

the way of implementation;

helping young people take a firmer step on the path of entrepreneurship.

Simple, easy to understand,

easy to grasp and execute step by step.

Success is a process and needs to be started smarter…”