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The pros and cons of setting up with a co-founder

The pros and cons of setting up with a co-founder

17 March 2021|Latest Posts, Launching a business, Psychology

The pros and cons of setting up with a co-founder
The pros and cons of setting up with a co-founder

Paul Harrison and Steve Witt are co-founders of The Travel Franchise – which trains people up as home working travel consultants working under the Not Just Travel brand.

They decided to take on the travel world, one of the biggest industries in the world when they were both penniless. They’d both lost everything they had in the Spanish property crash and set up Not Just Travel a day before 9/11. Paul and Steve were so broke at first that they almost fell out over their first commission payment, as Steve couldn’t afford to pass on the money to Paul. 

Now they manage the two award-winning companies with over 800 franchisee family members and staff team based in Bournemouth. The company has survived a global recession, the demise of Thomas Cook and a global pandemic and so know a thing or two about how to build a resilient business. Up until now, they have never looked for investment and are looking forward to the travel boom as global travel bounces back with earnest. “There is so much pent-up consumer demand for holidays, says Steve, there’s a gold rush ahead.”

Paul: “We are both workaholics and so we each have thrown ourselves into our businesses. Never go into business with someone who doesn’t have the same work ethic as you. You don’t want to think “I’m carrying this person” as then it will create resentment and ultimately fail. Similarly, you need to be around the same skill/competency level, otherwise there will be resentment both ways.

Make sure you have different skill sets. You want defined roles so that you’re not competing with each other, or doubling up work.

Steve and I are very much different people. On the outside we are seen as chalk and cheese…He’s the softy spoken posh Southerner and I’m the mouthy one from Liverpool. But in psychometric testing we’re very similar and have the same values.” This is why we very rarely if ever clash as we think very much alike.

Psychometric tests are very powerful and we use them to recruit our top employees. I would say, as a founder, you don’t want to pair yourself with a highly dominant person who will boss you around. You won’t enjoy it and likewise they won’t enjoy you not being so assertive.

PROS

Paul: Being co-founders, we’ve stopped each other making some big mistakes. When it’s your idea, you think it’s a great idea. But the other person has an objective view and can act as a filter. I can have ideas and Steve will pick them to pieces. If you’ve got a great relationship, you’ll thank them for that advice, not resent it.

Steve: It’s all about setting up a business with the right person. You have to be able to trust them. They have to be rational, not emotional. It’s never happened, but genuinely, Paul and I could have a stand-up shouting match one day, and be back to normal the next day. 

Paul: In the early days, as a small company, you can talk things through quickly and make good decisions fast. It’s when you grow and take on more people that things become slower and more difficult.

Paul: Branding as a duo is also much stronger to your community as you are seen as far more stable. It’s not all about one person – your customers can see two people at the helm.

Steve: It can be lonely at the top. If you’re having a rough day you have someone you can trust to talk it through. You can’t do that with your employees as you have to be mindful of the fact that they a reliant on you for their salary and long-term life plans. But having a true peer where you can share issues and worries is absolutely essential. They are also there to give you a bit of a lift when you need it, as you’ve been through thick and thin with them.

Steve: It means you can grow twice as fast as there are two of you working on the business. As Paul says, we are two very different people. Paul is very action-orientated and I’m more considered. I wouldn’t have got half of the things done if I hadn’t worked at Paul’s faster pace, and perhaps he might have made a few mistakes without my questioning.

Steve: With two of you it means you don’t have to do everything yourself. You can set up the company by playing to your strengths. Paul is the sales person and I’m operational. Paul would definitely not thrive in the back-office and I wasn’t good at putting myself “out there” on stage at the beginning. But together we pull each other along in the same direction, through our own expertise and strengths. It also means we get to do the bits of business that we absolutely love.

Steve: With two of you it means you can have more time off, knowing there’s someone you trust at the helm in your absence.

Steve: With the business relationship you also need legal parameters. You have to document your relationship from day one, with agreements in place. It solidifies the relationship, produces a strong foundation and leaves nothing uncertain. Having your business partnership in writing defines your relationship. Often people assume that everything will be fine with their co-founder – until it isn’t. But it means that from day one you know what will happen if something bad heads your way.

CONS

Paul: Co-founding businesses together can break up good friendships. You may be excited to work together at first, but if the dynamics aren’t right and one person is working much harder than the other, then it will fail. The business will fail and that long-term friendship will be ruined. In the past I’ve advised people not to enter into business together as I can see the dynamics aren’t right.

Paul: Working remotely is also harder, if that’s your set up. I work from a garden office called my “posh shed” in Liverpool and Steve works from the head office in Bournemouth. It’s not the easiest set-up but it works. With my background I would never survive in a normal office. Perhaps it works best that we’re not in each other’s’ pockets?

Steve: I think with Paul being located in Liverpool, while, before Covid, the rest of our staff team was in Bournemouth, it sometimes led him to feeling isolated. He was partly removed from the decision-making process and we sometimes forgot to bring him up to speed on things that we take for granted in our everyday office environment. 

Covid has actually improved that and with regular remote meetings and staff catch ups that we call “huddles” via video call, Paul is more included. Prior to Covid we had already invested considerably in the best video conferencing software and hardware. That means smooth connection without any stalling or delays, which can scupper the flow of conversation. Also, when some of us are based in the office, the big screen we have in our meeting room really makes it feel like Paul is in the room with us.

Steve: It’s a relationship that you have to work at. Ours started as a business relationship and now it’s a friendship based on true trust. It’s all about finding the right person to set-up with. You have to have the same shared vision and desire to work. You also have to be working for the same things. If you’re on different levels can conflicting mindsets, it’s not going to work.

Steve: I guess for some people it can take longer to make decisions. You can’t have a business based on the approval of two people, otherwise you’ll grow too slowly or there will be either stagnation or a stalemate. If it takes too long to get a decision agreed, then you’re set up incorrectly. If indecision often exists then that can cause anxiety among staff. 

Steve: I understand with other companies that with two co-founders you can have staff who play each founder off against the other, like kids can do with their parents. If there is a lack of transparency in who’s the boss, then staff can also feel like they don’t know who is the authority with the final say. Paul and I have very clear definitive roles; I look after operations and Paul looks after sales. We can make decisions in our own areas. If there’s anything that else that needs deciding on, we will talk about it and make a decision, or we have great staff who can manage it. 

Steve: What happens if you fall out with each other? Or one of you is incapacitated? You need clear legal documentation so that the other person can take over the management immediately. We have a document called “Bad Day” which says what will happen if something terrible happens to one of us. We also have contingency planning in case both of die – if we are in a plane or car crash, for example. Many business owners don’t think about these plans as they think they will never need it. In fact, preparing these documents forces you to run a better business as you plan for the worst and agree upfront with your co-founder on the future plan. 

thetravelfranchise.com

The social media handles are as follows:

Facebook: facebook.com/thetravelfranchise

Instagram:@thetravelfranchiseuk

LinkedIn: linkedin.com/company/the-travel-franchise/