Finding cofounders

Did you have a hard time moving from solopreneur to the next level? Is a co-founder the key?

Chicke Fitzgerald

June 9th, 2016

I have accomplished an enormous amount as a self-funded founder of my travel tech venture.  I have a completed MVP that has been in the market in production for a year this coming week.  It is already in its third version, pivoting as needed and adding bits of new functionality.  We have over 2400 locations using our product in the US and Canada to power trip planning for up to 24,000 events per month.  

We have steady, transactional revenue and have in fact broken even, other than the fact that I am not taking a salary yet.  I have half a dozen signed contracts/verbal commitments on business that could amount to $50k/mo or more.   We have no long term debt and I have not yet taken in any investment.  I do have small option commitments to my board, but have plenty of equity to use to attract the right talent and partners. 

I am now at the place where I really need help and need to get out of doing everything on my own and bring on some help. While I can do it all (except the programming itself), I know I SHOULD NOT BE doing it all.   

I do have an amazing board and have had SO much help and support getting the company to where it is but I still need someone to own the product moving forward (the elusive tech co-founder) and someone to drive biz dev (equally elusive).  Of course, until the new revenues are flowing (we have about a 60 day lag on revenue generation after implementation, depending on the type of customer), so I can't interview and hire just yet.  So I continue to try to sell my dream to as many people as possible, hoping that the right team members will jump on the bus with me after they understand the vision.    

I'm really ready to grow.  Really I am.  But I realize too that stepping out of the solopreneur, working from home into being a true company, with an office and a true every day team, while the end goal, also means the end of an era.

Today, I go from dreaming to deciding in the space of seconds, ideas go from my brain, directly to my fingers and onto a website. I work from the comfort of my couch and the freedom to work from 7am to 1am if I want (or not), no outside approvals needed to move ahead, very few delays in getting things done.  Moving at the speed of light.  I know I will miss that, even though I truly want to take the company to the next level.

At this point, it would be useful to get some input from others that have taken this plunge.  

What was it that pushed you out of the "comfy I can do it all myself" place?  
  • Getting a co-founder?  
  • Taking in a small round?  
  • Securing that big client that means that you don't have to raise money?  
  • Just doing it?
Thanks in advance.

Nearly there......

Chicke Fitzgerald

June 9th, 2016

Thanks to both of you for your observations. 

And no Igor, it was a legitimate question for other founders, but even if I were, this is, after all, Founder Dating.   If this were, we wouldn't all have to pretend that we aren't looking to get married.  ;) 

Sometimes as entrepreneurs we simply need to know that we are not alone in our thinking or our experiences, so that we can keep on track and deal with the pace issue that comes from choosing to go it alone for a time.  

Peter, I raised $7m in my last venture, $1m of which was my own resource, so I am not afraid to take in growth capital, I just want to be a little further along before I take that step and fortunately, with my husband's commission sales job, I've been able to take my time on this one and not have to desperately seek capital to cover operating expenses or development.


June 9th, 2016

Sounds to me more like an ad for a head of product than a real question, Chike. It sounds like you've done everything right and should be able to hire the help you need. If your business is scalable, you should be able to find the cash through venture funding, now that you have revenue. If it's more of a "life-style" biz, that's alright too, the runway is just a bit longer, so keep doing what you'be been or find a product person who will accept lower salary with future profit sharing options. You may also be able to get a loan, if you're showing rising revenue.

Hoofar Pourzand

June 9th, 2016

Hey Chicke, as others said, very well written post and congratulations on what you pulled off already. About your work, this is what came to me as the first impression: you are looking at wrong numbers. Now bear with me: 2400 service locations and ten events(?) per location per month looks good and all that but the travel/hospitality market is also pretty overcrowded (what is it that is different/new/valuable in your service). Self-funding-with-a-board also doesn't build value over time to investors. And also there is investment scene that is rapidly changing. Now, saying all that I didn't mean to put fear in you or question your vision. It seems to me your number one and two power points are experience and practicality. Use that to build a solid smaller product and sell that to customers and with the time and money hire what you need. Don't look for finding that super star cofounder, chances are that he/she won't be able to add to you or to your team as much as you want and keep up with you. If you have done this much work at this age, huge kudos to you, you might as well deliver a running money generating service at a smaller scale, downsize the board if necessary. My own experience: Having the vision and an MVP finding a cofounder can be/was/is way harder and more expensive than hiring a tech or a biz-dev guy. I work long hours and also have a day job, most folks with the level of my experience have other responsibilities like a marriage, mortgage or a family.  My business is making money and I have an office and inventory and all that at my own small scale and I'm happy with it :)  GL, Hoofar

Chicke Fitzgerald

June 9th, 2016

Hoofar, good point on the 20 year comment.  You could say the limiting comment about my first 20 years as a corporate person in the travel industry. The last 20 years out on my own have been all about innovation and market disruption.   Check out my radio shows,   Status quo in my mind is the enemy of growth.   I live to disrupt and differentiate. 

The travel industry is stuck in a rut, serving a very small slice of the market.  Most commerce sites focus on vacation travel (5% of all trips in the US) and business (25%).  We focus on what I call "life travel", which is basically everything else.  Also they focus on the air traveler, when just 11% of all overnight trips in the US are by air.  Silly really.   Lastly, the underlying tech driving most all of the hotel booking systems is based on finding hotels near city center and airports.  That isn't where people go.  Hence our focus on venues, companies and events, which can be anywhere.  Proximity in results = relevance.  That is what we do. 

I agree that the complexity in partners in general is something that you have to decide to embrace.  You can work on simplification, but anytime there are people in the equation, there will still be some layer of complexity.   I'm all for partnership if it is the right complement to my skills and if it moves the business forward substantially.  As I said before I CAN do many things, but I SHOULDN'T be doing many of the things that I can. 

Accelleration is what I am really seeking.  And again, many ways to get there!

Chicke Fitzgerald

June 9th, 2016

Also just FYI, when I submitted this post I picked two other categories that were more on target with what I was asking, but those categories didn't exist, so I had to pick the third, which was a pre-authorized category in FD.  

Finding a co-founder is only a part of the solution and because I have had some complicated partnerships in the past, it is one that I am not rushing into.  

I've been a strategic consultant for 20 years and I know that you have to start with identifying your problem.  In an early stage company (even post revenue) the problem is growth and there are many ways to get to that destination.  

Just like if you are lonely, marriage is only one (and a very complicated one in many cases!) path.  It isn't the only answer.

Chicke Fitzgerald

June 9th, 2016

Thanks Hoofar.  I've been consulting to the travel industry on tech and marketing for 20 years, so you can rest assured that my product is a game changer.  I've written 4 books on global travel distribution, so this is my niche!

I've taken a totally different tack that doesn't require brand building and marketing to get consumer awareness.  I've turned the model upside down (or right side up as I prefer to say).  

I am continually stunned that the top 2 major online companies, nearly 20 years after they launched, still spend upwards of $1b per year collectively on branding.  I don't want to build to that model.  We are a B2B tool that can be installed on any website, blog or be embedded in any confirmation or registration email to add integrated trip planning.  Think the AddThis and ShareThis of travel.   We can also trip enable any photo or video.  That is our niche.  One touch search for hotels nearby any company, venue or event.  

Thanks for the encouragement all.

I appreciate your input.

Hoofar Pourzand

June 9th, 2016

Let's clear some smoke here: For some people and business models the cofounder might be the key and the only way. I like to hear their stories. I wouldn't worry about FD and its structure. I'm a title reader and I come here once in a month respond to posts in the hope of creating a conversation on topics I find interesting.

Finding a cofounder is complicated but complex is a better word. It shows the unpredictability nature better. So, I'd say the Market is complex. Market evaluation is complex. It's risky to me because it is complex. I like to make things simpler if they are complicated until they are not.

Side note: When someone says that they have 20 years in X, I always wait and listen. I listen very carefully to what they are about to say next. I always cross my finger that they share their opinion on an uncommon radical topic or will share a disruptive perspective. Something you can put on a TED talk. Otherwise, you don't need to mention that. Usually, your years of experience, specially if it is above 5 years, might be actually the limiting factor for your growth in a market that is tried  by many like you before.

Peter Jordan Revenue hacker for startups - journey to the $1 of revenue

June 9th, 2016

Hi Chicke, Well witten post. I'd have to say you are in the driver seat. You personally will have to decide what makes sense for Chicke. Nothing I could say or do would help you decide to take in capital and grow dramatically. Every company that I have participated in growth only led me to do more work for longers hours every day. But that was my choice. Good luck and I am sure you will make the right decision. All the best, Peter Jordan


June 10th, 2016

Hi Chicke,

I'm certainly not the person to "speak from experience" re branching out from solo to multi, but as I read your post and the responses so far, I wondered...

Why do you need an office and to start being more "traditional"?

If I take your hiring desire at face value (tech person and biz dev person), I'm not sure why you'd need the overhead of a "real space".  Tech could be anywhere and biz dev by nature is likely out biz deving.

Also, when you say you're looking for a tech co-founder, I wonder a bit.  Isn't it too late for a co founder given how far you've taken your product?  Maybe a tech person (CTO, whatever) that is a hire would be an easier find?  And given your work so far, I see you as the key person in the venture, not the CTO "owning the product" - that statement seemed off to me.  May I ask, what's your goal for involvement down the road?  What role do you want to play?

Also, are you intending this to be lifestyle or startup/exit?  You mentioned the goal is to be a "business with an office, etc.", but I'm wondering if you're really wanting that or if you like what you've got enough that you could make a business that gives you everything you want without the trappings of traditional office-y stuff.

Chicke Fitzgerald

June 11th, 2016

Randall, very insightful questions. I have run a global consulting firm on a virtual basis for the better part of 20 years. For about 5 of those, I was also doing a tech startup (raised $7m) and had a proper office and a team of about 20. Those were some of the best days of those 20 years.

The camaraderie and energy from having people in one place can't be replicated through connecting online. I have grown to hate "group conference calls". If you have never seen the Youtube video called A Conference Call in Real Life, watch it and you will understand what I mean.

I am seeking engagement of a team and the momentum that comes with engagement and I think that the ultimate in engagement is getting to co-found a venture, even one that has already accomplished a fair bit.  That actually reduces the risk of taking a co-founder position, versus coming in on a blank slate.

The two people that I was talking about are the core team, but they are not the only hires. Once we have the core team in place as co-founders of the business, and we have sufficient revenue, only then will we begin hiring.  

We will need a team of account directors to manage the enterprise client relationships, product management, finance, etc.  We will also need marketing geniuses (if the co-founder doesn't have that capability) and eventually inside sales and people to manage those people. And ultimately I want the tech team inside, but continue to look at how we can blend that with outsourcing relationships, but that will be the tech co-founder's decision.   So a traditional office will ultimately be the answer for this team of 10-15.  In the interim, I have office space at an executive suites that will handle the core co-founder team and then allow us to add people as needed (even virtually) without having to commit to leased space.  

Personally I am a big deal person - I've spent 30+ years in joint ventures, mergers and acquisitions and as key negotiator on the enterprise deals, but I'm not the day to day biz dev person. I need a detailed sales/biz dev leader who can build out that team and can build out an affiliate/franchise sales team for each of the sectors that we are after for each of our brands.

I am the inventor of the product, but am not up on the technical architecture and tools, so you are right, a CIO/CTO with equity may be the right first move. The technical co-founder title is a bit of a buzz word and more important to investors than to the business itself, but it is the role, responsibilities, engagement and commitment that is important to me, whatever you call it.

What is really key to me is that the person has a vested interest in the success beyond whatever the ultimate compensation package would look like (I'm a fan of revenue sharing for a co-founder).  I want that person to take ownership of the product roadmap. I will always have input into the product, but I don't want to dictate functionality. I want to collaborate with brilliant, iconoclastic minds that see beyond my own vision.

The co-founders and I will take salaries when it makes sense to do so based on revenues/profits and what other skills we need to augment our talents. That is the way to run a business.

As to what I'm looking to do? I am building a billion dollar business. We are at the very beginning of that journey, but I intend to get there and to lead it for at least a decade. I have started slowly because I wanted to build a solid foundation and truly because I can do so many of the things that should be done. But I know it is time to move to the next level.

This is not a short term gig. If we do this right (and we will), we will get exit offers in the 3-5 year timeframe. By that time we will have taken in outside equity investment. If the offers are right at the time, we will consider it. I am carefully building a board that will guide us in all those decisions.

If public markets are healthy, we will look at IPO at that point. Within 3 years we should be at $100m in gross sales based on other similar ventures that I've run. $250m would be our stretch goal for that timeframe. It is definitely doable. But I need the right team who believe along side me that it not only can be done, but it should be done, because the tools in my industry are very broken. The consumer does all the work before they even go online and they don't even realize it.

My industry is full of multi-billion dollar players that are not directly targeting over 67% of the market. They get them by default but not on purpose. Our product solves that and broadens the reach. Plus we get to the consumer earlier than the current players do.

It is time. I really appreciate how each of you are making me look at this from different perspectives. I believe at this juncture that getting a core team together is the right thing to do. This summer I may have enough revenue to do it the old fashioned way, just recruiting and hiring the right talent, but I still prefer to find entrepreneurial spirits that see my brightly decorated bus with the destination in lights on the front and flag me down to get on! We'll see what happens. It is a part of this amazing journey.