The Truth Behind 8 Common Myths on Cofounder Conflict
Many entrepreneurs recognize the shocking statistic made famous by Noam Wasserman: 65% of high-growth startups fail due to cofounder conflict.
But many have not read his book and do not understand how he arrived at this conclusion.
Wasserman pulled data from a 1989 study by Gorman and Sahlman, who surveyed 49 VCs about 96 portfolio companies in danger of failing. The researchers discovered 91 of the 96 companies had problems within the management team. More specifically, 61 of those companies ranked team issues as a top-three factor contributing to failure.
The 61 companies divided by the total 96 companies identified comprise 63.5 percent, which Wasserman rounded up to 65 percent.
Why does this matter to you?
Much of Wasserman’s research — he surveyed 10,000 startups — describes the challenges, limitations, and dangers of building a company with friends or family. He found these teams featured greater instability than founding with strangers.
As a cofounder coach who has worked with companies backed by Sequoia, a16z, and YCombinator, I see this all the time. Here’s what I have noticed:
There are more startups now than in 1989.
There is a higher representation of friends turned cofounders than in the past.
There are unique systemic challenges not encountered in the nineties, such as building a remote, distributed team whose asynchronous communication often contributes to misunderstandings.
If this anecdotal evidence holds, cofounder conflict is more common today than in 1989 and far more dangerous to companies, founders, and investors.
Protecting this partnership offers one of the highest points of leverage to prevent failure. But unfortunately, I often hear several myths detracting from the ecosystem’s ability to improve teamwork in founding teams.
Let’s debunk 8 of the most common myths of cofounder conflict.
1. Cofounder conflict is “not a big deal”
Many founders and investors with old-school mentalities devalue soft skills and deny the impact of mental health on company building. They think you can push through conflict with willpower, as if naming a problem were the same as solving it.
Downplaying cofounder conflict almost always leads to greater long-term problems.
When upsetting emotions are unaddressed, they exert influence in meetings and uncomfortable feedback sessions and increasingly, environments start to feel political — walking on eggshells, hoping they can hang on long enough to get acquired or IPO.
Underestimating cofounder conflict leads to more emotional distress and less-effective team dynamics than could be unleashed if the difficulties were made explicit.
2. Addressing business issues fixes the problem
In our first call, many cofounders tell me their primary issue is a lack of alignment across key business areas.
I understand why they think that way. Pointing to business disagreements is a concrete way of showing things are not working. It’s a clear signal something feels “off” compared to the past and is less threatening than giving difficult feedback to underperforming team members or naming communication breakdowns.
While pointing to tactical or strategic misalignments is a comfort zone for most founders, it is often a symptom rather than the cause of cofounder conflict. For many founders, admitting there is a problem in the team elicits anxiety the issue might not be fixable.
But more often than not, improving the communication dynamics creates the opportunity for business issues to resolve on their own.
3. Thinking one person is to blame for conflict
I often speak with founders who are convinced all their difficulties relate to one person.
They think if this one person changed their behavior, everything would be fine. Unfortunately, this cycle of blame focuses too much on the individual rather than the systemic contributions to relational dysfunction.
I see this dynamic when resentment escalates, and early warning signs of conflict have been avoided. At this point, the conflict feels personal to such an extent it overshadows each individual’s contribution to communication challenges.
Much of the work in these situations involves externalizing the problem — an adage from narrative family therapy, shifting the problem from an individual to a systemic issue.
Once individuals can identify and understand their contribution to the shared problem, change can be made.
4. Believing a restructure will fix everything
When individuals are entrenched in a business-first perspective, they think restructuring will alleviate tension between two parties who are not working well together. And while bringing in reinforcements can improve the dynamic of leadership teams, this falls into a classic trap of what Bowenian family therapy calls triangulation.
Triangulation involves bringing in a third person to reduce tension in a dyad. Here’s what happens in triangulation:
The tension between two individuals is spread to a third person. This alleviates some of the tension in the primary conflictual relationship but also burdens the third person with the exhausting job of playing team counselor.
The conflict causing the dysfunction remains unaddressed, exerting influence on all three individuals and their loved ones.
Restructure does not solve everything. Same with adjusting compensation or equity splits. These merely symbolize something deeper — power, respect, recognition — remaining unnamed.
5. Venting to the board, family or team members will help
This is textbook triangulation. It does not work. While several of these moves reduce tension for the dyad, they also have a negative impact similar to the ripple you see when you throw a rock into a lake — the impact touches everything.
When cofounders vent too often to their partners about tension in their work partnership, their partner eventually tires. They begin identifying with your powerlessness, which makes them want to disengage. Feeling depleted, they are unable to give you the emotional support you need, leading you to greater upset and a strained familial system.
Talking to other team members also tends to have a horrible impact on your culture.
Several non-founding c-suite execs and managerial employees contact me on behalf of their feuding cofounders. This tension destabilizes employees, who fear for their livelihood, doubting the company’s stability. It creates a culture of back-channeling, which reduces productivity and increases churn and burnout.
I have also seen young teams discuss issues with their board. This is probably one of the most dangerous strategies because it impacts future funding and encourages mismanagement of investors, who may feel pulled to overstep and intervene.
Even if such interventions are helpful, they disempower the founders and reduce their effectiveness. Their fitness remains in question long after the issue has been addressed.
6. Thinking growth solves all problems
Growth solves many problems, but cofounder conflict is not among them.
Founders do not want to “shake the boat” when things are going well. The fear is that if they say the wrong thing and create a deeper argument, it will slow momentum and threaten the success of the organization.
Unfortunately, this creates a pressure cooker in which the urgency to solve new problems for the first time increases while the ability to provide honest feedback decreases. Founders experience increased agitation while walking on eggshells — many call this experience the “bull in a china shop.”
Because high-growth periods demand significant role-related transitions — eliciting imposter syndrome, among other things — founders frequently displace their frustration onto one another instead of the more etheric factors they cannot control.
The emerging stressors of increased organization, structure, process and people problems exacerbate conflict. One cofounder often scales faster than the other, creating even more tension in the team.
These patterns reveal the importance of prioritizing communication and teamwork before, not after, product-market fit.
7. Believing cofounder conflict can be avoided
Cofounder conflict can be thought of as existing on a spectrum from low to high based on the level of affective intensity and degree of disruption on business performance.
Low levels of conflict are a normal occurrence in founding teams.
Business partnerships are under considerable stress due to the economic pressures early-stage companies experience. As with other relationships, the sign of health is repairing after arguments and flexibility in the relationship to adapt to changing circumstances.
High levels of conflict are a different story.
Sustained conflict disrupts cognition and communication and contributes to burnout. As interactions become more rigid and frustrating, survival mechanisms like avoidance increase, and the partnership becomes less adaptive to change.
Here’s the truth: Cofounder conflict is ubiquitous. It will happen to you, regardless of intent and team composition.
The real question is, “How will we manage conflict when it comes up?”
8. Assuming conflict can be solved quickly
Many founders want an immediate solution to their problems. It’s difficult to tolerate their anxiety about their business and partnership.
But no perceived “razzle dazzle” of Billion Dollar Coach Bill Campbell can fix your issues in two sessions. If one or two meetings could permanently change deep-seated relational challenges, therapists and coaches wouldn’t have jobs.
Most cofounder issues are not easily solved, as they relate to deeper layers of your personality and background. These contextual and unconscious factors must be taken into consideration for there to be a clear understanding of the problem.
Once the underlying dynamics are identified, the real coaching work of changing those interactive patterns comes. Then the founding team must stabilize by making these new habits stick into long-term routines and update their internal models of one another for optimal multi-year outcomes.
Yes, cofounder conflict is a pervasive issue in startups.
And yet, it is solvable.
I hope you and your team prioritize improving communication early so you can overcome the odds and avoid becoming an outdated statistic.