Latest / The Founder's Journey with Fexingo: First-Time Entrepreneurs, Failures, and Lessons Learned / How a Co-founder Breakup Saved Both Founders
Transcript
- Lucas: There's a story I keep coming back to about a productivity app called Sunsama. Two co-founders, Ashwin Kamath and Jordan O'Connor, built it together for about three years. Then, in 2023, they announced they were breaking up the company — splitting the product, the customers, the code, everything. Luna: Sunsama — I've used that app. It's a daily planner slash task manager. Pretty popular in the indie productivity space. What happened? Lucas: What's interesting is not that they broke up — co-founder splits happen all the time. What's interesting is that they did it openly, publicly, and in a way where both founders ended up with a viable business afterward. Ashwin kept the Sunsama brand and the main app. Jordan took a subset of features and launched a separate product called Sorted. Luna: So they didn't just walk away. They literally carved the company in two. Lucas: Exactly. And they published a joint blog post explaining exactly how they did it. They split the customer list based on which features each customer used more. They divided the intellectual property — the codebase — along clean lines. And they split the remaining cash in the bank account 50-50. Luna: That sounds almost too clean. I mean, emotionally, how do you go from building something together for years to saying 'okay, you take this half, I take that half'? Lucas: That's the real meat of the story. Both of them have said in interviews that the tension had been building for months. Ashwin wanted to keep Sunsama as a focused daily planning tool. Jordan wanted to push into more of a full project management space. Different visions — and neither was wrong. Luna: So the classic founder split — strategic disagreement. But most of those end with one founder buying the other out, or a lawsuit, or one person just leaving with nothing. Lucas: Right. And that's why this case is worth studying. They chose to split the company instead of letting one founder win and the other lose. And they set ground rules upfront: no fighting over valuation, no trying to screw the other person, focus on what's best for the users. Luna: But how do you even value a private startup that's doing maybe a few hundred thousand in revenue? You can't just look up a stock price. Lucas: They didn't try. They used a simple heuristic: each founder got the assets they needed to continue building their version of the product. The customer list was split based on usage data. The IP was divided based on who wrote which parts of the code. And the cash was split evenly because they agreed the money was a joint creation. Luna: I imagine there had to be some moments where it got messy. Like, what if a customer used both features equally? Whose list do they go on? Lucas: Ashwin mentioned in a podcast that they handled those edge cases by letting the customer choose. They sent an email to the ambiguous segment saying: 'We're splitting into two products. Pick the one that fits you better.' And most people chose cleanly. A few asked to stay with both, which they couldn't do, but overall the transition was smooth. Luna: That's remarkable. Because normally when a startup breaks up, the customers are the ones who suffer. Here, they actually gave customers agency. Lucas: Exactly. And I think that's the biggest lesson. Most founders treat their startup like a marriage — they'd rather stay in a dysfunctional relationship than admit it's not working. But Ashwin and Jordan normalized the idea that a co-founder breakup can be a mature, businesslike decision, not a personal failure. Luna: Let me push back a little though. Is this really replicable? I mean, Sunsama was a bootstrapped product — no VCs, no board, no complex cap table. If they had outside investors, splitting the company would have been a nightmare. Lucas: That's a fair point. They were in a privileged position — they had no investors to get approval from. But the principle still applies even in vc backed startups. There are examples like the split at Optimizely, where the founders had to negotiate with the board. It's harder, but it's not impossible. Luna: So what's the takeaway for a first-time founder listening right now? Like, how do you know when it's time to pull the trigger on a split? Lucas: Ashwin and Jordan have said they knew it was time when their weekly one-on-ones started feeling like therapy sessions instead of strategy meetings. They were spending more energy managing the relationship than building the product. That's a red flag. Another sign: when you find yourself hiding your true product instincts from your co-founder because you don't want to start another argument. Luna: So the test is: if you can't have an honest conversation about your diverging visions without it turning into a fight, the trust is already gone. Lucas: Yeah. And the thing is, most founders wait too long. They think 'we can fix this' or 'we've already invested so much time.' But the sunk cost fallacy is brutal in co-founder relationships. The longer you wait, the messier the split gets. Luna: If today's episode was useful to you and you want to keep it ad-free, buy me a coffee dot com slash fexingo helps. Lucas: Yeah, it really does. Every contribution goes straight into making these conversations possible. No middlemen, no advertisers. Luna: Alright — back to the split. I want to talk about what happened after the breakup. How did each founder's product perform? Lucas: So Ashwin's Sunsama — the original product — has actually grown faster post-split. By focusing on just the daily planning use case, they've been able to refine the experience and attract a more dedicated user base. Jordan's Sorted is newer, but it's found its niche with people who want a more structured project workflow. Luna: So in a way, both founders won. They got to build what they actually believed in, without compromise. Lucas: That's the ideal outcome. And it's rare. Most co-founder splits end with at least one person bitter and resentful. But Ashwin and Jordan have publicly said they're on good terms — they even refer customers to each other when it makes sense. Luna: I think that's the part that's hardest for most founders to imagine. How do you not feel like you failed? Lucas: They reframed it. Instead of 'our startup failed,' they said 'the partnership had run its course.' The business itself was fine. It was the collaboration that wasn't working anymore. And by splitting, they gave each other the freedom to build something that could thrive. Luna: That requires a level of emotional maturity that I think a lot of founders — especially first-time founders — don't have yet. It's hard to separate your ego from the company. Lucas: It is. And that's why I think the Sunsama case is such a good teaching tool. It shows that a co-founder breakup doesn't have to be a tragedy. It can be a strategic pivot — just a pivot in the relationship, not in the product. Luna: So if I'm a founder listening, and I'm having those 'therapy session' one-on-ones, what's the first step? Do I just sit down and say 'I think we should break up'? Lucas: Not quite that blunt. But you do need to start the conversation. Ashwin and Jordan's advice is to frame it as 'our visions are diverging. Let's explore what happens if we each go our own way.' You don't have to commit to a split in that first conversation. You just open the door. Luna: And if the other person gets defensive or angry, that's probably a sign that the split is overdue. Lucas: Exactly. A healthy co-founder should be able to have that conversation without it turning into a fight. If they can't, the trust is already gone. And then the question becomes: do you want to spend another year fighting, or do you want to spend that year building something great alone? Luna: There's also the legal side. Most founders don't have a co-founder agreement that covers what happens if they split. Sunsama had one, but it was very basic. They still had to negotiate the specifics. Lucas: Right. And if you don't have an agreement at all, the default is either the state's default partnership law — which is messy — or whatever the courts decide. That's a nightmare. So my advice: even if you think you're best friends forever, get a vesting schedule and a buy-sell agreement in writing from day one. Luna: And make sure it includes a mechanism for amicable divorce, not just a forced sale. Lucas: Yeah. Something like a 'shotgun clause' — where one founder names a price, and the other can either buy at that price or sell at that price. That keeps both sides honest. Luna: That's smart. Because if you undervalue the company, the other person can just buy you out at that low price. Lucas: Exactly. It's a self-correcting mechanism. But the Sunsama case shows that with enough goodwill, you don't even need that. You just need both people to want the best outcome for the users and for each other. Luna: I think that's the real lesson. It's not about the legal structure or the asset split. It's about whether you can look at your co-founder and genuinely want them to succeed — even if it's not with you. Lucas: That's the line. And if you can't say that honestly about your co-founder today, then you've got some hard conversations ahead of you. But they might be the most important conversations you have as a founder. Luna: Yeah. And hopefully, like Ashwin and Jordan, you come out the other side with two healthy products and a friendship intact. Lucas: Here's hoping. That's the founder's journey — not always a straight line, but always a story worth telling.