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My Co-Founder Quit. What Now? Keep Going.

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My Co-Founder Quit. What Now? Keep Going.

One founder's tale of how his partner disappeared and how he still managed to keep the company afloat. Commonly referred to in the online dating community as ghosting.

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This post originally appeared 28 June, 2017 on hubrix.co.

There's a quote I love from Allen Saunders, often mistakenly attributed to John Lennon:

"Life is what happens while you're busy making other plans."

Founders may heed this wisdom in their personal lives, but sometimes fail to transpose it to their startup. I didn't think I was one of those. I thought my holistically-aligned, serendipity-loving, work-life balance algorithm was pretty good, honed by decades of experience.

Then my co-founder disappeared.

In early April, he went silent. He stopped answering emails, phone calls, text messages. He no longer logged into our Slack or participated in any other way. There was no warning and no explanation. I only knew he wasn't under a bus because he was active on Twitter.

This went on for months. Once a week I would send another email, another SMS, tried to call. Still nothing. Then Hubrix was selected to attend Menorca Millennials, and suddenly we had to resolve this mystery. I was going to pitch 30+ investors over four days, and there would be questions about my co-founder. He couldn't remain a question mark: he had to be on-board, or gone.

Many have experienced an ending to a personal relationship I call the "ellipsis break-up." Your friend/girlfriend/boyfriend doesn't say it's over, they just enter radio silence, like a submarine on a mission. It's up to you to figure out it's over when enough time has passed. It's crappy behavior, but it's understandable. Maybe that person wants to avoid confrontation. Maybe they can't express in words why it's over, they just know it is. Fear makes people do strange things.

In a business relationship however, it's unconscionable, and grounds for civil litigation. This is the first lesson: co-founders, if you must leave, own your decision and say it out loud.

The startup world isn't small, but it's tightly-knit, and bad news travels fast. If the startup you're leaving isn't your last, you're bound to find yourself face-to-face with your former colleagues in future situations. How you handled yourself last time has a substantive effect on your future opportunities.

At Hubrix, we believe in a level of transparency best described as "bare buttocks to the wind." We're not fans of trumpeting our achievements and remaining mum on our failures. That path interferes with learning, and with building trust.

So I share these lessons in the hope they might help others. Some lessons must be lived in order to sink in, but I believe these can be shared and taught. Here then is what I feel I did wrong, and what I did right, when faced with my co-founder's departure.

What I Did Wrong

  1. Didn't have the eyeball-to-eyeball "Are you in?" conversation. Sometimes when co-founders meet it's like magic, and they form a natural partnership. More often, in my experience, one co-founder courts the other. But unlike a sales conversation, in which you need only get to "yes," and a cart checkout or signed contract constitutes a win, onboarding a co-founder requires a more profound form of "yes." A will-you-marry-me level of "yes." That comparison to a marriage is made often, and for good reason. Co-founders embark on an arduous and (you hope) long journey together. I never had the conversation with my co-founder that included questions like "Is this really what you want to do for the next eight years?" or "Are you sure you are up for this, at this point in your life?" If your co-founder doesn't visibly share your level of energy, enthusiasm, and commitment to the project, it's far better to have a civilized, pre-emptive parting of ways than to be blindsided down the road.
  2. Didn't clearly define expectations. The Hubrix decision-making philosophy is simple: everyone makes decisions. The CEO can overrule them or roll it back, and if in doubt, they can ask me to decide (the only exception to this rule is pushing code into production, a special case). But this laissez-faire policy only works if everyone has a clear & shared understanding of objectives. It also doesn't help with operational decisions ("how to do it" vs. "what to do"). In retrospect, I didn't do enough to fold my co-founder's potential contribution into the Master Plan. So when he had time for Hubrix, he wasn't always clear on the next thing to do, or the best use of his time. Nothing will evaporate enthusiasm like a lack of clarity on objectives, that precious sense of "what's next."
  3. Didn't get a written commitment. Usually I'm a stickler for contracts. It's not about trust (well, sometimes it is), but about formalizing expectations. Somehow with my co-founder, I was so enthralled at the idea of working with him, so convinced of his desire to participate, that we skipped that part. Treating co-founders as too much of a special case leads to sloppy relationship management. Partners who trust each other can still have a prenuptial agreement.
  4. Didn't socialize. Your co-founder need not be your best friend; indeed, it's helpful if someone else has that role in your life. But you must have a part in their life, and they need a part in yours, that goes beyond the project you share. Without this, you will both suffer from a kind of tunnel vision about how the other thinks & feels. You need to know the basics of each other's lives, and to have at least a passing acquaintance with each other's friends and family. Without this, you will not be able to get a read on them at crucial moments — for example, sitting with a bunch of investors, a difficult question comes up, and you can neither speak to nor text each other. That kind of telepathy never develops if all your interactions are work-related. It cannot be planned, forced, or rushed.

What I Did Right

  1. Circled the wagons. I had a hunch my co-founder was avoiding me specifically, so when it came time to "extract" a resignation statement, I asked everyone at Hubrix to contact him. That worked, so I didn't need to activate my "Plan B," which was to contact our common friends and acquaintances to ask them to reach out to him. Some responses, particularly uncomfortable ones, are best obtained by thinking a bit about who is the best person to ask the question.
  2. Acknowledged my anger. Most business decisions require setting one's emotions and personal feeling aside. But one must first acknowledge those feelings. Otherwise it's just denial, which leads to feigned objectivity — worse than making a purely-emotional decision. I was furious at my co-founder, and I still am: for leaving, but above all for the silence, and forcing us to hunt him down to get a reply. Facing and processing that anger were necessary if I wanted to deal with the situation rationally.
  3. Vesting. From the get-go the deal with my co-founder was the same vesting plan offered to everyone at Hubrix : one-year cliff, three-year vest. Only he was to get a lot more shares than the others. When he left, he held no shares in Hubrix, so it had zero impact on our cap table. It will be difficult for us to recover from his departure: it had operational impact, and it hurt our credibility. But if he had left holding shares, we would have been dead in the water.
  4. Tied it off clean. Once we got his confirming email, I quickly drafted a one-page agreement for my ex-co-founder to sign. The agreement asserted Hubrix owes him no money, and owns all intellectual property created by him in the course of his tenure. It also required him to erase or delete all Hubrix-related documents in his possession, and all Hubrix references in his online and social-media profiles. Lastly, it reiterated his non-disclosure obligations. As soon as he signed that agreement, I removed all references to him from our Web site, online profiles and public-facing documents. He did the same for all his online profiles. Poof! In our final collaborative effort, we had formalized his disappearance, and protected him and Hubrix from any future claims or misunderstandings.

The Most Important Lesson

The single best decision I made in the wake of this situation was: keep going. Hubrix will not be the same without its original co-founder. I still believe, had he stepped up, he could have made a splendid contribution to our success, and to our culture. But I took a long hard look at what we've accomplished so far, and what lies ahead, and with delight (and, I admit, some surprise) I realized: Hubrix had already become something bigger than just one person. And my co-founder's departure didn't substantially change our timetable for our first product. So, avanti. Rule of thumb: if it didn't kill your startup, get up and keep going.

10 Lessons Learned

Here's a recap of the 10 Lessons Learned from this post, for busy people:

  1. If you gotta go, say so. If you're a co-founder and you want out, don't be a puddle of uncertainty. Own your decision, and communicate clearly to those affected by it.
  2. Get a strong-level of buy-in from your co-founder(s). Rule of thumb: "will-you-marry-me" Yes (ring and bended knee optional).
  3. Clearly define expectations. Founder types tend to be highly autonomous, but you still need to sort this out.
  4. Write it down! Jointly draft a "pre-nup." You can always amend it later, but it will be a useful touchstone.
  5. Know each other as human beings. Being a human being first, and business partner second, is mission-critical. You can't really plan this part, but you can't skip it either.
  6. See the Whole Team. If something goes wrong with your co-founder or the relationship between you, the rest of your team or your shared social circles can help defuse the situation. But you've got to ensure those professional and social ties exist, and that you have access to them. Rule of thumb: "He won't listen to me. You try talking to him."
  7. Own your emotions. There's no such thing as a purely professional / rational relationship. If you stay alert to how you feel, you can factor that into how you think. And from that, into what you do.
  8. VESTING. Not optional. Co-founders' equity should vest like everyone else's.
  9. Separation / Exit Agreements. When someone leaves, it's helpful to formalize and remind all parties of any short-term and ongoing commitments that result from the separation.
  10. Keep Going. Calmly, coolly assess the impact of losing your teammate. If it's not a lethal blow, by all means, stay chill and carry on.

Thanks for reading, and remember:

  • Gratitude is currency.
  • Karma is a boomerang.

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Topics:
start-ups ,adversity ,cofounder

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