Do too many founders spoil a startup?
Establishing a firm with several partners comes with its share of ‘wow’ and ‘ouch’ moments
When the founders of BOHECO (Bombay Hemp Company) were launching a clothing brand, it took them two days to agree on the final brand logo. That’s because the company, which cultivates industrial hemp to make lifestyle products, has seven founders and the decision was taken in a democratic way, with all the seven founders present in one room.
Having learnt their lesson, the team swore never to spend so many hours on the decision-making process. The team is now broken into sub groups and committees. “We realized that if we wait for all seven to be in one room to take every decision, it will be detrimental for the company. So we have empowered the board chairperson and divided ourselves into smaller teams, who are empowered to take decisions on their own," says BOHECO co-founder Chirag Tekchandaney.
Startups in India usually have a co-founder composition of either one, two, three or a maximum of four. Having a pool of co-founders beyond that is a rarity in the country’s startup ecosystem. Does it not help to have many founders in a company who bring with them different viewpoints and ideas?
Let’s take the example of Housing.com. When the real estate search portal started in 2012, it had 13 founders, perhaps the highest so far. But after a tiff between its CEO and an investor went public, the founding team slowly started moving out.
“We all brought complementary skill sets and so we thought if we all come together, we will have the entire stack on Day 1 itself and we could scale fast. And it helped at the time," says former co-founder Ravish Naresh, who is currently the co-founder of bookkeeping app KhataBook in Mumbai.
The common binder
Even though co-founders are mostly friends from school, college or a workplace, in a big co-founding team, there is always one person who acts as the glue and brings together all the members and ensures they share the same business vision. In Housing.com’s case it was chief executive officer Rahul Yadav, who brought together 12 of his college mates to form the company in Mumbai.
At ChuChu TV, it was a no-brainer for the five co-founders, who have been friends for over 30 years, to collaborate. The seven-year-old venture creates children’s edutainment content on YouTube. Since it was Vinoth Chandar’s idea, inspired by his then two-year-old daughter, the other founders didn’t have any problem with him being the CEO.
“But I’m the CEO only on paper. I don’t take any decisions on my own, it is always discussed. And everyone has control over their department. The only time we disagree is during appraisals, where one may want to give raise to a certain person and the other may feel the funds should go somewhere else," says the 40-year-old.
Sometimes, it’s the personality of the person that gives them an edge over the others to take on the leadership position. Like in the case of 1Ramp, an online platform that helps artists and content creators, where Shubhendra Vikram was chosen as the CEO by his four co-founders as he is “more social". They started working on the venture while still in the fourth year of engineering at Indian Institute of Information Technology (IIIT), Vadodara.
To ensure everyone knows what each person is doing, despite clear demarcation of roles, the 1Ramp team gets together every night at their home (all stay together) at 10 o’clock. Each person states what he did that day, what he will achieve the next day and the problems he is facing.
According to Dharamveer Singh Chauhan, co-founder and CEO of Zostel, there has to be one person who stands at the core, who starts off with the idea and remains when everyone else has left.
“I think idea has to at least originate from one person and then it can be a contagious factor that attracts more people. But at the end of the day you will need a strong commitment," says Chauhan, who ran his first startup for three years as solopreneur in 2009.
A major concern when it comes to several stakeholders is making quick decisions. 1Ramp’s Shubhendra recalls how his team had disagreements about the company’s vision.
“We spent a whole week discussing and getting everything sorted. Everyone got to hear each other’s concerns and saw things from different angles. I realized that communication is the most important thing. If someone is opposing something, you don’t know what assumptions they are making, their apprehensions, etc. Once you put everything on the table, then the process of coming to a resolution is smoother," he says.
Transparency in communication is crucial in larger core teams but it comes with its own set of challenges.
Avnish Pandya, co-founder and chair of BOHECO board, believes the benefit and difficulty of having a large core team is the variety in opinions. “The variety comes at the cost of time. Add to that, dealing with different alpha personalities, which leads to taking different routes of conflict resolutions." At Boheco, decisions are taken based on majority votes, with chairman having the power to put the casting vote.
“One thing we have learnt is it’s not about making a right or wrong decision because I don’t think anyone is aware at that point of time. But it’s about making a decision as right as possible once you made it," he says.
While a large core team gives the venture an advantage of having several perspectives, as the company scales, certain roles become irrelevant.
“As the company scales or moves in a certain direction, not all the skill sets will be needed at later stage," stresses Ravish, who was the second person to join the Housing.com team.
Talking about his stint, he says, “Eventually, most Housing.com co-founders were not leading functions. They were involved in new initiatives, and the existing functions at a scale were managed by a professional from that industry," he says, adding: “At different stages, you can have different people, who are flexible, and doing new stuff or exploring new things, filling out critical gaps that you may not have from external hires. And that’s the good part about being a start up with multiple co-founders," he adds. In spite of the team running as a well-functioning cohesive unit, Ravish is not keen on promoting a large co-founding team. He believes it’s better to have small teams because “if you have too many, it’s extra work for the CEO to align as many people."
Zostel’s Chauhan, who remains the only one actively involved with the venture, with the other six having moved on to different jobs but still retaining equal equity in the company, says managing a large co-founder team boils down to a subtle balance of risk, reward and role.
“I think the good part about large founding teams is that everyone on the team realizes that they are irreplaceable. The things to assess are if the team members have known each other for a while and can manage the inter-team dynamics well," says Utsav Somani, partner, AngelList India.
Meanwhile, the BOHECO founders, who have been together for seven years, are busy moving to a bigger office. Pandya says: “If we all have stuck together for seven years, that says something about our bonding and trust for each other. That’s in itself a big win."