The Power of 2 — Why Founder Teams Outperform
In the business world, the success of a project often hinges on the synergy between leadership roles. Among various models of startup leadership, the partnership between a commercial founder and a technical founder has emerged as one of the most effective combinations. This article explores the reasons why having two founders — one with commercial expertise and another with technical prowess — is not only beneficial but may also be the optimal structure for corporate ventures.
The Growing Complexity of Corporate Ventures
As industries evolve and technology proliferates, the complexity of launching and managing ventures has both increased and decreased dramatically. On the one hand, the tools at everyone’s disposal make it easier and more affordable than ever to start a new business. But that also means many more businesses are being started. Therefore, unlike in the past, where a single entrepreneur could singularly dictate the direction of a business, modern corporate ventures require diversified skill sets to navigate the business landscape and manage the corporate relationship.
The dual-founder model addresses this need by enabling businesses to leverage complementary skill sets. In fact, based on Noam Wasserman’s analysis, as shown in the “Founder’s Dilemma” with a sample size of close to 10 K founders, more than a third of analyzed startups have two founders. From our own experience, a team of two founders who complement each other can be, if they are complementary and can work well together, the most effective force to bring a startup forward.
1. Balancing Technical and Commercial Perspectives
Many startups falter at the intersection of technology and business strategy. A technical co-founder brings deep expertise in product development and innovation, while a commercial co-founder excels in market dynamics, sales, and customer engagement. This balance ensures that the venture develops state-of-the-art products and aligns them with market demands. Further it ensures that there is a competence to hire all relevant future roles — as those two leaders with deep expertise and strong skin-in-the-game will be able to vet both the commercial and the product hires, to avoid costly hiring mistakes.
a. Technical Alignment
A technical founder focuses on creating a robust and scalable product. Their understanding of technology trends, software development, hardware (where needed), and product management allows the team to build cutting-edge solutions. This expertise is crucial in technology-driven industries such as software, hardware, biotechnology, etc. The technical founder must be able to actually do some of the early product work and manage a growing team of engineers and product managers to scale themselves.
b. Market Fit
On the other hand, the commercial founder has the acumen to analyze market conditions, understand customer needs, and implement effective sales strategies. This expertise helps the venture position itself strategically in the marketplace, ensuring that the product not only exists but thrives. Further, they also need to bring fund-raising acumen to attract the necessary investment to further and scale the business.
2. Enhanced Decision-Making
Diverse thinking leads to improved decision-making. When technical and commercial founders collaborate, they bring their distinct perspectives to the table, allowing for a more rounded approach to problem-solving. It is common knowledge that diversity adds resilience, and that is very true in the creation of new ventures. Hence, the founding team should be complementary and cover each other’s blind spots as much as possible to really succeed.
a. Cross-Pollination of Ideas
The blend of technical and commercial insights can spur innovation. For example, a technical founder may propose a new feature based on technical feasibility, while a commercial founder can assess whether such a feature aligns with customer needs or will drive sales effectively or can see new customer groups that might be interested. Vice versa, in technology companies, sales can often be quite technical; hence, the input of the technical founder will be key.
b. Strategic Risk Management
Diverse skills also aid in assessing risks. A technical founder might highlight the potential pitfalls of a certain technology approach, while a commercial founder can evaluate how changes might influence market acceptance, enabling the team to make more informed decisions. Having two founders in general also will force them to have more reflected conversations on target setting and overall goals, which is beneficial and can then be translated to the venture team with better communication.
3. Navigating the Funding Landscape
Fundraising is a critical function for any startup, and having two co-founders — one technical and one commercial — creates a compelling narrative for investors. This model demonstrates a robust understanding of both the product and the market.
a. Building Credibility
Investors often seek assurance that a startup can bridge the gap between innovative technology and market needs. A balanced founding team can inspire confidence, showcasing that the venture has a comprehensive strategy to succeed. This also usually translates into more balanced pitches and team setup, where investors gain clarity on both why the product will succeed and create a moat, as well as how this will translate into commercial success.
b. Tailored Pitches
The roles of the two founders allow them to craft tailored pitches to different types of investors. While commercial founders can emphasize market opportunities and revenue models, technical founders can dive into the specifics of the technology, effectively appealing to a wider range of investor interests. Such a team can more likely raise from both tech-driven and numbers-driven VCs, increasing their potential list of funders significantly.
4. Driving Product Development
The dynamics of product development significantly improve when both technical and commercial expertise are on board. The processes involved can be streamlined, leading to quicker iterations and a stronger product as a result.
a. Agile Methodologies
A technical founder would run the agile development cycles, while the commercial founder can input and help prioritize features based on market demand. This collaborative approach ensures the product evolves in line with user feedback and market trends, and that new features have a clear value proposition.
b. User-Centric Design
Understanding the target audience is pivotal. When commercial and technical founders work together, it leads to a more user-centric approach to product design and development, resulting in solutions that resonate better with customers. Part of the design is deeply empathizing with customers, where often, esp. in B2B environments, the stakeholder/customer group includes both technical and commercial roles.
5. Conflict Resolution and Leadership Dynamics
Two founders introduce a variety of perspectives and experiences, which will at times, lead to conflicts. However, when managed correctly, these disputes can lead to stronger outcomes. We believe that constructive conflict leads to more options on the table and better decisions being made.
A healthy debate between the commercial and technical co-founders can prevent groupthink and foster creativity. Both founders can refine their approaches by challenging each other’s ideas and leading the company toward successful outcomes. This requires mutual respect and a culture of trust.
Differences in leadership styles can also create a dynamic environment favorable for innovation. While one founder might lean towards assertive leadership, the other may focus on fostering a collaborative atmosphere, leading to a well-rounded organizational culture where it is both possible to descend and discuss, as well as make decisions and execute fast.
6. Real-World Case Studies
To illustrate the effectiveness of a commercial and technical dual-foundership model, several companies have successfully implemented this structure:
a. Apple Inc.
Founded by Steve Jobs (commercial) and Steve Wozniak (technical), Apple is a classic example of how this partnership can lead to monumental success. Jobs’s vision and understanding of market needs, combined with Wozniak’s technical genius, resulted in groundbreaking products that reshaped entire industries.
b. Google
Google’s co-founders, Larry Page (technical) and Sergey Brin (technical), have often complemented their roles with skilled commercial leaders like Eric Schmidt, who steered the company’s business strategy and market approach. This dynamic has enabled Google to scale exponentially while continuously innovating.
c. Airbnb
Airbnb was co-founded by Brian Chesky (commercial) and Joe Gebbia (commercial), with Nathan Blecharczyk providing critical technical insights as the chief technology officer. This triad played a pivotal role in defining a marketplace that revolutionised the travel industry. Notably, Brian has a design background, which also significantly helps in product development.
d. Meta
Founder Mark Zuckerberg started Facebook from a mostly technical perspective initially, and for a long time on the journey, there was no clear business model in place. This would not be viable in today’s funding environment anymore. The addition of Sheryl Sandberg as his COO later brought more organizational and commercial capabilities to the leadership team. It led to a more balanced approach to scaling and building the business.
Conclusion
In the evolving landscape of corporate ventures, the dual-founder model — featuring one commercial and one technical founder — emerges as a robust framework for success. By balancing diverse skills, enhancing decision-making, navigating funding landscapes, and promoting innovation, this partnership provides the strategic foundation necessary for thriving in complex business environments. As more startups and corporate ventures look for effective leadership structures, adopting this model can be a game-changer, maximizing potential and driving sustainable growth in the competitive market.
Adopting a dual-founder model can be the key to unlocking the full potential of a venture, leading to remarkable innovations and lasting impact in the business world.
We are pleased to be an appointed venture studio of EDB’s Corporate Venture Launchpad 2.0. CVL 2.0 is an expanded S$20m programme by EDB New Ventures, designed to enable companies to incubate and launch a new venture from Singapore, supported by venture studios experienced in corporate venture building. You can also find out more on our website.
Interested to learn more about sustainability ventures? Drop us a line: contact@wright.partners
Authors:
Ziv Ragowsky, Founding Partner at Wright Partners
Sebastian Mueller, Co-Founder at MING Labs
