Each chapter is made up of essays whose titles complete the following:
Under no circumstances should you...

There’s a phrase that I used to hear all the time when I was growing up. My high school soccer coach (really, every coach and wanna-be manager loves this one) used to say "there’s no ‘I’ in team." The implicit statement is that you can’t do everything on your own, and in fact you need a team to help get to the finish line with a win.

I would like to take that statement one step further, and make it a little more topical given the content of this book. "There’s no ‘I’ in team, but there’s an ‘I’ in ‘fail.’" When you think about what it takes to be successful with a new company or project, there list is long, and most certainly one of them is having at least one co-founder. The needs of the business and the prerequisites for success are too much to bear for a single person.

When considering the applications from potential startups for the Y!Combinator and TechStars programs, both programs will tell you that the ideal size of a founding team is somewhere between two and five people. If you start a company with a founding team of larger than 5 people, you will ultimately end up with a team of less than that number, and most likely lost a few friends along the way.

The reason for this "optimal" size is pretty straightforward. You need to have enough people to balance out the skills of the team, as well as diversity in the views expressed when making decisions, but you also need to be able to make decisions quickly and not get bogged down in meetings. Meetings are the productivity killer.

I can speak from personal experience on this one, since I have been at startups with "proper" size funding teams, and started a company as the sole founder. There’s certainly plenty of truth to the axiom about the size of the founding team, but I think that some of the dogma which gets associated with it ends up obscuring the meta-point, which is that you can’t do everything alone.

There’s a subtle nuance between having a "founding" team, and having "founders." Founders are in it together, most probably equal partners, and make all decisions with equal sway. A founding team is your early set of employees who join on with the prospect of building something amazing, and hopefully getting in early on what could be a big pop.

When I was at AskMe, it was interesting to see how the three founders interacted with one another. There were many closed door sessions, where they would make decisions about funding options, hiring, budget, HR outsource companies…you name it. They each had equal vote and their stakes were certainly more equal to each other than they were to any of the "employees" who were hired on after the formation occurred.

For the most part, this arrangement appeared to work. There was, however, a fatal flaw in the arrangement, but that came down to a personality conflict. While in theory each of the three founders had equal say, in practice this was not the case. One of the founders had a much stronger personality than the other two, and this was further complicated by the fact that he was the cousin of one of the other founders. This strong type personality had a habit of imposing his will on others. I cannot speak for the other two members of the founding team, but only from my own experience working with him. If it wasn’t his way, it was the wrong way. While the team initially had three members, which would seem to be right in the power zone of the appropriate number of founders, it turned out quite differently.

At IMSafer, there was one founder. Me. When I finally got started, and was rounding up the deck to pitch angel investors, I had a couple of guys who I was talking to about coming on-board. Since I had never gone through this very early stage of the process of founding a company, and having only been on the investor side of the table with companies who were raising their second or third round of capital, I brought my own assumptions about what made a founder a founder. To me, a founder was someone who was writing a check to get the company started. For one reason or another, I actually believed that if one person was writing a check to incorporate the company, then everyone had to write checks to get founder’s shares.

During all the meetings that we were having at Starbucks, we spent countless hours talking about market size, opportunity, fund raising strategies, technology solutions, implementation tactics, and all other manner of topics. Does this sound like a founding team to you? In retrospect, it certainly sounds like one to me. Hindsight is always 20-20, so I can see now what a mistake I was eventually going to make. When it came time to pull the trigger and incorporate, I basically had asserted earlier that if a person wasn’t putting in money then they weren’t a founder, and wouldn’t get the founder shares – they would get options only.

I’m not going to lie. I liked the fact that I could write a big check. I liked the fact that I could say I was "the only founder." It made me feel good. Being the low EQ (emotional intelligence quotient) guy that I am, I didn’t see the other side of that coin. I never once considered how that might make my founding team feel. Again, hind-sight being 20-20 and all, how completely stupid of me, right? Here we are making all this progress on starting the company, designing a kick-ass solution, thinking through all the problems, and all I could think about was how I felt.

After we secured the angel funding, and put a proper option pool together, it was up to me to decide what the option package would look like for my employees. Do you see what I just did there? I called them "employees." That’s how I thought about them. They weren’t founders, like me, but employees. All because I wrote a check and they didn’t. I am sure I can spend a few pages on the incredibly myopic view that represented, but instead I am going to fast forward to our first board meeting. One of my board members told me that this had been one of the best first board meetings to which he had ever been party to. I felt pretty good about that until he quickly brought me back down to Earth by pointing out that "you’ve done a lot of good here, but you’re doing a huge disservice to your team by not calling them founders."

That statement hit me like a ton of bricks. My worldview, to that point, had been that in order to be a founder, you had to write a check. It never once dawned on me that the "founder" construct was not a legal one in that regard. In fact, we were operating largely how you would expect a founding team to operate. The only decisions that were made without the team were the option packages and pay. Other than that, we made decisions together and everyone had equal say. On the one had we were operating in the right manner, in that we acted like a set of founders, but on the other hand, I was dealing a huge blow to the team by holding that title for myself. Immediately after that board meeting, we changed everyone’s title on the team of four to "founder."

In the very early days, when I was trying to get through the "Getting Started" phase, there as an incredible amount of stress. In fact, it was that stress of carrying all of these very hard decisions on my own shoulders that caused me to have the entire founding team act with equal say and vote. I found that the stress of that burden was not something that I wanted once we had the early team in place. It was great that I was getting to the right place (i.e. don’t go it alone) but made some stupid decisions based on an inaccurate worldview about what was a "founder."

The strength of that founders bound cannot be overstated. We made it through some tough times with IMSafer specifically because we had such a good founding team. Everyone trusted each other, and we knew that someone on the team was a subject matter expert (SME) on something, and at least one other person on the team was a backup SME. It’s an incredible feeling to be working in that kind of environment, and removes quite a bit of the stress of day to day operations when you know you can focus on the one piece of the puzzle for which you are responsible, but that you can also voice an equally weighted opinion when there needs to be a vote. This strength of team and bond is what gets you through the tough times.

I bring up the tough times and the strength of team so that we can revisit the team at AskMe. When the company was founded, it was 1999, and venture capitalists were falling out of trees. All you had to do was shake one and a VC with a bag full of money fell out of it, willing to give it to any company with “dot com” in its name.

Over the course of the ensuing 18 months, the dot com bonanza was on in full force. My favorite term for that time was that it was a "war for talent." It was a relentless battle to get the very best people that you could get from whatever source, and hold on to them. People were job hopping every 6 months for increased pay and options packages. Everyone was doing well, and many businesses were hiring. During these great times, cracks in a management team can remain hidden and undetected. When things go to shit, however, those cracks explode into a dysfunction which is indescribable.

As you’ll recall, the one founder had a much stronger voice than the other two. To paint an appropriate picture for his ineptitude as a manager and arrogance as a person, he loved to walk down the hall, and tell me “Watson, there’s only 10 people in this company that matter. The rest are completely replaceable.” He didn’t seem to care that he would say this in full ear shot of many employees.

Toward the end of my tenure, my favorite of the three co-founders took a leave of absence. It turns out he was the keystone, because what followed was a parade of departures from the company. The timing was interesting because of the close proximity to the dot com melt down. Orders were drying up. Funding was scare to non-existent. Receivables were getting stretched or outright defaulted on entirely. When the tough times hit, peoples’ willingness to tolerate bad management rapidly declines. This founding team eventually dwindled down to the one founder, putting him in exactly the spot in which you don’t want to be.

Incidentally, AskMe sold recently for a very modest sum, but there was a trail of broken investors along the way, and far more employees, who had what I would call a “not so great experience.”

The moral? You need to have at least two people on the founding team to keep the pressure at a manageable level. Each of the founding team members should have equal vote, and an atmosphere of trust needs to be in place. When things are going well, it’s easy to mask poor founding team dynamics, but when things get tough, and they will, those problems will get magnified. The founding bond that gets put in place will ultimately have a pretty strong directional impact on the future success or failure of your company, so invest in getting the team right sized and empowered early.