Why a Phoenix is the Ideal Cofounder?

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Have you ever heard about the story of the Choluteca bridge? It perfectly exemplifies the gist of this article. It was built in a region prone to extreme weather conditions with strong winds, hurricanes, and frequent floodings. The Honduras government commissioned the best Japenese architectural minds to make the Choluteca bridge undestroyable! And guess what? They succeeded! In 1998 a category 5 hurricane hit. All bridges in the country were ruined except Choluteca… The problem was that the region got the equivalent of 6 months of rain in a few days. This extreme and unexpected situation made the river change course. So the bridge stood strong but there was no river beneath it anymore! 😐

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This is pretty much what happened to companies like Kodak, Toys’R’Us, Nokia… 

How come? What did they lack that much?!

• …smart people on board? No.
• …ambition? Not at all.
• …financing? Neither.
• …technology? Not at all… Kodak invented the digital camera, Nokia the smartphone…”

What went wrong then? Giving it a second thought, they lacked:

1. An open-mind to spot trends obvious to everybody else.
2. The courage to re-question established ways and reinvent themselves.

It wasn’t that much about expertise or competency gap but rather a cultural flaw. How people inside the company behaved as a team.

So…

• Your best work can’t withstand the test of time…
• You can’t predict the future…

But…

• You can choose your cofounder… 😉

And this is what this article is about. How to choose a cofounder that will contribute to building a company that can renew its business model whenever relevant.

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Culture eats strategy for breakfast — P. Drucker… and PEOPLE are at the heart of it

Cold water cools down hot water. Hot water warms cold water… The new average temperature is different from both initial states.

Just like interactions in physics are two ways, it’s also true for company culture. Any new joiner is impacted by the company’s culture and in return, it is affected by her/him. The effects of a wrong recruitment can be profoundly detrimental to the business. Back-paddling is often costly in time, money & energy. This is all the more true in the early days of a startup. According to Vinod Khosla, a misstep in the first 5 recruits will, for sure, kill your company.

Things can only get worse when talking about co-founders! As one may argue, finding the right co-founder may be tougher than finding a spouse! ☺

The most usual destiny of business is… failure

Consider the following facts:

• Startups’ odds of success are very low: 90% go bankrupt in the first 3 years.
• Success doesn’t guarantee repeated success. If successful companies are rare, repeat success is exceptional. Even when talking about SAP500 companies, again about 90% disappear over the course of 30 years.

The overall bankruptcy rate of a company is… 99%!!!

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A few years back and as Paul Graham would say, the key challenge of a startup was to find a business model. In the old world, startups had to do this once in a lifetime, today it is increasingly common to have to adjust (or even reinvent) the business model repeatedly as the market evolves… or a global pandemic hits…

So if you are building a company and looking for a co-founder, you should look for somebody able to reinvent the business model times and times again… You may call her/him a Phoenix co-founder… All the rest can be delegated to competent and motivated employees.

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What is Phoenix cofounder? How to recognize her/him?

The below model supports exactly that objective and is detailed thereafter element by element.

Let’s plunge…

I. CANDIDNESS

Based on the above model…

Candidness = Courage + self-awareness + Humbleness (ego) + Clear Communication

1- Courage

Being true to oneself and to others requires courage. Courage is the ability to accept that we may lose it all and still carry on. Because our self-worth is strong enough to face adversity.

“A bird sitting on a tree is never afraid of the branch breaking, because its trust is not on the branch but on its own wings. Always believe in yourself” — Unknown

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High self-worth people’s opinion of themselves depends more on themselves than others… courage is a natural consequence.

2- Humbleness

Humbleness is a blessing, to me, it’s the closest thing to wisdom. It helps show life as it is rather than like we are. It allows removing ego from our perception system.

There are two kinds of humbleness:

• “Postdated humbleness” is about admitting mistakes, avoiding them in the future by learning from past experiences. It drives a healthy ambiance within the team as people focus more on moving forward than politics.
• “Proactive humbleness” is about admitting we may be wrong at the early stage of project planning and idea generation. It’s about being humble enough to build, not only, on our mistakes but also on others’ mistakes and opinions. “Proactive humbleness” is an effective productivity tool. It comes with a condition, putting aside our ego.

The wise learns from her/his mistakes, the wiser learns from others’ — K

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3- Self-awareness

Self-awareness is perhaps the single most important element each of us should work in life. It is the ability to:
1. Connect our acts to their consequences,
2. Be aware of and understand our: beliefs, choices, strengths, limitations… Talking about limitations, one of the most uncommon abilities I’ve seen in managers is to be able to keep an eye on “unknown unknowns”.

Self-awareness = know ourselves + recognize the consequences of our acts

4- Clear communication

The best communicators that mobilize people for action have 2 things in common when it comes to conveying messages:

1. They are concise and clear. This stems from the use of simple language (avoiding tech words), short sentences, and clarity of thinking.
2. They use metaphors in the form of stories, (mental) images, or jokes… A metaphor converts an abstract concept into a concrete image that generates the desired effect (emotion) in the recipient. It’s designed to stick in the minds => strike to stick.

A final thought on CANDIDNESS, non-candid people are a real waste of time and potential. When we start playing roles, we stop being ourselves. A role is a limitation of our complex and rich personality, it hinders our potential as it narrows our thinking. It creates unnecessary tensions with colleagues and friends by restricting the range of possible options. It kills trust over time as people progressively discover the game we play. Even worse, we might end up thinking we are the role we play as James Carse puts it in his book “Finite and Infinite Games”.

Be yourself; everyone else is already taken — Unknown

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Summing-up

Candidness = Courage + self-awareness + Humbleness (ego) + Clear Communication

II. OPEN MIND

Open mind = Courage + Nuance + Curiosity + Doer

An open-mind is perhaps the scarcest resource on earth. Just look around you ☺. For sure our mind is wired in such a way that no human will ever see reality as it is, yet the closest we get the more blessed we are. Many companies went out of business because they were unable to perceive trends that were shouting at them. Oddly, the more expert people and organizations get, the less open-minded they become.

1. Curiosity

Curiosity is both the ability to LEARN & to UNLEARN. We cannot be truly curious if we are not ready to let go of what we think we know for sure or our established habits.

Why is it that important?

In today’s world, you never know who is hunting who and when, an apparently insignificant incumbent, will kick-off well-established companies. To subsist in business one has to stay informed, romping about with great curiosity; looking for evolutions and disruptions 1. in own industry, 2. in adjacent industries (see how Clay Christensen defines adjacent industries) and 3. in industries that will be structuring most others in the near future (e.g. AI, 3D printing, block-chain…).

Once spotted, new trends and technologies require that founders be fast learners. Yet being a fast learner is only the beginning. While not all of us were born to reinvent the wheel, at times it can be damn useful! You need people that have the ability to see things like kids do; with intense curiosity, a renewed search for unbiased coherence. This is called “zero-based thinking”. Rethinking from scratch whatever already exists. Spotting business areas where the current state of the art technology is just not good enough. I cannot talk about redefining the rules of the game without thinking of those I admire for exactly that:

• Prof Gunter Pauli — Reinventing ecological business.
• Elon Musk — Reinventing cars, rockets, and many other things.
• Jason Fried — Rethinking company management.

Let’s tweet:

Few years back curiosity was an advantage, today lack of curiosity is a killer — K

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2. Nuance

For our brain to process the incredible amount of data it gathers, the use of generalizations is inescapable. In our heads, bits of information are clustered to make them manageable. For a baby that discovers that animals exist through cats, all animals are cats. Someday it discovers that cats & cows are different but still mixes them up with tigers. As adults, we understand that mixing up cats & tigers is not good for our health but we tend to forget this basic rule in most other contexts. Business (and life) situations look alike on the surface while they are different if we dig deeper.

Nuance is the ability to have an acute reading of situations and a refined reaction. Dealing with new situations properly requires developing our meta-skill of spotting nuances, by focused observation and relentless questioning.

3. Doer

In a world of scarce resources, a doer is a person that is both efficient and effective.

Being effective is having laser-focused attention on whatever matters most: key business drivers, upstream KPIs (Lead Measures) that have a broad impact on the business and the culture, key features that make your product unique and turn users into fans.

Another key component of being a doer is being able to stick with an activity/field for a substantial period of time allowing to both: 1. deliver significant results and 2. become an authority. Just like Ninja in the old days spent their whole life mastering one Kata. This full mastery comes as a proof of singular commitment in everything they do. I call them “Jacks of all trades master of ONE”, Lego calls them T-shaped employees. Ancient wisdom meets today’s realities.

4. Courage

Courage was already defined in the “Candidness” section.

Summing-up

Open mind = Courage + Nuance + Curiosity + Doer

In net, maintaining an open-mind throughout a lifetime is critical. Ancient Buddhist wisdom calls it the “beginner’s mind”. We should always be learners, ready to absorb new perspectives.

If interested read: The (ultimate) Guide to Open-mindedness.

III. AWESOMENESS

Awesomeness = Humbleness (ego) + Ability to manage people that are better than us + EQ + caring beyond ourselves

You and your co-founder will need at a point in time to manage teams. The people in those teams should be totally engaged to their leader(s). Being awesome is a good place to start.

1. Beyond Self

Each person has her/his own values. We aren’t here to judge them, yet we are supposed to assess the fit with the company’s desired culture. The one most important thing I seek is altruism; as defined by the ability to stay externally focused and being proficient at finding the sweet spot between BOTH our own needs and those of others’ (be it colleagues, customers, partners, the planet…).

Going beyond ourselves is also a common trait of unanimously recognized leaders around the globe: Mandela, Mother Theresa…

Entrepreneurship is not about COLLECTING money it’s about DISTRIBUTING value — K

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2. Ability to manage people that are better than us

To survive we are supposed to evolve as species. This is also true for companies. Newcomers need to be better than previous ones; i.e. the candidate must be better than the recruiter (YOU & ME ☺). Following that logic, managers you recruit need to be able to be excellent people managers, totally at ease with managing people that are better than them. This is again truer for your co-founder (and you).

Not surprisingly managing a business is less about business expertise and more about People Management mastery — K

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3. EQ

EQ = Self-Management(Awareness of own emotions x Managing them) + Empathy(Understanding others’ emotions x Managing them)

In this section, we will focus on the “empathy” component of EQ.

Google conducted a lengthy study, under code name Aristotle to understand what made teams perform at their best. No surprise that people needed to feel a sense of Psychological Safety to be willing to give their best and take necessary risks without fearing setbacks. The best performing teams were those where people were nice to each other. Empathy helps to understand others’ emotions and needs and adapt to them.

4. Humbleness

Humbleness was already defined in the “Candidness” section.

Summing-up

Awesomeness = Humbleness (ego) + Ability to manage people that are better than us + EQ + caring beyond ourselves

IV. RESILIENCE

Resilience = Energy + EQ + Passion + Doer

Even if you had to recruit Catwoman or Superman. You should expect her/him to fail at times; resilience is the key to repeated success.

1. EQ

EQ = Self-Management(Awareness of own emotions x Managing them) + Empathy(Awareness of others’ emotions x Managing them)

We saw how EQ was key in managing our interactions with others. EQ is also about understanding our own emotions, inner drives, and frustrations. How we react to roadblocks has a clear link with future success. At the heart of it lies our ability to manage frustration.

2. ENERGY

In the cradle of humanity, our subconscious brain’s primary goal was to help us survive in the hostile jungle. Neuroscientist now knows that it didn’t evolve much since, although our environment changed drastically.

On top of regulating vital processes (e.g. breathing) it also manages our energy in the safest possible manner, i.e. no unjustified energy spent. Why? A few centuries back, we had no fridges, no supermarkets… we could die from starvation.

One way of ensuring survival was storing whatever energy we ate and spend it exclusively on worthwhile matters: hunting, being hunted, sex (sorry I meant reproduction ☺). Laziness is the norm. One way to convince our subconscious brain to collaborate and allow energy spent on unworthy activities like work is to make HEALTHY energy handy. The latter comes from healthy food, sport, sleep, rest, socializing, meditation, breathing, passion…

3. Passion

Passion is a priceless cement for most of the above criteria. It drives intense curiosity, helps to keep up with adversity, allows staying informed about technological advancements… It permits focus on what matters most no matter what.

Often times we define passion as an activity associated with a great sense of satisfaction or fulfillment. We also usually blend it with talent. While I adhere to the precedent, I would like to draw attention to the fact that, often, in a lifetime, we discover many activities that correspond to the prior description, yet they aren’t true passions. They’re a sort of temporary spike that fades over time.

Therefore, I recommend adding another criterion to help tell a true passion from a fad by asking ourselves one extra question: what activity are we resilient at despite adversity, discouragement from peers or family and still be willing to carry on…

If I had to choose between intelligence and creativity I would pick resilience ☺— K

Resilience is a consequence of a TRUE passion.

Summing-up

Resilience = Energy + EQ + Passion + Doer

MODEL RECAP

YOU FEEL LIKE SOMETHING IMPORTANT IS MISSING?

Yes… you did not mention “Ethics”, “Smartness”, “Creativity”, “Leadership”…

I’ve brushed aside “Smartness” on purpose. Why? It all depends on what you mean by “smart”. If it’s the opposite of dumb, then the answer is yes, you need a smart co-founder. But if you mean really smart, it’s not an absolute necessity. The criteria proposed by this model beat disproportionately smartness at long term business sustainability test. Partnering with the kind of persons described above will allow renewing your business model when needed, making your company resilient in the face of a rapidly changing environment.

The other elements (ethics, creativity, self-esteem) are already taken into consideration… Let’s have a closer look.

1. Ethics

I’ve always thought ethics is a value and in theory, it is. In practice, it’s a behavior. If interested read more. For now, we will focus on the matter at hand. What characteristics make ethics possible from a behavioral standpoint?

1. Humbleness (ego): The less people are concerned about saving their image and getting social recognition, the higher the chances they’ll stay true to their values and behave ethically whatsoever.
2. Courage: If we aren’t afraid to lose it all and have to start all over again, or are ready to face controversy or simply to look at people in the eyes, we increase the odds of doing (and saying) the hard right vs. the easy wrong.
3. EQ: If we’re able to manage/understand our own and others’ emotions, we’re more likely to behave ethically. After all, most of our unethical behaviors emerge when 1. we feel an urge we’re unable to control or 2. we fear others’ reactions.
4. Doer: the more resistance to pain we demonstrate, the more likely we are to do the right thing even when nobody is watching.

I guess that by now it became clear that the 4 above factors yielding “Behavioral Ethics” were already cited before… Look at the center of the scheme shared earlier:

2. Creativity

Combining components that contribute to having an “Open Mind”: Curiosity (learn & unlearn), Nuance & Courage; we end up forming a good proxy for creativity.

3. Leadership

Would you agree to the following definition of a Leader:

A leader is someone who is able to spot trends, create the corresponding future by working on it and engaging people to work in line with her/his direction while staying true to her/his values.

Well let’s read it again using our model:

1. Someone who is able to spot trends: Open-mind.
2. Create the corresponding future by working hard: Resilience.
3. Engage people to work in line with her/his direction: Awesomeness.
4. While staying true to her/his values: Candidness.

Through the 3 above examples, we understand that the model is built on meta-criteria which combination yields other criteria. This allows limiting the characteristics we are looking for.

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OK then?

The dream co-founder does not exist. If you ever come across one of these guys, kick-start collaboration on whatever idea. Just do not let her/him slip away. What is more probable is that you’ll never meet anyone of this sort.

What’s the point of this article then?!

For a phoenix to fly it needs two wings. So make sure you complement each other. This is also true for key hires.

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I’ll close with the story of the Choluteca bridge that perfectly exemplifies what I’m referring to. It was built in a region prone to extreme weather conditions with strong winds and floodings. The Honduras government commissioned the best Japenese architectural minds to make it undestroyable! And guess what? They succeeded! In 1998 a category 5 hurricane hit. All bridges in the country were destroyed except Choluteca… The problem was that the region got the equivalent of 6 months of rain in a few days. This extreme and unexpected situation made the river change course. So the bridge stood strong but there was no river beneath it anymore!

This is what the internet has done to traditional media (and many other industries), this is what mobile is doing to Microsoft, this what 3D printing, blockchain… will do to…

Moral of the story, 

• Your best work can’t withstand the test of time…
• You can’t predict the future…

But…

• You can choose a Phoenix cofounder… 😉

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If interested in learning how to work with your nature and not against it, check out my book at WorkWithYourNature.com