Like many things in life, starting a business is a lot harder to do by yourself. In fact, not only is it harder, frankly it’s a lot less fun. That’s why we have co-founders! But how do you choose who to work with? What should you look for in a co-founder? And what should you avoid?

What Co-founders Bring to the Table

Before we discuss the traits that make for a good partner, let’s first look at some of the benefits of having a co-founder. Because there are some drawbacks. One in particular stands out: having co-founders means giving up a share of the ownership pie.

To counter this, your aim should be to find co-founders that bring enough to the table that it mitigates the loss in ownership. In essence you are looking for people who through their contribution will make the overall pie larger, so that a lesser share of this bigger pie is actually worth more than the whole of the original. (more…)

A useful classification of online startups is to put them in two groups: Scale-First and Monetize-First. The first type is all about getting as big as possible, as fast as possible and then figuring out how to make money from the market. This Scale-First approach requires an often significant amount of capital to fund until either monetization or acquisition occurs. The other is about producing income as fast as possible and then using that cash flow to grow larger. This Monetize-First approach tends to be slower but comes with far less risk.

In his post Are you a Seesmic or Balsamiq Entrepreneur, blogger Jeremy Chone gives a good roundup of the pros and cons of both these approaches, using two well known startups as examples of each. Of course a brilliant example of the Scale-First approach is Google, who for a long time had a big question mark hanging over them regarding their business model. If you flip back to December 2000, you’ll find BusinessWeek published an article that literally had the words “But how will Google ever make money?”

Personally I fall most definitely in the Monetize-First camp. I like a business to be self-sustaining as soon as possible, and that means you need to have a clear plan from the out-set about how to actually make money. In startup literature this is called a business model and this post is all about finding one! (more…)

There used to be an advert on TV back in Australia for a shampoo brand called Pantene. Like most ads of its type it focused on shots of women whooshing their hair about glamorously while promising softer, silkier hair. As a person who doesn’t have much hair, about the only thing I found memorable about the ad was the slogan they used, “It won’t happen overnight, but it will happen!”

It’s a great sales pitch as it ensures customers have to buy a product for some time before they might possibly come to the conclusion that it’s not right for them. But more than that it’s just a great line, and this is proven by the fact that if you say those words to pretty much any Australian they’ll start whooshing their own hair about … well maybe not, but they’ll most likely know it’s from those Pantene ads.

I think the reason the line resonates so well is it’s a great descriptor for a lot of things in life besides the potential of adding shine to your hair. It’s the kind of sage advice you might give to someone battling away at a problem or setting out to do something difficult. Personally I’ve always thought it seemed to fit rather well with starting websites. (more…)