Knocking Down Doors

Smart start-up lessons for smart start-up people

The Fellowship of a Startup: How Cofounders Can Make or Break Your Business

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The impact that we humans can all have on each other never ceases to amaze me. Even as someone who is not easily swayed by others (or at least as I‘d like to think) everything from where I attended college, to the food I choose to eat, to my belief in God, has, admittedly, been highly influenced by others. No decision better exemplifies this than the one to start Capterra. While a number of people in my life influenced this decision fifteen years ago, none were nearly as impactful as my cofounders.

Capterra Inc 500 - Cofounders

Let me define the term “cofounder.” First, I’m referring to people that are there in the first year, often before the company has officially started or incorporated. Second, they are very involved in fleshing out the initial idea, including the vision for where the company should go. Finally, they almost always do not get paid at the beginning. It could be months or even years without paychecks, or if there are paychecks, they are just barely enough for the person to pay rent.

It is impossible to overstate the importance of cofounders—as opposed to a single founder—when starting a business, and this is definitely true in my experience with Capterra. I think it’s fair to say that Capterra would not exist were it not for the fact that there were five of us at the outset. Our strength in numbers had three practical benefits: the courage and excitement to start a business, the raised stakes of having others to hold us accountable, and the complementary strengths that come with diverse team members.

The Guts to Start a New Company

Certainty of death, small chance of success – what are we waiting for?” – Gimli, Lord of The Rings


When I graduated from college in 1995, I never would have imagined becoming an entrepreneur and starting a business – certainly not within the next five years. Unfortunately, my dreams and expectations were much lower. It was not until I joined a smaller company (Digex) that was a fast growing player in the very entrepreneurial Internet industry in 1999 that I even began to ponder it. And when I did begin to realize the need for a website that helps people find the right business software, it was many conversations with three specific people that led me to go for it.

I had met Rakesh through his older brother, whom I worked with at Price Waterhouse. He had been doing technology consulting and software development work in Minnesota when I reached out to him to discuss some ideas I had stemming from my work at Digex. We went back and forth a bunch of times over the phone about software and the tech industry. Similarly, I had two coworkers at Digex – Rick and Chuck – who showed me how software was being delivered over the Internet (novel at the time), and we had countless conversations in the stairwell about how to possibly capitalize on this growing movement.

My many conversations with all three of these guys in the summer and fall of 1999 were instrumental in my growing excitement to start a business that helped connect buyers and sellers of business software over the Internet. While occasionally it was the soundness of their arguments, or—more rarely—the power of their rhetoric (joking), most often it was simply the give and take in dialog, and the fellowship and desire for action that were inspired by that dialog.

I have a hard time believing that I would have been brave (or crazy) enough to start this business had it not been for our collective dialog. I don’t want to speak for them, but I have to think they would agree. And while two of the three left before the end of the first year due to changes in our business model, I am forever grateful for those early conversations that helped give me the guts to actually go for it.

The Raised Stakes of a Team

Once we were underway, the challenges that we experienced over the first three years were intense; I still wonder sometimes how we made it through. A challenge with starting any sort of online marketplace or media company is the chicken and egg dilemma: who do we attract first? – The software buyers/users or the software vendors/advertisers? No buyer would use our website if we did not have great information about the software products. And, of course, that informative content is largely supplied by the vendors. On the other hand, no vendors would participate unless we had a large audience of buyers. That’s what they looked for in a marketing channel. Why on earth would they take our calls if no one was using us?

It took us a long time to solve this dilemma – about three years. And in the process we all went into debt. I personally went into over $200,000 of credit card debt. It was a bit nerve wracking. But what kept me going through it all was the stubborn belief that we could not let this fail. Not only had family and friends invested, not only did it seem like a no brainer that just had to work, but possibly most importantly was the feeling of not wanting to let teammates down. Failing on your own is bad enough. The idea of failing as part of a team is way worse, in my opinion. Quite simply, the pressure of the team helped me to rule out failure as an option.

Complementary Strengths

In Capterra’s second and third year, there were just three of us; Rakesh, Ryan, and myself. From day one, Rakesh built and ran the tech side (with the help of our very first employee, Paulo, who did some crucially important work for a year before we unfortunately couldn’t afford to pay him anymore). Personally, I cannot code. Fortunately, Rakesh is the best coder I’ve ever known. We complemented each other well.

Ryan came on board in the summer of 2000, ten months after I quit Digex and seven months after Rakesh left his gig in Minnesota. We had met back in my days at Price Waterhouse, and we’d quickly become friends. While Ryan and I are much more similar in our strengths, we have some key differences. One that sticks out in particular is the fact that he was much better at translating a vision into an actual product. He helped bridge a bit of a gap that existed between me and Rakesh. This bridge was invaluable to our eventual success.

As I think about what traits to look for in a cofounder, complementary skills/strengths now seem obvious, but there are others. Basic work ethic is huge. A “do-whatever-it-takes” mindset, along with a propensity to simply getting stuff done, is absolutely essential. I also think intellectual curiosity is extremely important.  Asking great questions that challenge assumptions and get to the heart of matters – whether they relate to target market, user experience, product direction, or any other business matter – helps to avoid the many pitfalls that any startup is bound to face. And thick skin really helps, too. People that put their careers and finances on the line for a new venture will invariably get in lots of debates. Debates are a good thing, as it’s important to hash out differing opinions, especially when exploring a new idea. But if you take everything personally, it’s going to be tough road to hoe.

Fortunately for the early Capterra team, we survived the startup years—a feat made possible by the fact that, as a unit,  we all scored pretty well on these traits. To anyone thinking of starting a new business completely alone, think twice, particularly if it is a new idea. I can all but guarantee that it will be way more difficult than you think.

Having partners makes all the difference.

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About the Author

Michael Ortner

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Mike started Capterra in 1999 as the first website dedicated to helping people find the right software for their business. Today, Capterra lists over 30,000 software companies, displays more than 250,000 software reviews, and receives over 3,000,000 monthly visitors. He's been featured in the Wall Street Journal, Washington Post, Fox News, and Inc. Magazine, among other publications, where he's spoken on topics ranging from the business software industry to running and growing a business in the 21st century. Mike received a business degree from Georgetown University and a philosophy degree from the University of London. He lives in McLean, VA with his wife and six children.


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