Ilit and Joonko went through 3 pivots and 2 partner separations until they reached their current status - having an $11 million fundraising round, close to 30 employees, 100 customers and a lone founder.
Ilit shares insights learned from her journey after parting ways from her CTO (who left the same day Joonko raised $1M pre-seed) and the other co-founder:
- Creating a startup is like getting married - you need to meet your partner’s family and friends to get a better picture of what you’re getting yourself into
- Creating a startup with a good friend can be a recipe for success - but make sure it doesn’t affect the tough decisions if it isn’t a fit
- For Joonko, the signs of the mismatch appeared after only a month and a half. The fear paralyzed Illit and made her listen to the wrong voices saying, "What if he leaves?" and "how does a company go on without its CTO?"
- People tend to confuse being a co-founder with managing the day-to-day; Not every founder is suitable as a manager. It shouldn't be the default that a founder should be an active partner in daily decision-making. Sometimes they are just a professional in their field, and should remain as such.
- Ilit did not communicate her feelings; she was embarrassed to tell people what was happening, forcing her to deal with everything alone. Nor did it lay the groundwork for improving the situation.
- Following the communication issue - when entrepreneurs are asked how they are - they usually answer 'amazing.' But this is not true. Even when there are customers & team, the road is difficult and complex. Illit describes how on the 31st of every month, she does not sleep at night, feeling the weight of everything on her shoulders. It's not a shame to say things are difficult and ask for help.
- For better or for worse - everyone is replaceable. When you understand this, the stress decreases a little and you might begin to feel a little less paralyzed.
- The recipe of ⅓ of the company for a partner at the beginning is not necessarily true. Not everyone necessarily survives and/or contributes equally. Avoid getting stuck later with a bad cuptable and dead equity; substantial vesting and cliff mechanisms should be produced (for co-founders too). Each piece is an expensive piece of the big-picture cake, which can be worth a lot of money - no problem vesting for 6 years + 2 years cliff.
- Put in the effort to find objective, experienced & honest people from the beginning - those who’ll help us see things in the right perspective, and act less from places of fear.
- It's okay to pivot - you need to feel that the product is accurate for the team and the market. Do not be afraid of change.
- Every departure and separation agreement must be written, signed, and its terms explicitly written. Ilit relied on a verbal agreement, but it exploded in her face in the moment of truth. When an attorney came into the picture, everything became less cordial. When the relationship is stable & things are good, sign the agreements. The situation is not unlike going to see a doctor - you should do so when you are healthy, not only when you are sick. If you do not lock things down, then when push comes to shove, and there are developments, the ego returns to the picture, the appetite increases and the negotiations can become greedy.
- Entrepreneurs need to know how to cut and disconnect on weekends/holidays. It would help if you learned to take breaks so that you do not break & burn out.
- Companies should start practicing diversity & belonging and not just inclusion, because people want to feel a sense of belonging. In general, companies should begin having such organizational behaviors at the heart of its doing, not as something nice to have.