Startup Founders & Risk
Real Life Sciences (RLS) failed for many reasons. The tech team consisted of me and one of the co-founders. (And for the first few months it was just me.) The tool we built was functional, but not spectacular. We used a lot of tech we weren’t familiar with, which slowed progress. The team was distributed across four cities, and none of us had experience working remotely. Consequently, communication was poor. The only funding came from a family member of one of the co-founders.
But I think the biggest reason for failure was risk imbalance among the founders (and me).
I was initially brought in as a full-time consultant to build the first version of the product. At this point, the four co-founders were all working part-time in various capacities. After a few months, the technical co-founder lost her day job when that startup went under and she shifted over full-time to RLS. Two other founders were working on finding funding and the fourth founder did… something. I never was quite sure what he did.
At this point we had four founders in the following situations
- The technical co-founder was working with me full-time building the product.
- The two business/sales co-founders were working with our alpha customer and trying to secure funding, but only part-time.
- The fourth co-founder was doing… something.
We were now in a situation where the people responsible for securing funding had little to no risk compared to the technical people. Both of them had good jobs and no incentive to quit them. It’s unclear what level of success would have even been required to bring them in full-time. I’m not blameless either. I enabled the situation by continuing to work for equity after the money ran out. It doesn’t matter how much of the pie you own when there is no pie.
I know it is almost impossible to be part of a startup where all co-founders take on an equal risk. There are too many circumstances outside of work for that to be possible, but don’t make the same mistakes I made. If you see a situation where the risk is extremely lopsided, bring it up. And if nothing changes, look for your exit.