Entrepreneur Office Hours - Issue #70
Common product mistakes, problematic co-founders, and milkshakes
Sure, this issue of Entrepreneur Office Hours has a great Web Masters guest — David Cummings of Pardot — and some helpful product strategies. But those are the kinds of things you’ve come to expect from EOH, right? So what I’m most excited to point you toward is the old article I found in my archives.
The article is called “How Milkshakes Helped Get Me 30% More Investor and Customer Meetings.” It’s a story about one of my better entrepreneurial hacks. Feel free to try it, steal it, or adapt it. Whatever you do, I’d love to hear if you use the strategy and how well it works for you. Let me know!
3 Common Mistakes Entrepreneurs Make with New Products
Amazing products can — and will — fail without the right market positioning. So I brought in an expert in customer acquisition to explain some common mistakes.
The Founder Who Productized B2B Marketing Automation
Calling all B2B, SaaS nerds: You’re going to love this episode of Web Masters with David Cummings. He’s the founder of Pardot, which is now a core piece of the Salesforce Marketing Cloud. If you care about marketing — which, as a person interested in startups, you absolutely should! — this is your chance to hear from one of the true customer acquisition experts who redefined marketing for the digital age.
Listen to the newest episode of Web Masters on:
…or search “Web Masters” wherever you listen to your favorite podcasts.
FROM THE ARCHIVES…
How Milkshakes Helped Get Me 30% More Investor and Customer Meetings
Bottom line: if you’re not interested in sharing a yummy, sugary, lactose-y filled cup of unhealthiness with me, we probably shouldn’t be doing business together.
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Office Hours Q&A
I’m in a team of four co-founders building a startup. We all have equal ownership at 25% each. But one of our co-founders is definitely not as “invested” as the rest of us in terms of how much time and effort he’s putting into the business. We’re all good friends, and we were friends before starting the company.
Our problem is we’re not sure how to push him out or ask him to step back since he clearly doesn’t have time for a startup right now.
We’re also not sure what to do about his equity. Would he still own 25% of the business even if he left? Or maybe is there a way to have him take less ownership while staying on the team and just working less?
Any thoughts or suggestions you have we would really appreciate. Thank you!
A lot of your options depend on how far along you are in your startup and what kinds of contracts everyone on the team has signed, which isn’t entirely clear from the questions you’ve asked. I mention this because, if the company is fairly new and doesn’t have much traction, in a worse case scenario, you could always just shut it down and start something else. Conversely, if the startup has a few million in revenue, your options change. Lawyers might need to get involved, and things could get messy.
Regardless, before anything remotely like those decisions have to get made, your team should start by simply addressing the issues with the problematic co-founder. Have you done that yet? Have you had a frank and honest conversation?
I mention this because, in my experience, lots of founder conflict is a byproduct of misunderstandings. One founder thinks he’s doing the right kinds of things, and the other founder thinks he’s not, but they’re poor at communicating, and the partnership blows up as a result.
Sometimes it’s not even a communication issue. Sometimes it’s just hard to recognize the work other people are doing in a startup because so much of it never becomes something of value. For example, my longtime co-founder and business partner did all the design-related things for our companies. High quality design is something that takes a long time, and that’s not always clear from the results. A simple logo -- something that’s maybe a small graphic accompanying the company’s name -- could take weeks of work. As a result, I’d sometimes get frustrated with my co-founder thinking he wasn’t putting in as much time as me when, in reality, he was working hard to create something truly remarkable. However, since I didn’t fully understand the design process, I struggled to appreciate all the work that went into it. In other words, the problem wasn’t him. The problem was me.
I mention this because I had to learn not to judge “time spent” by “number of assets created.” Those things aren’t interchangeable. Incredibly high quality outputs often take lots of time. Maybe your delinquent co-founder isn’t really delinquent. Maybe he’s just a perfectionist and the real issue isn’t whether he’s working hard enough; the real issue is whether or not you need perfection. Again, this is something that requires a conversation rather than any sort of draconian action. And, by the way, if this is the case, you’ll probably need to have more than one conversation since these kinds of issues related to different perspectives don’t resolve quickly.
However, assuming none of the above is true -- assuming your delinquent co-founder really just isn’t working as hard or as much as anyone else -- then he probably knows that. In this case, an honest conversation is still the next best step. You and your co-founders need to sit down together and discuss the situation.
The conversation won’t be easy, but it doesn’t have to be mean-spirited or attacking or accusatory. Instead, I suggest you begin from this simple premise: a failed company doesn’t do anyone any good. Because of this, your jobs, as the company’s founders, is to do whatever is best for the company, not yourselves.
As you look for a resolution, know that a good outcome is one in which nobody is 100% happy. If your delinquent co-founder walks away ecstatic, it means he probably got more than he deserved. If you and your other co-founders are fully satisfied with the outcome, it probably means you ganged up, exerted your majority ownership, and didn’t compensate the problematic co-founder for his contributions in a meaningful or reasonable way.
In contrast, the “middle ground” is always going to be a little frustrating for everyone. Acknowledge the likelihood of this outcome, make whatever deal or compromise you have to make, and move on as quickly as possible. You’ve got more important things to worry about if you want your startup to succeed.
Got startup questions of your own? Reply to this email with whatever you want to know, and I’ll do my best to answer!