Problem
Tim had heard that the entrepreneurial journey is a difficult trip to travel alone, and that having a cofounder can help you get through the toughest days of the roller coaster ride. He decided to cofound with Brian, who agreed enthusiastically to dive in with Tim. "Great, we're off and running!" The two dove into more fully developing their plans. When it came to the music database, Brian had some creative enhancements to the way that Tim had planned to break down each song. They had several disagreements about how to build the team of musicians they would recruit to analyze and log each song, but they resolved most of them and deferred decisions about the most contentious issues. (Tim was hesitant to push his opinion too strongly because he didn't want to take a chance on souring his relationship with Brian.)
Several of their decisions were dependent on how the database would be set up technically, an area that was outside of each of their domains. They did know that the database would be the "brains" of the company and that it was critical to design it correctly from the beginning or else all of their early work might be for naught.
Given that, they decided to find someone who knew the technology and could guide them in that area and started compiling a list of questions to ask that person. By the end of their second session together, the list was quite long. At their first meeting with a potential investor, the investor's first question was, "Who's the CEO of this startup? Who is in charge?" Tim and Brian looked at each other with a surprised look on their faces. "I guess we're both CEO," Tim stammered. "What happens with the two of you don't agree on something?" "We'll keep discussing it until we come to a decision. We're equal partners in this." "When that slows down the company because you each care about the decision but still disagree, what will you
do?" "We haven't discussed that yet. But I can assure you that we cherish our relationships with each other and will make sure that any disagreements will be resolved quickly and amicably."
"Next question: You did mention that you're best friends. What happens when one of you isn't able to keep up with the growth of the company and is underperforming and hurting the company. Will the other one be able to tell him that he has to take a demotion or leave?" "We're sure we'll both be able to keep up with it - that won't be a problem." "When we were discussing how you make decisions, you said that you're equal partners for making decisions. Do you both own the same amount of the company, too?" "We didn't realize that we needed to discuss that yet; thank you for letting us know about it. We'll discuss it."
"Final question: You opened your pitch by calling yourselves an Online Music Company. I see where you'll be great at doing the music part of that. Who will be doing the Online part - developing the technology - and who will do the Company part - bringing the business knowledge needed to make decisions and execute them?"
"For the technology, we have been getting advice from someone Tim knows, and might outsource the database development to a firm that did that for another friend of ours. For the business knowledge, right now, we're just doing what seems right in each area, and are doing okay so far."
"Great to hear it. However, it sounds like you still have a lot of work to do before you'll be ready to talk seriously with any potential investor. Please let me know when you have answers and then I'll be happy to meet with you again!"
Although some of those questions were new to Tim, others had occurred to him but he had been hesitant to raise them. Thanks to the push from the potential investor, he now felt more comfortable bringing them up with Brian. As they walked out of the meeting, he committed himself to getting answers to those questions as soon as possible.
A. There are many pros and cons to Tim's decision to cofound with his best friend. From a Relationships perspective, what are the three most important pros and what are the three most important cons?
B. Are you worried that they don't have answers to the investor's questions? Why or why not?