Readit NewsIf you leave on bad terms and start another similar company, could a vindictive former partner come after you legally because they own your old work?
I can do business, but I am having trouble finding a technical person I can trust to take over while I do sales and other things.
You are correct though, the money should come after it’s found.
He did say he had early traction I wonder what happened to that.
There's one easy part of your situation, which is that your immediate next step is clear. I think it's clear because it sounds like the two of you have a fundamental disagreement about how to choose a direction. There's also a power imbalance if you've consistently been going along with pivots that you don't want to execute on. If you think you can resolve things, then maybe I'm wrong. I'm basing my advice on the fact that this is 24 months in — enough time for you to know how easy it'd be to get back to "we like working together and are on a path to success."
Now for the hard parts: * You want to act as professionally as possible in walking away. Communicate clearly, being fair to both yourself and the other people involved. I think it's easy to err to far on either side (either too defensive/passive "nice to yourself" or too deferential "nice to others"). * It can be tempting to think of this is as your cofounder's fault, but that's not constructive, and it's better to learn toward your future actions. For example, how could you have seen this problem earlier? My guess is that you were never "cofounder compatible," and this is a chance to get better at identifying that compatibility with others (useful for both startups and other jobs).
It's not a fun situation, and I hope things go well for you.
- Building a company is really emotional, as you already know. Most founders are under-skilled when they start, and are forced to learn quickly. As a result, you get a lot of scars along the way and the experience will test all of your insecurities. Learning how to resolve existential crises again and again is part of the package. And it gets worse. Wait until you have whole teams of smart opinionated people that you have to lead.
- It'll be good to revisit why you and your co-founder decided to start a company. You've both spent 2 years of your lives living in the trenches, so to speak. Someone decided you two were worth the risk. Why didn't your co-founder quit after the first idea failed? Why does she keep trying? I obviously don't have enough info to make any judgement calls, but I've seen situations where people make the wrong call because they've failed to truly appreciate the emotional baggage. For example, sometimes the first failure hits really hard and triggers all sorts of insecurities in a co-founder about not being good enough. And if their team starts questioning their judgement over and over without diffusing the insecurities, it just makes things worse.
- There are good and bad breakups. Good breakups are worth it for the emotional closure and the reputational upside. Bad breakups can create all sorts of fallout that will affect you in unexpected way (sometimes without you even knowing, ex. if the drama resurfaces during due-diligence). All the legal mechanics are also much smoother and drama-free when the breakup is on good terms.
- I am probably biased because these types of co-founder blowups are what keep investors up at night. Losing a technical co-founder is not only emotionally draining, but usually lethal for the investment. People problems are gnarly and take a lot of skill and precision to diffuse. If anything, use the crisis as a personal challenge to figure out how to resolve it on good terms.
what does a good cofounder breakup look like?
1. At this early stage of the business, the core asset is really the co-founding team and their relationship. Conflict is very much normal, but how you resolve it is important. You should be able to articulate your co-founder's concerns. For ex. she might feel the pressure to show "progress" to your investors.
2. It takes a lot of time and energy to build a good working relationship. Moving onto something else might seem like a good idea at the moment, but you could be right back with the same issue with another co-founder.
3. If you do decide to move on, end the relationship as amicably as you can. Note that this is not necessarily the "quickest" route, but it'll help keep your reputation intact.
Edit: spelling.
I went through this and have strong feelings about it. I think the most important answer is to a question you aren't asking.
*How to predict market demand for a new product.*
It sounds like neither you or your co-founder know how to do this, and that's the problem.
I don't have enough context to understand if the differences between you and your co-founder are unreconcilable, if they are, then maybe the answer is to move on, but if you mostly get along but are just struggling with an extremely uncomfortable and challenging situation, then here are some things to consider...
First off, learn about Nonviolent Communication. If both you and your co-founder are willing to adopt it, that should help you improve your collaboration.
Next, you probably need to cut your burn down to near-zero if you haven't already. Even if you have a decent amount of cash, if you and your co-founder still have enough control to make this decision, lay off everyone that isn't essential to servicing existing customers. If you have no customers, then cut everyone. Cut down to the smallest possible burn you can, to give you the most possible runway.
Then, address your complete lack of market research skills, either by committing wholeheartedly to learning how to do it yourselves, or by finding a third co-founder who is really good at it. What you need is someone who has a decent grasp of technology trends and value-overhang, and who is very good at doing market research interviews (customer discovery interviews), and thinking through lenses like Jobs to be Done Theory, Outcome Driven Innovation and Design Thinking. When I say market research I don't mean some proctor and gamble quant nerd, I mean a scrappy startup bloodhound. Not all "business people" are built the same, and it would be good for you to ramp up the resolution of your evaluations of people in these roles.
Then you need to come together to pick a group of people to focus on for AT LEAST 3 months. These need to be people you can access and talk to many of, and people who you have good reason to believe are all doing or trying to do very similar things. Read more about jobs to be done theory if you don't know what I mean. Here are some examples: (Startup founders, insurance brokers, nurses, teachers, parents raising two or more toddlers, robotics engineers, etc. - PICK ONE). Ideally you want to pick people who have money to spend themselves, have some authority or influence over how some money is spent, or whose work is important enough that making them more productive would be exciting to people who have influence. For example, elementary school teachers are probably not as attractive as a market as university professors, and private school elementary teachers are probably better than public school.
If your founder is sensitive about engaging in this process without certainty that you will find an opportunity that's big enough to justify the VC investment, then consider focusing on a group of people like described above with high economic leverage (e.g. fintech CEOs, data-center architects, etc.) ~ focus on a set of people doing similar things close to where the money is flowing fast.
Once you pick the group of people, you need to resist the urge to come up with any product ideas. Your next step isn't to ideate or innovate or whatever, its to go and empathize with the people. Get really fucking curious about what the people actually care about. Find a way to not want them to have specific wants. Read this again: Set yourself up to be curious about these people's actual wants, while not wanting them to have certain wants. It's way more fun to talk to people this way, you won't have the tension of "I hope they validate our idea", and they will enjoy talking to you because it will feel like therapy to them if you do it right. Ask things like "What's the most important thing to you that you are the least satisfied with?", and "What else?", "if you could wave a magic wand...?", ask follow up questions, "has anything changed about that recently? Is it getting worse? How does it work today? Why does it work that way? How important is that step?, etc.", make sure you understand all their answers. Listen actively. Stay curious. Empathize.
Consider reading The Mom Test.
You will be better off paying the targeted interviewees hundreds of dollars to spend an hour talking to you (2-3x their hourly salary), than spending that money on employees helping you flail around. If you can get their time for free, great! Once you start targeting a specific problem, it makes more sense to not pay for their time, since the chance of solving the problem can become the new motivation for speaking with you.
After you have talked to ~30 or so people like this, you are fairly likely to spot an opportunity (You have also started to develop a very valuable skill). What you are looking for is something that a decent segment (e.g. 30%+) of the sample consider the most important thing they are trying to get done that they are the least satisfied with, or at least in the top 3, and that you think you can make a huge impact on with some emerging tech. Whatever you do needs to genuinely seem 10x better from the customers perspective, because the new benefit has to be worth the risk of spending time and money on something unproven / doesn't exist yet. The best opportunities will come from when you can re-frame the problems they are struggling with and understand them better than any one of the people you interviewed, because you got some unique perspective from talking to many people. Just don't rush this, because it has to be grounded in the reality of their existing values.
After you gain the insight and have designed a new approach that you are highly confident at least a handful of the people will be excited about, go back to them and validate it. Ask the hard and scary questions (now with all that validation tension again), that they can and will pay money for it, or fight hard to get other people to pay for it, etc. If you did everything right up to this point, at least a handful of people will start pulling the product out of you.
When you reach this point, at least 90% of the problems you described will be gone and you will have new (slightly better) problems. This is startups. <3
If you can't bring yourself to do something at least close to what I described above, then you're probably better off moving on, since the odds of succeeding from your current situation by pure luck is near-zero. That said, I encourage you to take the courageous and responsible path if you have it in you, the world needs more of it, and you will grow a lot from it.
Sincerely, FloorEgg