Should You Be Friends With Your Co-Founders?
When I was a kid, I used to really like westerns. Maybe it was because my Dad really liked westerns, so I liked westerns too.
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There was a rather obscure western that I really liked called, “The Culpepper Cattle Company.” It’s the story of young, wanna be cowboy named Ben, and his coming of age on a cattle drive.
Even though I haven’t seen the movie in years, there’s a great scene that I still remember. Ben, the young cowboy, says to Luke, an older cowboy, “Sure is a nice horse. What’s his name?”
Luke responds, “You don't have to put a name on something you might have to eat.”
You don’t have to become friends with someone you might have to fire.
I was speaking with a CEO I started working with about his co-founders. Let’s call him “Ben.”
We were talking about whether Ben's company should add a new potential investor. I won’t get into the details, but it was clearly a bad deal for Ben’s company.
“Why are you pursuing it (the deal) when you know it’s bad?” I asked Ben.
“Because my co-founders think we should be going after it,” Ben said. “And I don’t want to go against them.”
“Have you told them it’s a bad deal?”
“Yes,” he said. “But they still think we should go after it.”
I smiled, and I asked Ben, “Do you want my opinion?”
“Yes, of course I do," Ben said.
“Then you need to step up. You’re the CEO, you need to make the tough decisions. Just take the time to explain why you’re making the tough decision.”
“But they (Ben’s co-founders) are my friends,” Ben said. “I don’t know how they’ll react.”
“Okay, I’m going to tell you a couple things,” I said. “First, they’re looking for you to become the leader. If you don’t lead, then you’re going to continue having problems.
“That’s the easy part of the discussion. The harder part is you can’t be friends with your co-founders, at least not in the same way as before.”
You’re different than everyone else.
“What do you mean?” Ben asked me.
“It goes back to you being the leader. You are not at the same level as they are.
“I’m not saying you’re better than your co-founders. I am saying that, because you’re the CEO, you have different responsibilities. Do you understand what I’m saying?”
“I think so,” Ben said. “I’m the CEO, so I need to act like the CEO, not their friends.”
It really is lonely at the top.
“Exactly!” I said. “And one of the things you can’t do going forward is confide in your co-founders the way you did previously. There’s just too much risk.”
“I know,” Ben said. “That’s going to be tough.”
“I know it will be, but you can’t confide in people that you might have to fire. This is one of the crappy things about being CEO. You literally have no one to talk to.”
The reality is that you are taking a massive risk any time you share your innermost feelings and thoughts with your co-founders. There are a three reasons for this.
The first reason is that your co-founders can take the information and share it with the wrong people. This happens all too often, and it can really hurt the company.
The second reason is that your co-founders will likely not understand the company at the same level as you. They will not likely understand the personnel dynamics or the investing dynamics properly. And you just can't take the risk of sharing what you know with them.
Third, decision making is not by consensus in any well-run company. However, you do need to explain how each decision will be made. In the case of Ben and his co-founders, the decision on whether to pursue an investment was Ben's, not his co-founders. Ben just needed to explain it to his co-founders.
Just like a young cowboy, you’ve come of age when you embrace the role of CEO.
The next time Ben and I talked, I asked Ben how things were between him and his co-founders.
“I took your advice, and I’m surprised, but everyone is following me,” Ben said.
“That’s great!” I said.
“And, I’m being a lot more careful with what I share with them. I know now that I’m doing the right thing because I can see the difference. However, it’s really lonely because I have so few people I can share my concerns with.”