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I believe that getting information is an important task when running a business, and particularly when you have to make decisions in an executive board. Basically, one of the co-funders of my startup is surely a good market developer. However, when embarking on this project with me, he chose to do so conscious to enter a new field. He was working in the electronics sector, and we entered the culture sector.

The problem is that, in a new sector, you should try to get information in order to be able to plan effective actions - particularly when you are a startup and you have to make effective actions with little money. He tends not to, and just shift previous methodologies to the new field. As a simple example, a few months ago he started to work on a financial plan. I asked him to calculate exact costs for personnel, and he replied "in my previous company we were counting 80% taxes on one's salary, so trust me: it's that". After a few months, I obliged him to find some exact information on salaries for Italy, and we discovered that we could cut costs to half the previous estimation.

As another example, I asked him to just find the time to speak with 1 person in the field of cultural management (to get real feedback from somebody who doesn't know and start understanding people's reactions), but in 6 months he has talked to nobody.

Overall, I just understand that he does not really proactively get professionally informed, and I do not understand whether I should consider this a a red flag, or to apply different methodologies myself to run the company.

Honestly, he does not even get informed in his own field. He should be the "business expert", and he did not even know (nor proposed to do) that projects usually need a business plan to start. After this episode, I got control of the situation entirely and the project is finally developing well (with 90% of work done by me). As a last example, we were informed our business model could have been improved, and we came to agree he would have asked a friend of his on the business model of a research facility to consider further options. For 6 weeks he did not get informed on it, even though he passed a 1-week holiday with this friend of his.

Have you got an opinion to share on how it would be best to deal with the situation?

I am afraid this approach may turn into a weakness in the future. For example, since we are in a pre-seed phase (but we were selected among the 9 startup finalists in a EU-run startup competition), I suggest to spread tech development on multiple years to keep costs low, while he is pushing to get everything already (with costs that I doubt investors may be interested to fund), and doesn't really consider my tech-development estimations (I am the CTO), adding what is for me unnecessary costs at this stage. For information, we are 4 executives, I am the founder, and we have to come to an agreement for equities next month.

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  • Gioven by your example he is just incompetent. "in my previous company we were counting 80% taxes on one's salary, so trust me: it's that"." - it is possible he mixed up Taxes with General Overhead. Also Taxes would be dependent on salary (progression) AND COUNTRY - but NOT (!) depending on your sector. THis sounds like a very incompetent statement. THAT SAID: Exact also sounds anal - you really nee a rough number for planning only. – TomTom Dec 23 '20 at 22:37
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    Hello Luca, welcome to The Workplace. Please take the tour and read the help center to see what sort of questions are ok and on-topic to ask here. Currently your post, although well redacted and laid out, lacks a goal we can address (one off-topic reason) and also is asking for our opinion (another off-topic reason). Please check the links I mentioned and edit your post to address these issues so we can help you with good answers. – DarkCygnus Dec 23 '20 at 22:37
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    "I suggest to spread tech development on multiple years to keep costs low, while he is pushing to get everything already (with costs that I doubt investors may be interested to fund), and doesn't really consider my tech-development estimations (I am the CTO), adding what is for me unnecessary costs at this stage."- please explain to me how NOT going for an MVP as fast as possible would be an advantage? You generally push for development as fast as feasible because the overhead and the world do not stop. – TomTom Dec 23 '20 at 22:38
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    I do not understand whether I should consider this a a red flag - It's a glaring red flag. – Joel Etherton Dec 24 '20 at 17:25
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    @TomTom If going for an MVP would require devs to be hired next year, vs doing it on your own may take 2 years but no overhead, the second may be preferred. I was part of a startup that sold for 125M (on <20M invested) where the founder worked for 7 years before hiring employee number 1, because it was pure research work. Sometimes going fast costs too much. Scaling fast is sometimes the right move, but not always. – Gabe Sechan Dec 26 '20 at 23:36
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If I had been in your position, I would take following steps:

  1. Take this situation to other 2 founding members/executives and analyze what is their stand on this matter. Evaluate the best way for equities based on performance and pros/cons of terminating this non-performing executive
  2. Then lookout for another executive/member or consultant or employee who can take over these responsibilities in case of current member is resigned/terminated/disassociated (this is your backup plan that your operations are not orphaned suddenly)
  3. Present this scenario to this executive who is not performing (keep all 4 founding executives together in this meeting) and give him choice of either workout the solution (and put the actions and bring results) OR exit because of non-performance
  4. Define your organizational procedures/work-flows on paper and ensure that all 4 founding executives + any employees or project associates are following the procedures properly so that none of the procedures are skipped for long time which can cause damages to your project/business. All procedures shall have proper TAT or timeline defined so that things do not slip out of hands badly
  5. Ensure to you have proper IP/patent/copyrights procedure of your work so that you are not surprised when your current expert member goes rouge and you can protect your assets. If I feel somebody is intentionally not performing duties (which he was performing well in his previous organization), I better equip myself with extra defense to avoid back-stabbing by somebody. Do not disclose crucial/critical information, research results publicly until your patents/protections are ready to protect you.
  6. Learn by self to prepare business plan and you (all executive founders) must have clear understanding and transparency on your business plan and progress.

You should not hesitate to ask for help in any subject which you are not expert of. Gain the knowledge first but decide best only after analyzing the knowledge and experience.

Thanks

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