A version of this article was originally published on StartupNation.
Running a successful startup is ultimately a team game—irrespective of whether you follow the single or multi-founder approach. At the end of the day, success depends on how efficiently you allocate resources to solve problems.
At a multi-founder startup, this is an art form.
As one of the four co-founders of Capchase, we were able to experience the benefits of a multi-founder team firsthand, which we turned into a competitive advantage, helping us grow 12-fold since the beginning of 2021 and deliver more than $800M in funding to our customers. Below are some thoughts on what worked well for us, and how these tactics can be applied to other companies just starting out.
There are many inspiring examples of founding teams who were friends first, cofounders second. Luis, Guli and I met each other at Geoblink; Przemek and I met at — and ultimately dropped out of –Harvard, which was another formative experience.
Despite our connections with each other through Geoblink and business school, we didn’t overlap too much until Capchase. I see this as a great advantage because it allowed us to form our own ways of working and define our individual expertise and passions first. Then, when we started Capchase, even though we all had different backgrounds, we combined our strengths to create a product around a central mission: help startups and founders manage their money smarter.
So, let me introduce you to the Capchase founding team:
Przemek Gotfryd (COO): Przemek is our business guru. He’s a numbers guy, great at strategy, we draw a lot on his previous experience advising and investing in the kind of companies who are our target audience today.
Luis Basagoiti (VP of Data): There’s a lot of data that goes into our work, and Luis is the person who makes sure we have the tools we need to understand it all. He takes care of analytics, seeks out blind spots and makes sure we know our customer inside out.
Ignacio (Guli) Moreno (VP of Platform): Guli is the perfect combination of technical and creative. He works with teams from Product to Engineering to Marketing to make sure we’re building our products efficiently and beautifully.
Miguel Fernandez (CEO): As CEO, I’m the all-round operator, spending time across our amazing teams to make sure they have what they need to succeed, making decisions and bridging communication with investors.
I remember Capchase’s initial days when the pandemic was at its peak (in March 2020). It sounds crazy, but we started a business when the world was in lockdown. All of us even met for the first time virtually on Zoom calls. It was tricky, primarily because two of the four cofounders worked in Madrid while two operated from Cambridge, Massachusetts. But the guiding force to overcome these challenges was that we shared the same passion and goal. We found that being on the same page about the mission and knowing what we were all showing up to achieve each day helped us remain focused, even against the odds.
As Capchase grew, we had to shift gears. We divided the work equally. This allowed us to focus on the specific aspects of the business while training the people who were working for us.
That’s when we understood why it is so crucial to have a multi-founder strategy. None of us had to take the entire burden of explaining our business to a new member and answering their every question. Instead, we could compartmentalize and assign ownership of different parts of the mission to different people, letting them build their vision for it and explain that to new staff. One of the most significant advantages of having multiple founders is when you have to train the team, and the benefits of defined roles and distribution of risk are well documented.
Within a multi-founder team, there are a few foundational advantages that are more important than you realize, especially when just starting out:
A single founder is stretched thin by the numerous tasks to tackle when getting a company off the ground. This takes a toll on the founder when the stress levels are high. With more people to share the load, just like four wheels in a car, the challenges become easier to manage, and stress can be transferred and dealt with together.
In today’s context, we saw that the pandemic reinforced that life isn’t perfect and running a business is challenging. Hence, having a team that balances each other’s emotions, intelligence, practicality or prudence becomes crucial in keeping a business afloat in difficult times.
It’s estimated that 20% of startups close down in their first year while 34% do in two years. When an entrepreneur reads such statistics, they are bound to feel slightly nervous. But it is a reality that starting a company is a risk. And you should surely know what you are signing up for before you start. This attitude separates a visionary founder from the many who fail.
For example, in due course of time and unforeseen situations, if one of the founders decides to or is forced to exit the venture, the company’s future is at stake. Having more founders reduces the repercussions. The transition will be smooth and will take place without jeopardizing the organization. Eventually, allowing other founders to fill the gap.
When we started Capchase, it was at a time of uncertainty. None of us knew when things would be normal again. As a result, we faced challenges that tested our patience and commitment as a founding team. Here are some of the most common difficulties we faced:
One of the primary challenges to our business is working from different time zones, especially with our founding pairs operating from different countries (Przemek and myself in the States, Luis and Guli in Madrid). We’re fortunate now to have employees from all over the world, but in the founding team we had to be intentional about bending time to make the international makeup of the team actually work.
The pandemic forced many companies to follow a decentralized approach to getting work done. While it does have its fair share of benefits, managing a team that operates from various locations was difficult in the initial phase. In addition, getting used to the virtual environment took a while.
McKinsey Global Institute predicts that the global workforce will reach 3.5 billion by 2030. Having diverse team members in the company is very unique as they bring in cultural aesthetics, which are essential for the overall organization’s growth. Many companies have realized it, and they are now actively trying to access global talent with a focus on inclusion.
At the same time, language barriers should be taken into consideration. Companies need to ensure that cross-cultural differences are managed, and everyone in the team understands each other quickly and easily.
We learned many things about the business and our partnership from these challenges. These were some of the essential milestones in our journey to become successful entrepreneurs.
Today I can proudly say that we’ve created a unique product for the market. It’s possible only because talented people with unique ideas were on board. So if you are looking for an answer as to whether you should go solo or team up, I would suggest understanding your compatibility first with the potential partner/co-founder and then make the call.
And if you add the unbeatable combination of strong vision, agility and hard work in place, success will surely follow.