Why trust beats skills in a cofounder

The 17-year-old, nerdy South Asian girl's face crumpled. She stood up in my office and asked an awkward question:

"Every startup founder we've met with so far told us founders need complementary skill sets. But you, Nick and Chris are exactly the same! Why?"

Chris AMos, Jesse PUjji and Nick SHah. AMPUSH. Those were the names of the three founders from my first company.

The three of us met at a high school summer program held by the Wharton School at Penn, where rising seniors join a month-long business camp.

Every year after we formed the business, we hosted a group of students in our office in San Francisco. And every year, we'd get the question above from astute youngsters. (This was ten years ago, by the way, so this woman has probably already raised $100M from A16Z!)

But, her question was fair. Let me share how I answered it, and then share a bit more of my thinking around a founding team.

My answer was and is:

Co-founders you can trust are MUCH more valuable than co-founders with complementary skills.

What does “trust” mean?

I don't mean that they won't rip you off and kick you out of the company — that's a given, and a very low bar.

Building a company is one of the hardest things someone can do. It challenges you emotionally, physically, intellectually, and in many, many other ways.

Trust means:

• Will this person have my back?

• Are they looking out for me (or only themselves)?

• Are we aligned on the same goals?

• Can we work through conflicts productively?

• Do they communicate well?

I’ll give you an example.

In 2014, I was a raw and sometimes reckless CEO. My co-founder, Nick, was the "softer, more approachable one."

One time, a group of employees pulled him into a conference room, complained about me and even goaded him into taking over the company!

He listened to them, took their feedback and then essentially said he was behind me, and explained why they should be, too.

We worked through the issue, and things were great. But imagine if he had been self-serving or even cowardly in that moment?

So my take is: of course, IDEALLY you want to have people with complementary skill sets (more on that below), but if you have people you can trust (especially in your first company) who have overlapping skills, that's OK and, frankly, better than "building a team" with people you barely know.

The truth is, after the first year or two, founders wear a ton of hats, and very few relate to their specific area of expertise. 

Instead, having a group of people who are thought partners, who are aligned with you, and who care goes a really long way.

Implicit in my POV is that you should co-found or partner with people whose work you’ve seen and tested their mettle in action.

Think: classmates, coworkers or community members.

See their speed, how they do under stress, how they communicate. This is hard to “microwave.”

This newsletter is another one of my "Journal In Public™” pieces.

I've had the benefit of starting five companies in the last four years.

I think we've made some mistakes. We put very little money into each company (<$500k) and we brought ONE person on as CEO and founder in our companies.

The goal was "super bootstrapping!" What it led to was, often, that one person got overworked. Nak, Adam and I got pulled into the company.

This was unsatisfying for all parties. The CEO didn't have all of our time, and we felt spread thin. Ultimately, we had to backfill ourselves, or the company felt the pinch.

Here's what I think is a better founding team:

Three people.

I actually think having one clear "CEO"/main equity holder is ideal. Clarity in decision-making and building really helps things move quickly. 

Assuming there's trust built in the group, we DO want a complementary team.

That team would look like this:

• One sales/marketing "GTM" person — They think of customers, know the market, pitch, write copy, etc.

• One product/tech/delivery person (depending on if software or services) — Essentially, someone who can make sure the customer is happy "post-close" and deliver what was promised.

• One ops/admin/finance person — This person keeps the trains running, keeps things organized, runs the sprints, handles the chaos and organizes it.

Frankly, any of the three can be the CEO, but the GTM is probably my first pick, then product, then ops.

I think GTM more naturally lends to customer-thinking and being the external face of the company. But I think any of those "profiles" can be CEO, as long as the other two are there.

I think this group and size can sort of accomplish ANYTHING as a team and can run independently. I also think it provides enough "volley" and thought leadership.

If one of these three legs of the stool is missing, progress can be derailed:

• No GTM? New business is slow

• No product/delivery? Churn is high!

• No ops/admin? Everything becomes a mess, leading to one and two above

Going forward, this is how we will build teams at Gateway X, our venture studio. It’ll increase our chances of building successful companies!

Like I said, this is a "Journal In Public”™ email. So if you have any thoughts about our direction, hit reply and say so. My team and I read every response we get.

Have a great week.

jesse