Mark McDonald and Josiah Humphrey are not terribly concerned with conventional wisdom. The men, Australian entrepreneurs, started developing and optimizing websites as teenagers, skipped college and started their web and mobile app company, Appster, in 2011 when they were not yet 20. They shunned outside funding and put what little money they had into office space, setting up shop in downtown Melbourne, right next to Google and IBM.
And while many co-founders eventually claim different spots on their company’s organization chart, Mr. McDonald and Mr. Humphrey settled into their shared role as chief executives.
So far, the arrangement seems to be working. In three years, the co-C.E.O.s have led the company to $10 million in annual revenue and 110 employees, and they are adding 50 to 60 employees this quarter. They have just opened an office in San Francisco, and they have a team of executives and board members that includes a former chief financial officer of PayPal, David Jaques.
While the men are not opposed to bringing in a professional C.E.O. eventually, they say there are more benefits than pitfalls to working side by side for now.
“We think we’ve achieved these results because there are two of us, not in spite of it,” Mr. McDonald said.
Some of the advantages of having two people in charge are practical, namely having two people to tackle a growing company’s endless to-do list. There is an emotional benefit as well.
“Having that support, especially in the early days, is critical,” Mr. Humphrey said. “You’ve got that one person in the company who has the same level of leadership and can be a real sounding board.”
Of course, with the shared responsibility come complications. “What you lose is agility,” said John Ganotis, who teamed up with his friend Eric Adamowsky to start Credit Card Insider in 2012. The two worked as co-chiefs until August when Mr. Adamowsky left, amicably, to pursue another business.
Although the partners were careful to divide responsibilities, “there are always going to be gray areas,” Mr. Ganotis said. “It’s hard to know who should have the final say.”
John DeHart and Ken Sim came to a similar conclusion nearly a decade after they founded Nurse Next Door Home Care Services in Vancouver, British Columbia, to provide private home care to seniors.
Early on, the setup had advantages. “We probably wouldn’t have grown as fast as we did if we didn’t have each other,” Mr. DeHart said. Today, the company, which was founded in 2001, has 300 corporate employees, two company units and more than 90 franchise units.
“On the softer side, I can’t tell you the number of times I wanted to quit, and John said, ‘No,’ or he wanted to quit and I said, ‘No,’ ” Mr. Sim said. “There are times when you’re in a deep, dark hole, and your business partner is the only person who can understand.”
Yet, eventually “the cracks started to show,” Mr. DeHart said. As the company expanded, the leaders found they were at odds on many decisions, from how to manage cash flow to where to expand.
“There was no right or wrong answer, just different views,” Mr. Sim said.
This might not have been an issue had their debates been settled quickly and behind closed doors, but their disagreements tended to spill over to the team.
“You started seeing silos,” Mr. DeHart said. “That’s when it becomes clear that you need clear leadership — one strategy, one vision and one decision maker.”
On that point the co-C.E.O.s were in agreement. In 2011, they created a board of advisers to help them figure out a solution. Ultimately, Mr. Sim handed the reins to Mr. DeHart and took an advisory role on the board.
“You can have a company with co-founders who are equal partners,” Mr. Sim said. “But at the end of the day, one person has to have the final say.”
Greg Smart and Tom Gordon made the same call in Fayetteville, Ark., in 2004, soon after starting Slim Chickens, a franchiser of restaurants that sell freshly prepared Southern comfort food.
“We had our first annual meeting for our S corporation and someone had to be the C.E.O.,” said Mr. Smart, who had no qualms about deferring to Mr. Gordon.
Initially, the decision was a technicality. Today, however, the founders say that a clear chain of command has been essential to building the business, which has nine company-owned locations, five franchise locations and 50 units in development. “We’re still equal partners,” Mr. Smart said, “but we have one clear voice at the top of the organization communicating with the rest of the team. For us, it eliminated the possibility of people in the organization playing us against each other.”
At Appster, the co-C.E.O.s have developed a system for dividing responsibilities and letting everyone know who is working on what.
“With a lot of co-founder situations, you have one who fits in sales and another who is more technical. But since neither of us fits exactly in those buckets, we figured out how to work together,” Mr. McDonald said. “At the start of every quarter, we agree on what objectives we want to have completed and who is going to ‘own’ what.”
In the most recent quarter, for example, Mr. McDonald focused on introducing two products, restarting two sites, and hiring a head of sales and a chief marketing officer. Mr. Humphrey focused on preparing documents for the company’s first go at raising outside capital, bolstering marketing events and taking a closer look at their customer relationship management software.
They post their assignments on an internal platform that is used by everyone in the company to track progress and collaborate. And when it comes to far-reaching company decisions, they make them together.
“If we don’t agree, our policy is to test both ideas,” Mr. Humphrey said. “We both have tremendous respect for data.” If something cannot be tested, their rule of thumb is simple: “If one of us is absolutely opposed to something, we don’t do it,” Mr. McDonald said.
Leaders who have worked in tandem advise being open to changing titles as the company evolves. “It’s really a progression,” said Morris Sutton, who in 2013 founded a technology company, Priv, along with Joseph Terzi. “When you start, it’s all hands on deck.”
Based in New York, Priv connects users with health and beauty professionals. Early on, the partners decided they would be more effective if they divided responsibilities. Mr. Sutton applied his investment background to operations and finance, while Mr. Terzi used his web development experience to oversee creation of their mobile app. In January, the founders brought in a third partner, Alain Schibl, who is executive chairman.
After Priv had its debut in March, the partners changed gears, dividing their responsibilities geographically. Mr. Terzi moved to Los Angeles, where Priv was introduced in September, and he will continue to oversee growth on the West Coast. Mr. Schibl, who is based in London, is focused on rolling out Priv there by the end of the year. Mr. Sutton continues to manage the office in New York and will lead East Coast expansion.
Mr. Terzi and Mr. Sutton share a common vision, even if they do not always agree on details. If a dispute comes up in front of the team — they have about 25 employees — they are diplomatic. “We say things like ‘how do you think we should do this?’ or ‘with all due respect,’ ” Mr. Sutton said with a chuckle.
Behind closed doors, the childhood friends are not always so deferential. “We can be very blunt with each other,” Mr. Sutton said. “There’s no need for sugarcoating.”
Originally published on New York Times