March 18th, 2009 | 
I’ve been getting involved with more raw startups lately and I’m being reminded daily about the difficulty many teams have in establishing any form of decision-making hierarchy. “We’re equal partners in this enterprise.” “We started it together, we’re going to run it together.” “We both [all] provide equal value so should have equal input.” Yeah, I think I’ve heard it all and, at times, said and believed it all myself. Let me try to put it as succinctly as possible . . . it doesn’t work.
Sure, when things are going well and life is good, almost any organizational structure will be somewhat effective. It’s when the road gets bumpy, which it inevitably does, that the wheels of the multi-headed vehicle come off. Decision-making is tough when things are tight and as much as you would like to believe that two or more people can reasonably make an informed final decision, a hundred thousand years of human nature stands against you. This is why, by the way, when you’re out looking for VC funding, investors will simply laugh you out of the room when you say that the partners are co-CEOs.
Just because one person should be chosen as the final arbiter of decisions doesn’t mean that the entire founding team doesn’t remain active in strategy, tactics and corporate philosophy, it simply means that a single person is responsible for ending the conversation and making the decision on which path to take. There is also no reason for differences in compensation or company ownership, if that’s what you’d like (although I’ve met VCs that get heartburn when this happens). In the end, it’s simply about a single person being in charge; a go-to person (as viewed from inside the company and outside of it). In all other ways, the founding team can remain equal.
Far be it from me to plug my own blog posts, but I wrote about this a couple of years ago and I urge you to read about it before throwing yourself into the abyss.
Hope it helps.
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