The Insider Guide to Avoiding a Co-founder Breakup
The complicated art of finding your professional soulmate finally has a roadmap
The screaming match was so loud you could hear it from the conference room two offices away. Drybar CEO John Heffner was trying to close a multi-million deal with investors, but he had to embarrassingly extract himself from the meeting, walk over to his co-founders’ shared office, and ask them to hush.
The inspiration for the epic fight? Red wine.
Let’s be clear: No one was drunk. It was 2016 and Alli Webb, a co-founder of blowdry chain Drybar, was furious when she learned that the then-seven-year-old company’s new Las Vegas location — its 63rd outpost, and its first with a full bar — would offer red wine. She had specifically banned it from her other locations for one very good reason: It was too messy. Her older brother and co-founder Michael Landau, who tended to defer to his sister on all things creative and hair-related (he’s bald), didn’t understand the fuss. It’s a full bar, of course it has red wine, he thought.
“Somebody has to have the final word, and it’s mine,” yelled Landau, a former corporate marketer. Eventually Webb backed down. But even as her brother describes the incident some three years later, she can’t help but interject: “Let’s add to that story that the red wine went in, and it never sold.”
The red wine fracas was a rare moment of discord for the siblings, who have since managed to build a business with $100 million in revenue that’s on track to hit 150 locations by the end of the year. But the argument triggered some baggage — sibling baggage — dating back to when the pair ran clothing boutiques together in South Florida some 20 years earlier. They fought so often and so bruisingly that when they first announced they were teaming up again to start Drybar, their parents responded: “You guys are out of your fucking minds.”
Whether co-founders are bound by blood like Webb and Landau or thrown together by matchmaking VCs, co-founder relationships are incredibly high stakes. Co-founder conflict is responsible for the failure of 65% of startups, says Harvard Business School professor Noam Wasserman, in his book, The Founder’s Dilemma. Oftentimes each co-founder thinks they are acting in the company’s best interest, but “it’s very easy for each to start thinking the other person is undermining them,” says Howard Scott Warshaw, who worked in startups for 25 years before becoming, as he calls himself, the Silicon Valley Therapist. “Then you get to, ‘How did I ever get involved with this person in the first place?’”
From Steve and Woz (as in: Apple’s Jobs and Wozniak) to Google’s Larry Page and Sergey Brin (who first met bickering through a Stanford campus tour for doctoral students), many of history’s most successful companies were built by odd couples. There are also no shortage of instances where co-founders were shoved out the door — Facebook, Snapchat, SoulCycle, Tesla. Why some of these unlikely relationships flourish and others implode comes down to a mysterious set of factors.
“People want to think about co-founders clinically, like, ‘Oh, it’s just business, it isn’t personal,’” says Warshaw. “But you’re fooling yourself if you think people who feel their entire financial future is riding on this, and they are giving up their lives — a level of commitment that could cost them their marriage and family — for it to pay off, are not going to get personal.”
For anyone shopping for a co-founder, here’s our guide to pairings — the blissful, the bizarre, and the disastrous.
Who they are: Before Ben & Jerry were synonymous with ice cream, they were seventh-graders who met running (more slowly than everyone else) around the track in gym class. Bob Hewlett and Dave Packard — both Stanford engineering students — became besties on a two-week camping trip. The Airbnb co-founders were roommates who met via Craigslist in San Francisco, before building what’s today a company valued at $38 billion.
What makes it work: Trust, in-depth knowledge of how hard (or not hard) someone works, and their particular style of brilliance. Brian Jeong and Phil Wong, the founders of three-year-old men’s grooming startup Hawthorne, met in seventh grade and practically became roommates in high school. (Jeong, who lived in Queens, would often crash at Wong’s parents’ Manhattan apartment.) Now Jeong, the checklist-loving finance guy for whom “vacation” is a total of two days off, doesn’t freak out when Wong, the creative, disappears abroad for three weeks to unplug. Understanding each other’s rhythms is mutual. Says Jeong: “I remember I’d give him legal documents at the start of the company, and he wouldn’t read them. He’d sign them and he’d be like, ‘I trust you.’”
Why it can fall apart: The qualities that make someone a good friend, like being easygoing, don’t always translate to being a good business partner, says Warshaw. In a friendship, if you go along with your pal’s choice of a movie and it doesn’t work out, you’ve only lost two hours of your life. But when you’re business partners, the wrong choice “is possibly failure of life goal,” as Warshaw puts it. This can put the partnership on a collision course, with the easygoing one feeling like they’re not being heard, while the person used to making decisions “is like, ‘Oh, you don’t trust me anymore,’” Warshaw explains. “It can get ugly.”
In the Founders Dilemma, Wasserman notes that friends are also more likely to dodge tough conversations about what’s going wrong — until issues fester and blow up. Consider the case of Del Toro, a Miami-based men’s shoes startup. Three prep-school buddies started the company, but things quickly went south because everyone wanted to be “the sexy front guy, and no one wanted to do the heavy lifting or grunt work,” says Matthew Chevallard, who became CEO after “exiting” his two friends. (He doesn’t speak to them anymore, and neither responded to Marker.) In 2017, the company was acquired by a group of investors and Chevallard is now starting a new shoe brand. By himself.
The Star and The Brain
Who they are: One is the charismatic frontman, while the other is the heads-down operator, working on more earthly demands, like building the product or the company’s workflow. Think Jobs and Wozniak. More modern day versions: Andy Puddicombe, the joke-cracking, ordained Buddhist monk who co-founded meditation company Headspace, and CEO Richard Pierson, a (formerly stressed-out) marketing exec who turned Puddicombe’s soothing voice into a big business. Or Away luggage’s chief brand officer Jen Rubio, who scores tons of press coverage, and her lesser seen counterpart, Steph Korey, who happens to be the startup’s CEO. “We’re just completely left brain, right brain,” Away’s Korey has said of Rubio.
Why it works: Complementary skills. Take The Wing’s Audrey Gelman and Lauren Kassan. Gelman, a high-profile chameleon who in the last decade has very publicly morphed from Lena Dunham’s best friend to celeb photographer Terry Richardson’s girlfriend to Scott Stringer’s political operative to co-founder of the $117.5 million venture-backed women’s co-working space, The Wing. “I fly into the solar system, and she keeps me weighted down to earth,” Gelman told Inc. magazine — where she’s currently on the cover, some eight months pregnant — of Kassan, her COO.
This dynamic is a quintessential startup combo: On average, according to research group Startup Genome, visionary-operator pairs raise 30% more money and have 2.9 times more user growth than technical or business-heavy founding teams.
Why it can fall apart: The very thing that makes the dynamic so powerful can also be its downfall. The larger-than-life personality typically has a more prestigious visible role — landing media attention, bringing in clients and investors — while the technician is doing less glamorous, visible work under the hood. “Even when that’s what they’ve agreed on going in, it can still weigh on people,” says Matthew Jones, a Denver-based therapist who counsels co-founders. “And the other person feels undervalued and unappreciated.”
Who they are: Think The Gap’s Doris and Don Fisher (she came up with the name); Gordon and Carole Segal of Crate & Barrel; housewares company Chilewich, co-founded by husband-and-wife-team Joe Sultan and Sandy Chilewich; and high-end beauty brand Malin + Goetz, co-founded by Matthew Malin and Andrew Goetz, who have been together for more than two decades. And then there are the famous marriages that didn’t work out: Stewart Butterfield and then-wife Caterina Fake hatched Flickr (both have since moved on to other co-founders, and other life partners.)
Why it works: There’s chemistry from day one, and both want their partner to succeed. (An added incentive to make it work: It would be really awkward to decide who has to leave if things go sour.) Julia Hartz, who cofounded Eventbrite with her husband, Kevin, has said he’s her motivator and mentor — and that he believes she can do anything. The pair also got advice from other married cofounders to clearly define roles. In the early days that meant Kevin on product, Julia on customer support, finance, and marketing, and their third co-founder, Renaud Visage, on technology. As Kevin once said: “If Julia is the pitcher and I play first base, I’m not going to run out and pitch. Where we’ve seen partners break down is that overlapping gray area, so really defining those boundaries is critical.” In 2016, when Kevin wanted to return to investing and entrepreneurship, Julia succeeded her husband as CEO .
Why it can fall apart: In the United States, 50% of marriages end in divorce, so imagine what happens when you throw a startup into the mix. Consider Tory and Chris Burch, co-founders of the fashion company Tory Burch, who divorced in 2006. They ended up in court in 2011, fighting over whether Chris’s next venture, C. Wonder, was a Tory Burch copycat (they settled in 2013). Some couples do manage to work together after the love is gone. Domenico Dolce and Stefano Gabbana are still working together, 14 years after they broke up romantically.
Running a startup is so often likened to a marriage that The Seven Principles of Making a Marriage Work is required reading in one Stanford Business School course. The boiled down wisdom: “nurture your fondness and admiration,” “solve your solvable problems,” and “overcome gridlock.” Says Heather Jassy, a former Etsy senior vice president who now works with co-founders at Reboot, a Boulder-based personal development company: “It [the relationship] can get very transactional. In non-therapist speak, this means doing things together away from the office.”
Who they are: A group of friends or former colleagues who have complementary skills or — in some cautionary tales — who all happened to hatch an idea together, without thinking through the roles of each individual. Warby Parker’s four founders were all getting their MBAs at Wharton when they divined their affordable eyeglasses idea over a conversation at the computer lab. Casper, the e-commerce mattress company, also has four founders — a pair of pals from Brown University, plus two guys they happened to sit next to them at a New York startup incubator.
Why it works: No matter the challenge, there’s basically always a founder who knows something about a given subject. Take Pokéworks, whose origin story sounds more like a boy band, than a company: Two groups of friends connected via one guy, for a total of nine founders. Have a technical issue? Cofounder Wen Wei has a computer science background. Talking venture capital or private equity? Cofounder Michael Chen is your man. It helps that each founder has final say over his own department, and CEO and cofounder Mike Wu says there are no overlaps: “We all have pretty similar personalities but very different backgrounds, so it all worked out.” After four years in business, they’re all (still) good enough friends to gather en masse for cofounder Peter Yang’s recent bachelor party. “I’m not going to get into the details of that,” Wu says with a laugh, but rest assured that the Hawaii wedding featured poké.
Why it can fall apart: Too many cooks in the kitchen. Garry Tan, a former partner at Y Combinator who now runs Initialized Capital, warns that five or six co-founders “is almost always too many. Four is doable, but often people drop off and you lose big chunks of equity that way.” Plus, “too many co-founders is usually a sign of a leader who is afraid to say no.”
Consider Housing.com, once the darling of India’s startup community, started in 2012 with a dozen founders who all met at India’s Institute of Technology-Bombay. The bloated co-founder org chart didn’t stop the real estate portal from raising $90 million in 2014, led by SoftBank — until things went awry. The company’s enfant terrible co-founder and CEO Rahul Yadav was fired by the board after publicly accusing VC firm Sequoia of trying to poach his staff. In the months that followed, another five co-founders left the company. In Glassdoor reviews, multiple employees complained about the lack of division of work, lack of strategic focus, and that “top management had no experience which led to the ultimate fall.” Another was simply headlined: “Too many cooks spoil the broth !!!”
Who they are: Roy Disney (the business guy) and his younger bro, Walt (the creative.) Harry Warner and his younger brothers Albert, Sam, and Jack. Designer Rebecca Minkoff (creative director) and her older brother, Uri (CEO). Paperless Post’s James Hirshfeld (CEO) and his older sister, Alexa (chief product officer). And of course: DryBar’s Alli Webb and Michael Landau.
Why it works: You’ve spent a lifetime navigating each other — strengths, weaknesses, parents, and shared DNA. (Plus the threat of some extremely awkward Thanksgivings if it doesn’t work out.) Entrepreneur Uri Minkoff believed in his sister’s talents, stepping in on the business side — and with the cash — when she ran out of money getting her handbag business off the ground. The one condition he gave Rebecca from day one? No drama, which meant, he explicitly told her, as only a brother could — no boyfriend.
Why it can fall apart: Easily defaulting into unhealthy patterns. Dawoon Kang, who founded dating app Coffee Meets Bagel with her identical twin sister, Arum, in 2012 says she and her twin would get into shouting matches that they would never have with an outsider. At the heart of their tension, Dawoon says, is this: When you’re a twin people are always comparing you to one another. “So subconsciously we’re always comparing and wanting the other person’s appreciation and acknowledgement,” she says. “We didn’t grow up saying nice things to each other, and it’s a vicious cycle.”
For instance, if Dawoon makes a suggestion, Arum — her older sister by 20 minutes — will note a risk. If anyone else had pointed it out, admits Dawoon, she would think it’s helpful, but when her sister does it, it’s another story. “It’s like she’s saying my idea is dumb,” she says. “I get defensive and triggered, and we end up fighting.” About a year ago they raised $12 million in funding, and decided it was time for intervention. Now they have an executive coach and a therapist to mediate, something Dawoon says she wishes they’d done “from Day Zero.”
With siblings it can be especially tough to unpack all the years of accumulated baggage. “Family has an extra layer of complexity because they have a very old set of behavioral dynamics they’ve been working on their whole lives,” says Reboot’s Jassy. “It can be very hard to crack.”
Her advice to siblings: Think about the way in which you communicate with each other. Not “I’m about to kill you if you don’t stop fill-in-the-blank,” she says, but “I noticed this behavior, and can we talk about it?” Which is not exactly bad advice for any co-founders.