Founder The term founder is frequently heard when discussing businesses or startups. But what does it actually mean?
Simply put, a founder is someone who starts and establishes a business or company from scratch. They are the ones who come up with the initial idea, plan, and take the first steps in building the business. A founder can work alone, but they often build an initial team and start developing products or services from the ground up.
A founder doesn't just have the idea; they are also responsible for running, developing, and growing the business so that it can survive amidst market competition. So, if you're curious about the tasks of a founder, how they differ from an owner or CEO, the challenges they face, and their salary, read this article till the end!
Founder’s Role in a Company
At the early stage of a company, the founder plays a significant role. In fact, they are often the ones doing almost everything. Here are some of the key responsibilities of a founder:
Determining the Vision and Mission of the Company
The vision sets the long-term direction of the company. The founder is responsible for creating a "big dream" and making sure the whole team is aligned towards the same goal.
Designing the Business Strategy
From market segmentation, revenue model, pricing, to growth strategy—all of these are typically designed by the founder at the start.
Building the Initial Team
The founder will find people who believe in the business idea and are willing to work hard together. This initial team is crucial as it sets the tone for the company’s early direction.
Developing Products or Services
Whether it’s an app, service, or physical goods, the founder is usually directly involved in the development and refinement process.
Seeking Funding
The founder must understand finances. If additional funds are needed, they must convince investors, create pitch decks, and participate in pitching sessions.
Managing Operations
From marketing and customer service to daily operations, the founder is often hands-on in the early stages.
So, don't think that a founder just sits back in a luxury office. They are the first to "roll up their sleeves" and get involved in every part of the process.
The Difference Between Founder, Owner, and CEO
These three terms are often seen as interchangeable, but they are actually different. Let’s break them down:
- Founder: The person who establishes the business. They are the initiator and the first person who builds the company from the ground up. This could be an individual or a group of people.
- Owner: The person who owns shares or has ownership in the company. Owner could be a founder, but they could also be an investor who buys shares without actually starting the business.
Example: An investor who buys 40% of a company is considered the owner, but they may not be the founder.
- CEO (Chief Executive Officer): The highest managerial position in the company, responsible for executing the vision, mission, and operations. The CEO could be the founder, but they are not always.
Sometimes, when a company grows, the founder may hire a professional CEO to focus on innovation or other strategic aspects.
Also Read: Small Capital Businesses That Don't Have Many Competitors Make Profits
Challenges Faced by Founders
Behind the glitter of a successful founder, there are many challenges they must face. Especially in the early stages of building a business, the hurdles can be overwhelming:
Limited Capital
Many founders start their businesses with personal funds, while operational costs continue. This is where efficiency and creativity in budget management become essential.
Unproven Products
The product may still need market validation. Founders must be prepared for multiple revisions based on user feedback.
Building a Solid Team
Finding partners or an initial team who share the same vision and are willing to work hard together is not easy. At this stage, team cohesion is more important than credentials.
Mental Pressure
Important decisions, the future of the team, and investors' money all rest on the founder's shoulders. It’s no surprise that many founders experience stress and burnout.
Failure Is Not Taboo
Data shows that most startups fail in the first year. Founders must be ready to fail, learn quickly, and rise again.
What is a Co-Founder?
When building a business, the founder is often not alone. This is where the term co-founder comes in. A co-founder is someone who helps establish the company alongside the main founder. They have made significant contributions from the very beginning and often have a specific role, such as technical, marketing, or financial.
For example:
- You have a business idea (founder)
- Your friend helps create the app (co-founder)
- Another friend handles the initial marketing (also a co-founder)
Ideally, the relationship between a founder and a co-founder is one of partnership: mutual trust, complementing each other, and having the same goals.
Founder’s Salary
Do founders get paid? The answer depends on the stage of the business and the company’s financial condition. In the early stages, many founders do not take a salary as the funds are focused on product development and operations. If there is a salary, it is usually just enough to cover basic living expenses, ranging from IDR 0 to IDR 3 million per month.
As the business starts generating revenue or secures seed funding, founders can begin paying themselves a reasonable salary, typically ranging from IDR 5 million to IDR 15 million per month, depending on their role and the company’s cash flow. When the company grows and enters the expansion phase or Series B funding, the founder’s salary can range from IDR 20 million to IDR 100 million++ per month.
However, the most important income for a founder is not just their salary but the value of the shares (equity) they own, which can be worth billions if the company succeeds.
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