There’s a classic Silicon Valley adage that startups are an exercise in building the plane while flying it. With the sheer amount of unknown unknowns on every company’s trajectory, there’s a direct correlation between a founder’s ability to problem-solve and a startup’s chances of success. Even if you’re already off the ground when the engine sputters out, the path of even the shakiest aircraft can be course-corrected — as long as a founder is quick with solutions.
But there’s a crucial detail in this metaphor that goes unmentioned — the fact that there’s (almost always) a co-pilot in the cockpit. And while the extra set of hands is undoubtedly helpful, how one pilot decides to tackle the sputtering engine may come off like instructions in a foreign language to the other. To successfully keep the plane aloft, both pilots must understand each other completely and work in tandem. (All metaphors aside, we’ll note that founders could stand to learn a thing or two from how flight crews have been trained on collaboration.)
As far as co-pilots go, Labelbox co-founders Manu Sharma and Brian Rieger are an experienced crew. Ever since First Round backed the AI developer tool startup (which helps customers curate large batches of data through its AI-assisted labeling technology), we’ve had a front-row seat to how the pair turned an 11-year-long friendship into a lasting business partnership.
As CEO and COO, respectively, Sharma and Rieger have been steady on the controls since 2017, and through every squabble and growing pain, have cultivated a steadfast relationship that’s come a long way from their college days. (As fate would have it, the two met as classmates during a capstone competition at Embry-Riddle Aeronautical University — a school specializing in aviation and aerospace programs.)
The key to the duo’s healthy co-founder foundation? Investing time and intention into their relationship from the start, working in small habits to bolster the strength of their dynamic from the jump, so there’d be less built-up damage to repair later on.
Too many co-founding pairs find out the hard way that it’s all too easy to let conflict drive a wedge. (An of-cited figure notes that 65% of startups fail because of interpersonal tensions within the founding team.)
But while the stakes for navigating co-founder relationships are high, well-intentioned advice for facing these tensions head-on usually falls short. Because of the bespoke nature of co-founder relationships, there often isn’t as much tactical guidance to apply to the intricacies of each individual argument, personality or problem.
If you are on the hunt for this kind of advice, we’d recommend starting with the excellent tips psychotherapist and bestselling author Esther Perel shared on cleaning up your co-founder fights right here on The Review a few years ago. But if you are looking for small adjustments to weave into your daily workflows, there’s plenty to learn from how Sharma and Rieger have structured their co-founder relationship.
In this exclusive interview, Sharma and Rieger share five techniques they’ve honed at Labelbox that other founders can use to strengthen their partnerships at any stage. We’ll cover how this duo intentionally embedded their contradicting skill sets into their roles and how they use “spiritual alignment” to make unilateral decisions. They also share tactics for other founding pairs to utilize, including their rituals for spending valuable time together as the company grows, thought-starter questions for deep discussions and their unique experience sharing an executive coach.
While their advice may resonate the most with longtime co-founders, there are plenty of best practices to keep in mind whether you’re in the earliest phase of choosing who to build a company with or looking to improve your working relationship with the closest collaborators on your team.
TECHNIQUE #1: GET EXPLICIT ABOUT DECISION RIGHTS WITH THESE DO’S AND DONT’S
It’s easy to paint a picture about what often goes sideways when founders don’t have clear alignment on who makes the final call. Not only will this be confusing for employees — who, as Rieger points out, have a sixth sense for any rifts between you and your co-founders — but resentment could end up straining your personal relationship as well.
To get ahead of any debates over who owns what, Rieger and Sharma advise getting as explicit as possible about what titles each co-founder will hold, and further, what skills each brings that make them the best person to oversee that role.
They suggest starting by running through an exercise to capture why each co-founder is best positioned to make certain decisions. Once you and your other co-founders have an understanding of who owns what — and crucially, why — it will make conversations around future involvement in projects less complicated as the company scales.
Sharma and Rieger outline a few best practices they deployed when determining authority and decision-making that have kept their relationship healthy through nearly five years of company leadership:
DON'T: Shy away from unconventional assignment methods
“Over the course of Labelbox, we've both run every part of the company, at one point or another,” Rieger says. “In the past, the co-founder who cared about something more was given the green light to own it. We’d have a very direct or frank conversation about ‘I care about this more’ or ‘I think this is a good fit for me.’”
They never encountered another co-founding pair that approached decisions in this way — until they met one of the founders of Stripe at a First Round event for co-founders. “They said the same thing, and everyone else was aghast, but I was nodding along. It was fun to find another co-founder group that thought the same way we did,” says Rieger.
This delegation method worked in the beginning because it helped Rieger and Sharma move fast and make decisions quickly while growing alongside the startup. But it didn’t come without its challenges either.
“In the early days of Labelbox, we were constantly experimenting with our pitch deck to present to prospects. We’d discuss what the narrative would be and how we’d make a compelling pitch. We went through a number of iterations where I would have a point of view and go with that pitch deck and find success with selling with that narrative,” Sharma says.
“Yet Brian went out there with his own version of the pitch deck and he also found success. We came back and looked at each other’s decks and Brian would say, ‘You're too focused on features’ or ‘You need to have a problem, a solution and compelling value propositions.’ And I would say, ‘That's too broad. I want to be very specific.’ So that’s the sort of back-and-forth debate we would be in,” he says.
Sharma and Rieger found that sharing their conflicting opinions on projects they both were invested in often led to the best outcome.
DO: Lean into each other’s differences
Sharma and Rieger have become masters at studying what makes their counterpart tick. When assessing what job title each founder holds, (and ultimately, what functions that role would own inside the business) the two started by reflecting on the strengths that they admired in each other.
“We have very different skill sets. Manu is a doer and a product thinker. He’s very good at understanding the nuance around how technology should work or how products should work generally,” Rieger says. “He’s able to understand that quickly and synthesize it into a tool or product. He’s always pushing and driving and holding the team to deliver every single day.”
This philosophy gelled with how Rieger and Sharma envisioned not just the head of product and design at Labelbox, but the leader of the whole company as well. This made for a much easier decision to hand the title of CEO over to Sharma.
“I tend to be more romantic in the sense that I love the idea of building a solution that's effective in the context it's being designed for,” Sharma says. “That’s the thrill for me. The way users interact with a product brings me a lot of joy. Brian on the other hand finds a lot of joy in the process, in the inner workings of how these things were built.”
Because of Rieger’s zoomed-in approach toward problems and his appreciation for detail, the duo decided his best fit would be as COO and running go-to-market strategy.
“A lot of my role is building teams and taking risks and iterating to get these products right, and Brian’s role is to build organization systems, processes and a culture that enables us to build these great products,” says Sharma.
I always think of it as Manu’s got his machete out and he’s forging a path through the jungle, and I'm paving the road and creating the apparatus that allows that to keep happening.
DO: Think about the long-term arc of the business when it comes to equity.
A trap that many early founders and startups fall into, Sharma and Rieger observe, is jumping the gun on divvying up equity. “We talk to founders who say, ‘Well, I spent the past couple of months building the initial web app, so I’m going to take 60%.’ But I would strongly suggest thinking about the long-term arc of the business. Realistically, the first three months will have almost no value in terms of the long-term value of the company,” Rieger says.
What contributes to the overall success of the business in the first three months will look a lot different than the transformational pieces of the business three years down the line.
“It may turn out that the person you brought on for 30% or 20% or a lesser share actually flourishes and becomes this incredible leader of sales and has this immense impact on the business. When they realize they have that capability, they’re going to be thinking about the fact that they’re not partaking in the company’s outcome in the same way. That’s a risky area,” says Rieger.
Instead, Rieger and Sharma suggest thinking about equity more as earning it in the future and leaving space to revisit the conversation, to avoid steeping discontent. “Every day forward, more value is going to be created exponentially,” Rieger says. “That’s what a startup is.”
DON'T: Put off tough conversations for another day
Sharma and Rieger know that it can feel bizarre to outline clear ownership frameworks when you are just building in the beginning. But hashing things out early on in the relationship saves you from building resentment toward each other down the road.
“Deciding our roles at the beginning of Labelbox was probably one of the shortest conversations we had,” Rieger says. “One of the important things about it was there wasn't any underlying discontent with the roles as we set them up. Now, that could have been the case, particularly given how short the conversation was. Everybody just kind of agreed and went back to building, but that was so important at the time.”
Sharma and Rieger advise spending however long it takes to make sure all co-founders are satisfied with what the roles are going to be and who is going to lead the company.
“It's very common for co-founders to disagree as the company begins to scale or when it’s having issues,” Rieger says. “In those hard times, you really don’t want to be backed out all the way to like, ‘Hey, I think I should run the company instead and you should take a hike.’ The whole thing will come apart if you’re there.”
The dangers of waiting too long to reach an agreement on this, Sharma and Rieger say, will inevitably resurface once your company has scaled. (As we alluded to above, Esther Perel unpacks some of the dynamics at play in her Review article, explaining how an argument that starts with a co-founder walking in late can escalate to yelling at a partner for not pulling their weight — or as she puts it — a kitchen sink fight. “It’s the idea that when a fight starts, I’ll throw in everything I’ve been holding against you. By the end we’ll have no idea what we’re actually fighting about anymore,” Perel says.)
By the time unresolved founder conflicts reach this point, it may be too late to do damage control.
TECHNIQUE #2: BRING IN A SHARED EXECUTIVE COACH
Picture this: You and your co-founder are in the throes of a debate you’ve had several times. You don’t feel like you are being heard, and on the flip side, you don’t want to compromise on a decision. Sounds like a case for couple’s therapy right? At Labelbox, the solution to this conundrum wasn’t too far off.
It’s quite typical these days for founders or company leaders to work with an executive coach to sharpen up their leadership skills and manage any stress or overwhelming feelings that come with the high-stakes job. When Labelbox was starting out, this was the route Sharma and Rieger opted to take. “We were lucky to have been told within the first six months of Labelbox to get a coach, and we did,” says Rieger.
What’s decidedly less common is to bring in a shared executive coach that works with your whole co-founding team. But Sharma and Rieger swear by it. They break down how their executive coach provided value in each stage of their company’s life:
Develop new leadership skills
For founders who are switching from an IC role to an executive role for the first time, navigating that change can be daunting. An executive coach brought in during the early stages can work with each founder individually to help develop their leadership skills and ease them into a people managing position.
"For the first few years at Labelbox, my coach was very impactful in rapid leadership development for me," says Rieger. "I had only been an engineer for my entire career. I didn’t know a lot about how to be a leader."
How do you feel good at the end of the day when you aren't writing code anymore or designing a schematic for an airplane anymore? You are now aligning, guiding and coaching other teams, which seems scary at the beginning.
It seemed like this dark art or magic. My coach helped me put that into defined skills and outcomes and made it more tangible," Rieger says.
Align on misalignment
Once Sharma and Rieger felt their individual leadership skills were in a good place, they decided to shed their separate coaches and ended up using Rieger’s for joint sessions. Nearly all of these joint conversations centered around alignment, with the realization that how each founder approaches a problem is more powerful than the decision they ultimately reach.
The biggest impact of coaching for me has been understanding how each of us makes decisions and the context we are both operating under.
Rieger and Sharma suggest using a joint session to learn how each co-founder tackles a problem head-on. For example, Sharma learned that Rieger takes a more methodical approach to solving problems and needs space to digest and work with a problem, rather than attack it straight away (which is Sharma’s preferred M.O.).
“These are very different ways of dealing with problems and if I'm expecting Brian to solve problems in a constrained timeline that I'm projecting, obviously we will have a disconnect and misalignment of expectations,” Sharma says.
Here are a few more habits Rieger and Sharma practice regularly to make working with their coach more effective:
Find a realistic cadence. “We get together once a month with our coach, and it is our time to bring the hairiest problems that we are experiencing in our company that could be solved by working together,” Sharma says. “It’s through that joint session we’re able to rapidly arrive at a common understanding that we might not be able to do independently.”
Nip it in the bud. Another positive impact of shared coaching is having a third-party mediator on-hand to help your co-founding team squash any disagreements that come up. “In the joint coaching session, we're able to ask questions to each other and validate or invalidate our hypothesis very quickly,” Sharma says. “Our coach is not only mediating that but going multiple layers deeper into anything that we perceive of each other.” This ultimately helps the two reach decisions faster.
We want to be wrong for as little time as possible about anything.
TECHNIQUE #3: DESIGN AN EXECUTIVE TEAM WITH ACCOUNTABILITY IN MIND
As the company scales, the roles that founders play start to take a different shape, and a wider executive team (ideally) helps take more off of founders’ plates.
But your co-founder dynamic shouldn’t fade into the background just because more players have come on stage. Carefully thinking about how your roles interact with the rest of the leadership team can be something of a balancing act.
What may work in the confines of your own founder relationship might not be applicable to a whole group. Take Sharma and Rieger’s unorthodox communication style. Spirited arguments are a part of Labelbox’s DNA, and something that Sharma and Rieger wholeheartedly believe is necessary for uncovering the best solutions.
“We used to do this a lot more in the open because we've known each other so long and we're very intense and passionate, but also have a deep trust and alignment. But we would get into very vigorous debates that look like serious arguments,” Rieger says. “It’s how we elucidate with each other and figure out what to do,”
But as the company grew and an executive team became involved, the more important it became to have a unified message in front of the whole team. It was their coach who helped them realize that even if these were good-faith arguments, the perception of discord was causing confusion among leadership, and ultimately, was slowing the whole team down.
“This understanding and awareness was a journey for us,” says Sharma. “Of course, we had to adapt our own ways of decision-making. Us furiously debating on things would be seen by others as ‘These guys are fighting.’”
Here are their tactical tips for founders looking to seamlessly delegate decision-making rights to a broader circle and navigate their founder roles inside of a high-functioning executive team.
Restructure the org chart: “As the company grows, it’s very important that all of your teams have thematic leadership,” Rieger says. “What we were finding was there was some growing separation between our two functions. As teams grow, the product and GTM functions start to work together and have more leadership. We found that we needed more thematic, combined decision-making for that part of the business.” Their solution was to move GTM under Sharma and reduce the number of direct reports feeding into the CEO. “Now that we have executives in all these different functions, that becomes more scalable, because now there’s only a handful of executives that report to Manu for all of that.”
Every exec gets a scorecard. “The fundamental way we see the executive team is as a sports team,” Sharma says. “Each of us are players with roles to play — and a scorecard.” This scorecard refers to the responsibilities and scope of each role, and it’s up to the founders (or leaders of the e-team) to make these agendas as clear as possible.”
Pass over decision-making rights. Each executive at Labelbox gets full autonomy over their team, but with full autonomy comes full accountability. “That’s what matters to us. That a person running a role gets to decide nearly everything about their role, their department and their function. We actually expect that person to be making decisions, and if we have to step in and make those decisions for them, in a way they are failing the team.”
Fill out a RACI matrix to keep track of progress. One of Labelbox’s core operating principles is to use a RACI matrix. The chart, which is broken into columns of responsible, accountable, consulted and informed, is a favorite among project managers as a way to describe who is participating in a certain project and how they are participating. Sharma and Rieger place heightened importance on who is responsible and who is accountable. “We find it very useful to have just a single person assigned to an outcome,” Sharma says. “We then use the matrix to provide clarity to everyone on who is responsible for an outcome, who gets to decide one way or another about a certain topic.”
Rieger walks through an example of how Labelbox would use a RACI matrix to delegate responsibilities while creating a pitch deck for their next fundraising round. It’s broken into three rows, each separated by a different task that needs to be done in order to complete the full pitch deck. “The responsible box includes anyone who is working on that particular task,” Rieger says. “The accountable column should only be one person, and that who is accountable at the end of the day.” Any one person or team that you seek info from falls under consulted, while informed tallies up all the rest of the folks working on the project.
“The matrix itself, or the end product, isn’t really where the value is,” Rieger says. “The value is in the collaboration of it, or who is assigned in the different rows.”
TECHNIQUE #4: FIND YOUR RITUAL
In the early days of building a company, spending time with your co-founder is easy. You’re liable to feel as though you and your co-founding team are spending too much time together, working around the clock out of makeshift offices, or traveling together for fundraising pitches. But as your company grows, so does the volume of events clogging up your respective calendars.
“We found that as the company scales, we spend less time looking at the same things or working on things adjacent to each other because it’s just a larger organization. So we intentionally spend many hours together on Friday every week,” Rieger says.
The ritual came about so Sharma and Rieger would have uninterrupted time to discuss high-level pressures they see affecting the business. “These are often big topics that you don't typically have time set aside on your calendar to think through, like ‘Okay, I'm worried in a year that we might have undue pricing pressure,’ or ‘I'm worried that this team isn't gonna scale in the way that we need,’” Rieger says. “Typically your day is filled with more tactical things.”
The Friday sessions are designed to provide ample space for these wide-ranging talks, often hours at a time for the Labelbox founders. “You need that amount of time because if I make a comment about some broader more existential thing that I'm concerned with, or some big opportunity that I think we should think about and we don't have the time to talk about it, then my co-founder may not understand and that can be interpreted in a lot of different ways that are often not fully formed,” says Rieger.
To make the most out of their time together, Rieger and Sharma split these sessions into structured and unstructured times. For the first half, they worked with their coach to come up with two buckets of starting points to better guide their conversation. “Then we also have a lot of time to go to lunch and have more open-ended conversations to muse and let the conversation meander organically,” Rieger says.
For the first bucket, they lean on these questions to evoke reflection about the company:
What are your recent observations about the business?
What are the most important things we should be working on?
What is the biggest challenge you are seeing?
“When you are in the soup, it’s a little hard to see the whole thing. These questions are designed to force you to step back and observe outside your own world, challenging the ongoing thoughts in your head that are often contextual and narrow,” says Rieger.
The second bucket of questions is designed to create alignment. These are often big topics that can feel existential. Examples include:
What are the big opportunities out there?
How is the market shifting?
What have we heard from our partners and our customers and advisors that we value?
“We could easily start with a technical problem we’re facing that day or something like ‘How do I scale this database?’ but found that it makes it much more difficult for the other person to participate,” says Rieger.
We see the world very differently and usually the best ideas and solutions are a combination of both of those ways.
Whether it's structured time on your calendar or a weekly dinner where talking shop is off-limits, you’ll reap the most benefits by finding a ritual that everyone deems valuable. Those rituals — the places to practice — are how true closeness is built.
TECHNIQUE #5: CONSIDER YOUR “SPIRITUAL ALIGNMENT” IN ALL DECISIONS
As your company scales, there’s no telling what challenges will consume your day-to-day work as a co-founder. It could be grappling with internal turmoil, such as a key hire leaving at a critical juncture, or navigating external forces, like a fundraising round taking longer than expected to come together.
Crucially, your employees will be watching how you and your co-founder(s) steer through these conflicts. Rieger and Sharma recommend setting aside time at the very start to identify a founder “north star” — it will not only help you present a more united front when communicating with employees about a key decision, but it will also trickle down to inform everything from hiring and culture to tradeoffs you make on the product roadmap.
I see co-founding relationships no different than a musical band. High-functioning bands can anticipate what the next note you're going to play is.
“You have to build a co-founding team that deeply resonates with the same set of values because company building is really hard,” Sharma says. “In the toughest of times, it’s only those deep connections, and that innate desire to continue building that will keep people waking up the next day and choosing to work together again.”
To inspire that deep connection and intrinsic motivation, Rieger and Sharma advise taking the time to get to know your co-founder, on a fundamental level. That means unpacking the core values each of you brings to the relationship, and how those values might align (or misalign) in how you run a company. They call this “spiritual alignment.”
In their partnership at Labelbox, the single most important value that’s considered in every decision is craftsmanship. This approach springs from the pair’s strikingly similar childhood — despite growing up half a world away from each other.
“I grew up in India in a small town in a family of artists and engineers,” Sharma says. “An everyday experience for me was to go to my grandfather’s carpentry shop where he would make and sell furniture. My dad used to work in a textile factory, and I would go interact with these machines that converted cotton to thread and fabric. I spent most of my time in school building things that sparked my curiosity.”
Rieger also grew up in a family of artists and engineers — but in Davis, California. His father built furniture and dabbled in engineering himself, even building his own airplane from scratch.
Their backgrounds sparked joint curiosity about building and set them both on a path of product design, engineering business development — and care for the craft.
“When you spend a lot of time with tools and the act of creation, it’s very fair to say that people build an eye for quality, or what makes a great tool versus a normal tool,” Sharma says. “A great tool will give you delight that other tools don’t. It's a spiritual experience when you interact with things that are built with high intensity and high quality. Craftsmanship is the core value that brings Brian and me together and has kept us working together for all this time.”
This constant pursuit for quality not only connects them on a personal level but has naturally shown up as a core driver of Labelbox’s culture. See how they’ve translated it into a company value:
Labelbox is made of people driven by mastery of their craft and in pursuit of building the best products. Craftsmanship is the fine balance between perfection and a solution to the given constraints. To be a craftsman is to be consumed in a problem and to create your best expression of work as a result. You can't be a craftsman in every thing, you can only be a craftsman in a few things, but you do those things remarkably.
Over the years, Sharma and Rieger have developed an understanding that placing user delight above all else is paramount — a value that’s proven to be exceptionally useful to lean on during times of indecision or uncertainty.
“When you're operating with another co-founder and you're trying to steer the company like a ship, there are many moments where you're speaking by yourself to other teammates,” Rieger says. “It's inevitable that you're going to need to have a lot of margin and deep trust with your other co-founders so that you can make solo decisions on the fly, all the while knowing that your co-founder will always align with you.”
This article is a lightly-edited summary of Rieger's and Sharma's appearance on our podcast, "In Depth." If you haven't listened to our show yet, be sure to check it out here.
Cover image by Getty Images / Michal Oska / EyeEm