The silent killer of start-ups

26 Apr 2024
Carrie Birmingham

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We all know a staggering 65% of startups fold due to co-founder conflicts, but rarely do co-founders know how to tackle this silent killer.

At the start, founders are fuelled by energy, belief and usually a lot of coffee (!).  Typically, a great deal of care has been taken to choose the “right” co-founder and this plants the seed that, “we won’t be one of those stats.”  But this belief quickly meets the high-stakes pressure of courting investors, finding employees, trying to create something scalable, speaking to potential customers, and facing decreasing funding runways. Building a business is exhausting, and there is an expectation to work faster and harder.

As tension mounts, the strain starts to show in the partnership, deep issues are skimmed over and unhealthy habits develop.  You are tired and so you start to feel resentful about mistakes that are made, and because you know you are pushing as hard as you can, you look across and wonder if they are?  Drawing on thinking from Ester Perel, here are some signals that the niggles between you and your co-founder may be rooted in deeper, covert issues:

You’re not talking about the hard stuff. You are repeatedly avoiding a specific issue or problem in the company because it’s too difficult to talk about. I often find that co-founders resort to being “keyboard warriors” so things get written in Slack rather than resolved.  Hence, they are patching over cracks instead of making structural repairs to build stronger roots.

You keep having the same old fight. You recognise that you are having cut-and-dried, fixed conversations with predictable paths and tired arguments. In your head you are thinking, “Here we go again” and there is a sense of deja vu.  It’s the same fight because you all keep doing the same thing.

You believe your co-founder overreacts. At home you say to your partner something like, “All I said was that I had concerns and she flipped.” When someone has a heightened reaction that doesn’t seem to match the situation, it’s a clue that there’s more to this disagreement than there appears.

When I talk to co-founders about their partnerships, they are often “hoping” things will get better. Which is understandable because they are both deeply intimate, (i.e. you spend more time with each other than with your partner at home) as well as being bound together with partnership agreements and shareholder schedules which outline the scary financial implications of it not working.

Unfortunately crossing your fingers is rarely a great strategy when partnerships start to slide.  But it’s so tempting! Because relationships at work are tricky, we tell ourselves, “It’s just work, so we don’t have to bestie mates.”  So, the irony is that the more important the relationship, the less likely you are to risk admitting there is a problem.

Working on the business is not the same as working on the partnership. From the outside, we assume that good partnerships come easily, yet I find the best partnerships are where people have worked at it, making it a business priority. They have dedicated time for each other (often tricky in the remote first world), they feel the stomach churn and still have conversations about the hard stuff, and they are brave enough to ask for help.

Investors are taking notice of this reality; they’re investing not just in ideas or business models, but in teams that communicate and work effectively. Startups that invest in robust co-founder relations stand out, secure better funding, and achieve sustained growth.  So, take another brave step by seeking help for your internal conflicts and know it’s a hallmark of strong, forward-thinking leadership.  After all, it’s the relationship between co-founders that often determines the fate of startups.

This blog was published on Startups Magazine website.