Rather than some of the suggestions in this thread that would most likely result in an unpleasant ending of your venture I'd suggest that both you and your co-founder seek help from a third party you both trust to give you good advice, and that has relevant experience.

Another thing you should do is talk to your customers, and figure out what it is that you can do to make the sales work more effective.

You've failed to do the 'verify' part earlier on in your relationship when you could have done it without cost, so now you're stuck with the consequences of the 'trust' bit. Don't worry too much about it, it happens to all of us.

I'm assuming your product is business-to-business because you mention direct sales to clients, selling in that world is a skill.

So, not all is hopeless here, skills can be improved and even if you're not selling nearly as good as you should be you and your partner are selling something, now you need to identify where in the sales process you drop the ball and correct that.

Rinse, repeat, and it should end out ok at some point.

Attempting to remove your partner by force or to quit by walking out of it is going to destroy your company and your investment with it.

Probably your partner is just as disappointed as you are, you have a common goal here so work together to get it solved, it's far from hopeless at this stage.

0 sales or no product that would be a real problem, some sales and a product that is at least acceptable to some customers sounds like a fixable situation to me (at least, without much more knowledge).

Another alternative that I haven't seen suggested yet is find a buyer for the whole project.

edit: Maybe you should talk to flavio87, see if he's interested in taking over your project, from what I gather he's doing something comparable (but he's been at it only for about 2 months iirc).

See this posting by him:

http://news.ycombinator.com/item?id=1188524

best of luck.

My first advice would be for both you and him to read "The Art of Profitability" by Adrian Slywotzky. It's essentially an encyclopedia of deals and a very good book. (Derek Sivers summarizes it here: http://sivers.org/book/ArtOfProfitability)

I've seen guys go from barely able to say hello without getting their tongue tied up to being able to pull in 6 figure deals without breaking a sweat (contract work, web development), I really don't know this guy at all but he's already selling, all he needs to do is to improve what he's already doing.

Going from 'not being a salesguy' to 'being a sales guy' is a lot harder than going from 'being a not so good sales guy' to 'being a salesguy that is a bit better'.

Even an experienced salesperson would have a hard time selling a product he has no experience with, and that has only just been 'baked', they should have overlapped much better with the development but this product seems to be 'all or nothing' so that may have been harder than what we know from the info given. Building up a sales pipeline takes time, and as you sell a couple of times you usually get better at it.

That's not what I said.

But the guy is already a salesman. So we're not teaching someone to sell that doesn't know how to.

He needs to improve his skills, and that's teaching someone how to sell as well, but not from scratch. Or isn't it ?

OK, I didn't realize you were from Netherlands until I read that sentence and clicked on your profile. In English, learning does not imply teaching.

But you misinterpreted my use of it, so what's your point?

I see that I'm getting downmodded on top of having to waste my time on this, so that'll teach me how to help people with their English next time.

If you bothered to learn you would know that most Dutch people speak English, and that it's a required course in schools.

But that's OK I'm happy to teach you.

Just for thoughts.

On the consumer end, everything is perfect. Sales are up and user base is doubling every 2 weeks. Mixed responsibility. (I do customer support, SEO, design, etc and we share marketing ideas)

On the business end, we are still stuck with crappy deals: low margins, poor brands, etc. His responsiblity.

We are currently considering bringing in a sales guy/girl (for equity & comission). But while I still have a ton of work on the tech side, my co-founder who was supposed to be CEO and sales has so far failed on the sales dep and is not impressing me with his biz decisions nither. Thats the big worry.

As a startup founder you are the face of the company and there is no excuse to not talk to customers and close deals. Your are small team and there is no CEO or VP or Sales. It is you and him to close the deals. If you want your company to survive a simple phrase will do, do whatever it takes.


And if you think this is not what you signed up for than follow the advice of many, stop it now and fast.

If you are not making enough margin, then are you asking for more money? Why not? Maybe you are not delivering enough value. You have to show people how they will make lots of money before they'll give you any of theirs.

Don't you mean their product ? Or are you reselling/rebranding ?

In other words, is the transaction with the end-user yours or is it make by the businesses that you have the contracts with ?

Getting big name brands to sign off on an unproven scheme can be pretty hard, using lesser known brands as a way to gain entry is by itself not such a bad thing, and bad margins can be incrementally improved upon proven performance, so you have some leverage there if you work at it.

I understand your reluctance to spell the whole thing out here but if you want actionable advice then you probably should take the plunge or take it off-line somehow.

Even a salesperson that you bring on board is not going to be an instant game changer, bringing a sales pipeline up to speed takes considerable time.

The deals they have closed so far, are measurably better. (We even managed to get two biz owner that due to personal connections told us a bit more than fair about their dealings with one competitor).

So I am pretty certain where the weak spot is (and it was admitted to be so).

I am posting now because the competition is growing faster and widening the gap.

PS> Excellent comments and questions so far. I am reading the links and got some food for thought.

Sales being the 'weak spot' is easy because that's always the weak spot, but that doesn't mean that that is the root cause.

If your co-founder admits to his shortcomings but does make some sales that actually gives me a lot of hope.

If he doesn't execute on that plan then it's time to talk about buying out his share or getting someone else to buy it out. Do you have a partner agreement? What are your options?

Buying wise, we both are at the end of our savings, no one can afford to buy the other. And there currently doesn't seem to be any funds raising in sight.

Offer him some shares or options in the future company but tell him this isn't working out. He'll say he already owns "half" but the truth is if you walk away he likely doesn't have a damn thing.

Offer him some equity to walk away or tell him you're quitting.

I would talk to your partner and say "let's come up with a timeline where you hit these goals or we look for a third-party person to buy you out". If he can hit those goals, or hit those goals with the help of a commission only salesperson then your problem is solved. If not you start looking for a third-party.

If that's truly the case, then you're done as business partners.

Finally, someone explained it to me from a different perspective: If my partner didn't want to leave then I was the one with the problem, not him. Instead of looking at what I was missing by him being there (a fact I couldn't get around), I should look at what I could be doing on my own without him. I talked to my partner about it and we agreed I would leave and keep some of my shares instead of a buy-out which the company couldn't afford at the time.

8 years later he's still running the company the way it was after I left. I sold my shares to a new partner for a price that was many times what I would have received if I was bought out when I left. In the past years I've been able to build a company like I envisioned the first time, sold it and am now in the process of repeating that for a second time.

Looking back I've come much further than I would have if I stayed at the company. My former partner found the perfect balance between his company and his family life, and we've been closer friends for the past years than we had been before working together.

http://vimeo.com/11491691

http://danieltenner.com/posts/0005-starting-up-with-a-friend...

Some thoughts:

Generally, if sales is hard, it's also because of the product development. Don't blame all of it on him, your product is not as amazing as you might think.

My main takeaway from it was don't assume that you and your co-founder are on the same wavelength - write down explicitly what you are agreeing on, and be concrete with figures e.g. "I'm willing to work 8 hours per day, 6 days per week", or "I'm happy to consider this successful if I make $100,000/year" etc

This question is asked here with some regularity - it's one of the most common issues in startups. The consensus is almost invariably:

  - talk to him
  - if it's still not working out part ways
  - offer to buy him/her out if you can afford it
  - don't leave anything hanging (unresolved ownership issues etc)

Some people have shotgun clauses: Offer to buy him out, or be bought out at the same price.

It is never just one thing. It could be you are selling at the wrong time of the year, wrong customers or perhaps wrong pitch?

If he truly does suck at selling you need to have that conversation and find someone else to sell. Find out what your co-founder can excel in and move him/her there.

Find out the real, real, real problem and see if it is something you all want to fix together.

I read a neat post today that I think applies (your co-founder is providing poor customer service to you): http://michaelhyatt.com/2009/09/four-strategies-for-respondi...

If someone sucks at sales, they're going to suck at sales. Of course, one could learn sales etc - but the ONLY value that he brings is sales, and he's supposed to be good at it already.

And then he says you should do sales too? Fuck that. Find someone else, FAST.

First of all, understand that he needs to quit. When someone is concerned enough that they post online, it means the situation is bad. So ignore any advice on improving his sales skills.

It's hard to fire your friends (been there, done that). Depending on your relationship, do it nicely, with transitions. Ideally, you want to have a frank discussion where the joint conclusion is that he is not working out and should stop. That's not that hard. If he is genuinely trying to help the business, show him that by getting someone else on board, the business will be better off.

Finally, there is the issue of stocks. Hopefully you had vesting in place. So one way is to go by that agreement. He worked 1 year out of 4, and hopefully you didn't split 50/50. So if you had split originally 66/33 for instance, you'd now be at 88% for you, and less than 12% for him. Which to me is sounds about fair. He did do stuff for a year, right?

For future reference, this is where you went wrong. He should have been out there selling screenshots and powerpoints, thus generating leads and design feedback, for the day one.

When something can fail, it should be given opportunity to fail as soon and as cheap as possible.

Everyone is great at Sales if they are passionate enough about what they are trying to create. Think differently about that as well.

Who calls the shots? If it is you, you need to call a shot right now or drum this up as future business experience. A great leader will accept responsibility and do something about it.

Good luck as those who hope die fasting according to Hemingway. You have a great chance to be a leader and turn this situation around. However, it may be a case of cutting your losses and moving on. If you want something bad enough you can bounce back. Savings/Smavings... non-sense talk.

You can position the route of x (him staying) = Death/failure (if you believe this in his current role). Thus, you may be able to offer Y (maybe some "departure" equity shares) so you can maybe bring in some more aligned resources. Bottom line, this is your marriage, so you need to get communicating or you are bound for failure.

I hope this is not the case.

Also, though the initial strategy was to use him for sales he may not have it in him to succeed on this task. Consider bringing in somebody new to work on selling your product and find another area for your co-founder to contribute.

But if you insist on continuing, give him the straight facts: You are able to effectively contribute something of value (the tech), and he is not (there is the sales, but he's not able to do it). Therefore, he needs to let you bring in a real sales person (who can be paid on commission, and maybe become another owner as well since the pay will stink at first). This is to give the business a chance at success. Even in this scenario all three of you will probably need to find day jobs, especially the current co-founder since he won't be allowed to get any of the profits until he figures out how he can contribute. And any new ownership given to a new sales person (if you do give them any ownership, that is) will come out of your current partner's share. And from today forward, your current partner will not be counted as a continuing contributor - except maybe very minimally as an advisor, if that is worth anything.

You might be able to strike a buyout deal for something other than cash immediately. I'd be really careful about doing this though as it might impact your future chances of fundraising.

I'm not an expert on this sort of thing, and since you mentioned your savings are running out you probably cannot afford to talk to someone who is, but my guess is you're stuck with him. Assuming you are, how can you make the best of it?

If he admits that he's not that good at sales, he's already taken the first step to getting better. That's at least a good sign. Perhaps get him to attend some classes or seminars on salesmanship. Have him review the sales calls he has made and try to figure out where they went wrong.

If you can swing it, maybe even just hire a salesman. Assuming you can't get rid of your partner, you'd rather him do nothing than ruin relationships with potential clients.

If you feel real passion for your idea and if you see a lot of potential then you can probably arrange some kind of buyout or work something out with him. If he can see that you're real serious and he isn't, he should step aside (if he's a stand up guy). If he won't, then there's no point trying to turn him into someone that he isn't. Move on.

In my opinion, this means he admits he cannot live up to his end of your verbal contract. He should step aside and relinquish at least enough of his stake to attract someone good enough to do it right and take over.

http://nukemanbill.blogspot.com/2008/07/how-to-hire-idiot.ht...

I had a similar situation: I was moonlighting on a very promising startup for 2 years. My partners were supposed to do the fundraising, biz/development, or pitch in money. But it didn't happen at a level that I consider competitive. In the end things started to get worse: they don't understand the tech components very well but still had strong opinions. And that starts to become a -ve contribution. So I split from them and I am working on a few things on my own. Looking back in hindsight I feel vindicated.

I'd recommend that you cover all the conversation topics that others have suggested above. If it does not work out then cut your losses and move on. It may seem like a big deal after having invested time and emotions with this person but you should do what is right for you.

Asides: I feel that if an idea involves tech development then techies should work on it by themselves for a few months and then bring in the biz/dev guys. That way you know exactly what you are looking for and bring in the right guys that suit your business (connections, industry knowledge, etc.). Moreover you get to evaluate the biz/dev guys more closely since you can be with them when then demo the prototype. The only caveat here is that you need to have some prior startup experience so you can sort out the high level business aspects (users, customers, reveune models, etc.) on your own before you specialize your code/prototype too deeply.

* Your expectations aren't too high * The problem is with the salesman, not the product. * There are other people who can sell this better * You can afford to hire someone else to do this, or you are willing to give up a % of YOUR remaining stake to take a chance on someone else.

I would just level with your friend and tell them you'd like to give someone else a shot at sales. Let your friend spend his time researching new market directions for the company and making contacts.

If that person is unwilling to let go, consider pulling on a third person at an equal split. I'm sure some people would disagree with that but 1) if that person won't let go, you're probably running out of options or 2) the competition might turn your current partner 'on'.

If you have a product that does sell, I would do everything I could to make it grow. You've overcome a lot of obstacles to get to that point. If you can make it grow with a third, you'll have more options down the road (like buying the second partner out).

As to how to go about it: it's like breaking up.

Have a short conversation and be very, very, very clear ("I do not want to continue this business with you"), don't go into the reasons to much (don't say "you suck", say "it's not working out"), and then shut up. Include a buy-out offer ("For X$, I can buy you out, or else we'll have to shut shop."). Then let it sink in, set a time to meet the next day.

The other alternative is to talk to him about your concerns and see if you can work it out. Perhaps more mature, but somehow I don't feel this is going to work out, since you are questioning the quality of what he does, which is almost impossible to change (versus something specific that he does wrong, which would be changeable.)

As more customers sign on, the sales will be a little easier. It's like starting a fire from scratch.

Good luck!

Thx SG

Got those answers? Great!

Why can't you implement those steps now? Really??

or

If your plan is so good, then find an angel to buy him out.

Please let us know how it pans out. Good Luck !

Really depends on the niche and target audience, but if you become very vocal about what you do, you might be able to snag a few initial customers to get things rolling so you can then have some breathing room to make the right decision.