6 tips on picking legal tech co-founders
Picking co-founders is one of the most important decisions you will make for your start-up. Who you choose will be the difference between a successful venture or not. It is rare that I get serious about topics, but this one warrants it. There is a strong correlation between multi-founder start-ups and success, and the quality of your team is one of the determining factors for whether you get funded, who you hire and ultimately whether you are successful.
Here are 6 things that you should think about when picking a co-founder:
1) Congratulations on the engagement! - You should pick your co-founder as carefully as you pick a life partner. Think 21 questions, a few years of dating or at least some very frank conversations about what your goals, dreams and aspirations are. Play Bigger, the canonical book by Al Ramadan, Christopher Lochhead, Dave Peterson, and Kevin Maney, put the perfect age of a company to IPO at 7-10 years old. Most VCs expect to exit a deal at the 5-7 year vintage. So expect to spend at least that long with your co-founder. And you will be in close proximity the whole way! Start-up life will offer up some of the most terrifying and rewarding life experiences while you navigate the journey together. It can also be catastrophic to lose a co-founder. It’s disruptive to the team, the company and sends a terrible signal to investors and customers. You wouldn’t marry a stranger, take the same approach with your co-founders. Put the effort in early to save yourself later.
2) Diversity, Diversity, Diversity - It isn’t possible to over-emphasize the importance of finding people who are different from you to be your co-founders. Firstly, it takes a large range of skills and personality approaches to get a successful company off the ground, and it is nearly impossible to get all those features into one person (see my article on the personality types of legal entrepreneurs). Even when the team are all experts in the same area, if you have a difference in approach you will get a significant accuracy bonus. For example the best economist is 10% better than the second-best, who is 9% better than the economist behind her. If you were to employ the two best economists on a project your result would be 18% more accurate than just employing the best economist. As Scott Page said about this effect, “It’s not marketing. It’s math.” Leverage that math to your advantage.
3) Each cofounder should be critical to the project - If you can conceivably get your idea off of the ground without that person - do. Find someone else who you cannot live without having on your team. It is crucial that your team is the best possible team to tackle the problem you are solving. It is the single biggest consideration for VCs when choosing to invest. It is also one of the best competitive advantages that exists. Never compromise on quality of your team, this is especially true for your founding team.
4) Get a second opinion - If you have ever hired someone you will have called their references, spoken to people who worked with them and tried to understand whether what you are seeing in interviews is what they will really be like in the role. You should take the same approach with a co-founder. Don’t be afraid to reach out to common acquaintances, friends of friends that you can give you insight into how that person works, and what you can expect from them. Ask your potential co-founder about what they have done before, what specifically they contributed to those projects (who did they hire, who did they lead, what idea’s were theirs and what were the steps they took to execute on the idea). Once you have this information, fact-check, fact-check, fact-check!
5) Is your start-up b2b, then one of you needs to have a legal network! - The vast majority of legal tech start-ups are looking to sell their services to big or small law firms. This sales cycle can be incredibly slow and painful, and crippling at the start-up stage. Lawyers are nervous buyers of tech, and expect a very low level of risk when they purchase. This can make it really difficult for an early start-up to get the necessary promoter who is willing to take a risk and have the start-up do a proof-of-concept with them. One of the most successful ways to short-cut this process is to have deep connections in the legal community you want to sell into. So if you don’t have these, consider finding someone to add to your team who does.
6) Don’t fail to found just because you aren’t technical! - This may be a scandalous thing to say in the Bay Area, but not all tech start-ups need a technical person on the founding team. These days there are amazing low-code resources out there that you can cobble together to get a working MVP to test out your idea. There are Knack, Zapier, IFTTT, Twilio, and so many more that you can use to get started. If you can cobble these together this makes a technical co-founder non-critical (see tip 3). But eventually you will need to hire a technical rock-star to scale you business to the size that you dream, so don’t delay hiring them for too long.
Which tips do you agree with? I would love to hear what you think!