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New Zealand’s Startups

How to resolve co-founder conflict

Conflict between co-founders is a major source of startup failure. How can you avoid it happening to you?


Caitlin Sykes

Angel Association executive chair Suse Reynolds

Shaun Edlin occupies a unique position among the co-founders of Dotterel Technologies. The other three – Matt Rowe, Shaun Pentecost and Seamus Rowe – are brothers.

But he clearly doesn’t feel on the outer.

“I think they, and I, just consider myself the fourth brother,” says Edlin, who is also CEO of the company – a global leader in enabling audio in high noise environments and developer of unique microphone array technologies.

In fact, Edlin likens the relationship between startup co-founders more generally to that of family.

“When you're in a family, you're going to be able to have those really brutally honest conversations with each other. You're going to be able to go to each other when times are tough, which happens all the time – you're constantly presented with problems and challenges – and take your mask off,” he says.

“That mixture of honesty and dependency I think is quite helpful in conflict resolution.”

The ‘family life’ Edlin describes among Dotterel’s co-founders is a peaceful one, but he says some degree of co-founder conflict is inevitable in any startup.

“While we've had our fair share of disagreements as founders overall, I can't think of any conflict where things have got personal or people have stormed out of the room or we've just started hating each other,” he says.

“But being somewhat connected to the startup ecosystem here in New Zealand and then working for many years in the various startup co-working spaces, that does actually happen quite a bit. I remember hearing something like nearly half of startups fail because of internal team dynamics and conflict, and I totally believe that.”

Some figures paint tension between founders in an even more-corrosive light. Noam Wasserman, author of The Founder’s Dilemmas, for example, has noted that 65 percent of startups fail due to founder conflict.

Dotterel co-founder Shaun Edlin

It goes with the territory

Suse Reynolds, executive chair of the Angel Association of New Zealand, says a healthy starting point for co-founders is to accept that a certain amount of conflict is natural in startups.  

“There's always going to be conflict and challenge and fear and anxiety because that's just what comes with aspiring to create outsized impact and value,” says Reynolds.

“But it's not a bad thing that there's conflict. We have all this judgy stuff about things like fear and anxiety and conflict, like it's a bad thing. But it's just a thing, so it's alright when it bubbles up – of course it's going to happen.”

She says some common sources of co-founder conflict include disagreement over recognition, remuneration and equity split, as well as strategic direction – grappling with the ever-present stress of balancing how fast you can grow with how much money you can spend.

Then there are more personal factors like differences in personality, leadership and communication styles and levels of self-awareness among co-founders that “in startup land.. are quite often dialled up to max wattage”.

Put yourself in the other’s shoes

Edlin says in Dotterel’s early days the co-founders on occasion would need to pull each other up when they would fall into the ‘founder’s dilemma’ trap of wanting to do everything themselves. That, however, has naturally dissipated as the company has grown over time along with the realisation that approach isn’t scalable.

And he agrees that communication styles can also be a general source of tension between co-founders – not necessarily because one style is better or worse, but simply because they differ.  

“While you all might share the same mission, which is usually to change the world in some way, you're also all fundamentally different people. For me, a big understanding is just that we're fundamentally different people with fundamentally different thinking styles and sometimes, therefore, you've just got to take a step back and try and see it from their very different perspective.”

“Most people who start tech startups are quite competitive by nature; they'll just argue. On a personal level, I sometimes have to stop myself if I realise that, am I actually arguing for a resolution based on a rational decision or am I arguing just to win the argument?”

Kami co-founder Alliv Samson

The idea is the winner, not the person

The ability to argue the point, not the person, has been a key to resolving conflict at Kami, says its co-founder and chief growth officer Alliv Samson.

Kami started life a decade ago as a last-minute entry by Samson and fellow Auckland University students Hengjie Wang and Jordan Thoms into the university’s Velocity entrepreneurship programme. They connected with Kami’s other co-founder, Bob Drummond, when he mentored them through the programme.

Samson says the most common source of conflict between the edtech firm’s co-founders throughout the years has been technical decisions “because there's always a lot of technical decisions that have to be made and it's mostly trying to weigh up the pros and cons of whichever we're going to decide on”.

Wang and Thoms were debaters at university, notes Samson, and the best friends and software engineers are known to argue every angle of a technical decision to arrive at the best solution. It can be “exhausting” she says, but it’s about arriving at the best possible outcome for the company.

“Conflict for us is always trying to argue which one has the best solution or what is the best decision we should make,” she says. “Whoever wins, it doesn't matter, because we know that it’s not the person who wins, it's the idea.”

Like Edlin, Samson uses a family analogy when describing the relationship between co-founders, likening it to a marriage. In Kami’s case it also carries a literal meaning: she and Wang are married. 

“We always joke that finding co-founders is like finding someone to marry…you want to commit to that person,” she says. “That really helped us to be where we are after ten years; we're not divorcing each other.”

Samson says guidance offered through Velocity and Drummond, as well as early investor David Russell, helped Kami’s co-founders establish a clear, shared understanding early on of basics around things like roles, remuneration and shareholder structure.

What’s also helped, she says, is that the four co-founders have their own “superpowers”, which has helped define their roles, reducing areas of overlap and potential conflict.

Have each other’s backs

Reynolds holds governance and advisory roles with a handful of startups, and says a chair or advisor who can sniff out and head off co-founder conflict early can be an asset, as can a good lawyer. “If you have a really great lawyer on your wing, go and talk to them because they manage things in confidence so you can trust them, but a subtext of their job is dealing with conflict.”

Ultimately, building trusted relationships is key, she says, and founders can consciously invest in this, despite the resource pressures of startup life. One startup she’s involved with, for example, has done some work with consultancy Walk Together that has been “incredibly powerful” for building trust.

“If you want to create value outside the company, there also has to be a very strong sense of value inside the company and what value means and how you go about creating it,” she says.

“Everybody talks kind of flippantly about trust and relationships, but it is fundamental that you’re really rock solid in ‘we all trust each other; we've been in the trenches together”.”

Edlin describes developing a bond along similar lines, aligned with Simon Sinek’s Circle of Safety concept, which fosters a sense of trust and safety within a company’s culture.

“You do the Russell Crowe, Gladiator thing, where everyone locks their shields and puts them together, and you just know that you have each other's back,” he says. “You've got to all get on the same page, in the same line so that whatever disagreements you're having on other stuff, you know that you've got the same approach and an aligned front when it comes to that external challenge.”

Want to read more?

Suse Reynolds recommends the following books to help manage aspects of co-founder conflict:


Caitlin Sykes

Freelance business writer and editor; former NZ Herald small business editor and Unlimited magazine editor

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