Entrepreneur Office Hours - Issue #168
A gentle reminder that startups are hard
I don’t know who needs to hear this right now, but I just want to remind you that startups are hard.
As-in ridiculously, stupidly, impossibly hard.
I mention this because I’ve recently found myself sitting across from lots of entrepreneurs who’d been making great progress but are suddenly running into strong headwinds. For whatever reasons they’re not getting as much investor interest as they had been getting, they’re not hitting their sales targets, their growth is stalling, and so on. As you might expect, they’re getting frustrated.
I’ll tell you what I tell all of them: startups are hard.
You can’t reasonably expect exponential growth the entire time your building a company. Heck, you can’t even expect moderate growth or mild growth or any growth. That’s just not how this business works.
If you’re looking for easy work, go get a job working for someone else. Otherwise, get yourself up off the mat, and get back to work. Your startup isn’t going to build itself.
-Aaron
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Office Hours Q&A
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QUESTION:
What is the cutoff for adding co-founders versus adding first employees? I ask because we’ve had someone join our team, and he’s referring to himself as a co-founder. I thought of him as more of a first employee, but one of my partners and definite co-founders is arguing he should be another co-founder. What’s the difference and how do we know what to call him?
Thank you,
Omari
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To answer your question, the distinction between a co-founder versus an early employee is primarily made in relation to the amount of equity someone receives and the person’s salary. A person who has a decent chunk of equity and has spent a significant amount of time getting zero or very minimal salary is more of a co-founders, whereas someone getting less equity and a larger salary is more of an early employee.
You might be wondering what the specific cutoffs are, but the distinction is fluid. In other words, I can’t tell you the line is at 15% equity and a minimum of 18 months without getting paid. You and your partners have to eyeball it and go with what you all are most comfortable with.
All that aside… who really cares? If the person is busting his butt, doing great work, and wants to call himself a co-founder, does it really matter? Conversely, if the person is spending more time calling himself co-founder than actually acting like a co-founder, kick him to the curb before any of his equity vests and move on.
What matters is outcomes. Stop worrying about titles and start worrying about building a successful company.
Got startup questions of your own? Reply to this email with whatever you want to know, and I’ll do my best to answer!