When I suggested this topic to my co-founders they asked if I was trying to send a message. Guys, if you’re reading this, I am. Not because I actually want to kill you, but because the numbers speak for themselves and I don’t want to become a statistic.

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Of the 90% of startups that fail, about 65% do so because of co-founder conflicts and interpersonal problems*. In other words, if you can figure out a way to avoid conflict then you’re fine. But given we’re talking about irrational and unsensible founders, this seems unlikely.

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Founding teams need better, more practical ways to prevent and importantly, resolve conflict once it inevitably rears its little head. Because it will. Because we are human.

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First things first:

1. Get on the same page. Deal with the worst-case scenarios first in your co-founder agreement

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Signing your first agreement together will feel like a pre-nup. And it will take you longer than you think it will. You’re bright-eyed and bushy tailed so getting uncomfortable with worst-case-scenario planning isn’t something you feel like prioritising over your sales pipeline. But it needs to be done.

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The more specific you can be in the agreement, the better. One way Ockham Technologies addressed this was with series of ‘If, then’ statements.

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For example:

If Founder Z ends up working part time, then equity split will 50/30/20. Or if Founder Z joins full time, then the equity split will be 50/25/25.

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You’ll need a lawyer to ensure it all checks out, but as a minimum make sure you document:

• Each founder's role and responsibilities
• Explicit expectations about time commitment and work style
• Clear frameworks on how decisions will be made for key business areas
• Definitions of good and bad leavers
• How equity will be distributed and if any vesting will be applied to the shares
• A timeframe to review the agreement

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2. Nurture your founder relationship like a marriage

Couples therapy for founders is a thing and it’s not hard to see why. The prenup comparison doesn’t end at the founder’s agreement.

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Once you’re in business together, there’s implicit trust that you’re committed to building something together. But like an actual marriage, you don’t just get married and then kick back with the marriage certificate. Good partnerships need to be nurtured.

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‍‍Be disciplined with communication and document important decisions

As any married couple will know, this is an extremely easy ball to drop. The best antidote is to be disciplined with staying in touch; particularly if you’re a remote team. Hold weekly strategic discussions separate from operational meetings and create space to simply check in with one another. ‍

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‍Call out the red flags to avoid issues escalating

Passive-aggressive communication, avoiding important discussions, unilateral decision-making and decreased transparency about activities or decisions are all red flags for potential conflict. At Unsensible, we include ourselves in our radically transparent approach to our work. If something doesn’t feel right, call it out. Do not let things fester.

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Set boundaries and manage expectations

Establish boundaries between personal and professional interactions - define working hours, respect each other’s decisions in their respective areas, maintain separate networks and mentors. This helps maintain a professional environment and reduces the risk of personal conflicts spilling over into the business.

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3. Create your own mediation checklist (and know when to call in the experts)

I’ve not yet come across a situation where a checklist doesn’t help. Sorting out conflicts is no different. When disagreements arise, you go to the checklist and follow the protocols, which should give everyone the opportunity to feel heard.

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• Focus discussions on data and business impact
• Use a structured decision-making framework for major disagreements
• Agree on when and how to involve third parties (advisors, board members) as mediators

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That said, a checklist with protocols is not a miracle cure.

There will be times when a third-party mediator will be more effective and efficient at getting everyone to a happier resolution - either communication has broken down completely, you can’t get to a resolution despite following your checklist or your business performance starts to suffer.

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*This figure largely hasn’t budged since it was first published in a study of founding teams more than 40 years ago and subsequent research by former Harvard Business School Professor, Noam Wasserman.

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