How to start a business with your friend—without ripping each others’ throats out

How to start a business with your friend—without ripping each others’ throats out

“It​ ​is​ ​a​ ​bad​ ​idea​ ​to​ ​start​ ​a​ ​business​ ​with​ ​your​ ​best​ ​friend.​ ​It​ ​is​ ​also​ ​a​ ​terrible​ ​idea​ ​to​ ​start​ ​a business​ ​with​ ​your​ ​wife​ ​or​ ​your​ ​girlfriend.​ ​You​ ​will​ ​end​ ​up​ ​friendless,​ ​divorced,​ ​or available​ ​depending​ ​on​ ​the​ ​scenario.”​ ​— ​Gordon​ ​Miller, managing partner of G3i Ventures.

Everyone has heard this advice. Everyone. DO NOT mix business with pleasure. Because the pleasure always loses out. And most of the time, the business, does as well.

“I​ ​demanded​ ​him​ ​to​ ​focus​ ​on​ ​the​ ​business.​ ​I​ ​lost​ ​it​ ​and​ ​started​ ​yelling​ ​at​ ​him.​ ​He​ ​left​ ​that night​ ​and​ ​stopped​ ​returning​ ​my​ ​calls.​ ​The​ ​team​ ​started​ ​to​ ​fall​ ​apart​ ​and​ ​now​ ​I​ ​had​ ​no support.​ ​We’re​ ​still​ ​connected​ ​on​ ​Facebook,​ ​and​ ​maybe​ ​we’ve​ ​chatted​ ​once​ ​or​ ​twice​ ​via DM.​ ​But​ ​my​ ​[once​ ​childhood]​ ​friend​ ​and​ ​I​ ​haven’t​ ​spoken​ ​in​ ​10​ ​years.”—M​ack​ ​Burnett​ ​III

There can be a myriad of reasons (or just one) for these splinters in business relationships. And many of them can be avoided before commitments and promises are made. And that’s what we’re going to talk about in this article.

As Strikingly co-founder David said, “Whether your co-founder is a friend, your cousin, or you’re in a romantic relationship, know that things will never be the same again, once you go into business with them.”

Start small

Dafeng, the second co-founder of Strikingly, suggests you start small. As in a weekend project small:

“Work​ ​on​ ​a​ ​small​ ​project​ ​together​ ​to​ ​figure​ ​out​ ​your​ ​working​ ​style​ ​and​ ​see​ ​how​ ​[this other​ ​person]​ ​works​ ​under​ ​pressure.​ ​There​ ​are​ ​good​ ​opportunities,​ ​like​ ​a​ ​hackathon project​ ​or​ ​a​ ​1-week​ ​side​ ​project​ ​idea.​ ​If​ ​the​ ​hackathon​ ​project​ ​falls​ ​apart​ ​and​ ​you’re​ ​not doing​ ​business​ ​together,​ ​it’s​ ​better​ ​to​ ​walk​ ​away,​ ​rather​ ​than​ ​you​ ​working​ ​on​ ​it​ ​for​ ​6 months​ ​and​ ​realizing​ ​your​ ​visions​ ​are​ ​diverging.”

By doing this, you get real-life insights on whether this individual will be a good partner for you, moving forward.

Some of the signs that you and this individual may not be good partners?

  • Lack of communication – perhaps because you’re a morning person and they’re a night person

  • They crumble under pressure (e.g., don’t know how to prioritize for a deadline)

  • They lack accountability and don’t follow through on a project

  • They’re not committed (i.e., they don’t take it as seriously as you do)

This is what Syed Balkhi and his co-founder, Thomas, did before starting OptinMonster:

“​We​ ​decided​ ​to​ ​work​ ​on​ ​a​ ​smaller​ ​passion​ ​project.​ ​This​ ​allowed​ ​us​ ​to​ ​really​ ​get​ ​to​ ​know each​ ​other​ ​before​ ​diving​ ​into​ ​a​ ​much​ ​larger​ ​partnership.​ ​While​ ​working​ ​together​ ​on​ ​the passion​ ​project,​ ​we​ ​realized​ ​that​ ​we​ ​really​ ​complemented​ ​each​ ​other’s​ ​skill​ ​set.​ ​We shared​ ​the​ ​same​ ​core​ ​values​ ​when​ ​it​ ​comes​ ​to​ ​hard​ ​work,​ ​honesty,​ ​and​ ​care,​ ​for​ ​the customer.”

But MJ Demarco of The Fastlane Forum, had a different experience:

“Back​ ​in​ ​my​ ​twenties,​ ​two​ ​of​ ​my​ ​friends​ ​and​ ​I​ ​started​ ​a​ ​business.​ ​I​ ​was​ ​100%​ ​committed to​ ​the​ ​business.​ ​ ​My​ ​other​ ​founders​ ​had​ ​other​ ​priorities,​ ​with​ ​our​ ​business​ ​being​ ​their​ ​4th or​ ​5th​ ​interest.​ ​One​ ​founder​ ​had​ ​other​ ​businesses​ ​he​ ​focused​ ​on.​ ​Another​ ​founder wanted​ ​to​ ​get​ ​promoted​ ​at​ ​his​ ​job​ ​and​ ​play​ ​sports.​ ​That​ ​left​ ​me​ ​as​ ​the​ ​only​ ​person​ ​who was​ ​busting​ ​ass​ ​and​ ​sacrificing.​ ​My​ ​partners​ ​were​ ​good​ ​people​ ​and​ ​motivated​ ​—​ ​it’s​ ​just that​ ​their​ ​interests​ ​were​ ​polyamorous,​ ​and​ ​[that]​ ​is​ ​no​ ​foundation​ ​for​ ​a​ ​good​ ​partnership. When​ ​it​ ​was​ ​clear,​ ​I​ ​didn’t​ ​fight​ ​with​ ​them​ ​about​ ​it,​ ​we​ ​just​ ​agreed​ ​to​ ​dissolve​ ​the partnership.”

It’s best to find this out earlier rather than later, during a short term project, and not when relationships and real revenue are on the line.

Let’s be clear

You and your co-founder(s) can easily step on each others’ toes by NOT CLEARLY defining what each of you will be responsible for within the company.

As Wade Foster of Zapier remembers when him and his co-founders first started, “we experimented with several different partnership models. One path seemed super intuitive but after about 6 months of effort it was clear the devil was in the details. Everything we thought was intuitive wasn’t.”

These are the foundational building blocks your partnership will need to cement in stone, from the beginning.

The​ ​same​ page

You have one goal, but your co-founder has another. Get on the same page. One mind, one drive.

As Teng, the third founder of Strikingly states, “All of you need to believe in the same mission for the greater goal that you have for the company or product. The goal needs to be made as clear a possible in the very beginning to prevent any conflicts.” Money’s​ ​on​ ​Your​ ​Mind After the founders of Strikingly solidified that they were moving forward following their YCombinator success – via the advice of YCombinator mentors – they signed a standard contract of an equity split between all 3 partners. That was it. Now it’s a passing thought in the grand scheme of all the other pressing priorities they have.

The​ ​ground​ ​rules

Techstars has helped launch over 1,000 companies. This is what the founder and co-CEO, David Brown, advises all his co-founders to do:

  • Talk at the very beginning about how you’d approach conflict when it comes up. Are you both open to hearing criticism?

  • Have a conversation on what you’d do if you disagree (and there is no 3rd member of the founding team). Whose point of view prevails?

  • Make sure you carve out time to solicit constructive feedback and don’t take it personally (e.g., is there anything I’m doing that’s driving you crazy?)

Know​ ​your​ ​Role

“Everyone should explicitly know their role in the company,” says Teng. “If there is an overlap in the skill sets between founders – let’s say both of you code – one does front end, and the other does back end.”

Be honest about your strengths and where you can contribute the most.

The confrontation

Let’s assume these two things are already solidified in your relationship.

  • There’s an underlying trust and respect between you and your partner(s). No argument can be settled if this isn’t in place.

  • You’re all self aware. As Dafeng says, “Some people don’t even realize they’re being emotional (I’m not being emotional, I’m passionate!). Be aware of the situation so you know if you need to walk away or back off, and regroup at a later time.”

The​ ​one​ ​principle​ ​that​ ​rules​ ​them​ ​all

“You can’t take it back.”

“Once you hurt someone with your words you can’t undo that pain. Before I say anything,” says Dafeng, “I will think twice. And that’s my truth.”

This principle is how the co-founders of Strikingly approach heated discussions with each other. Here are a few of their takeaways, on how they’ve approached finding the appropriate solution to a dilemma:

  • There’s no need to tiptoe around confronting your co-founders. If there is, that​ ​would hurt the relationship. Be transparent with any concerns you have with each other.

  • In the beginning, you may find yourselves having heated fights, and of course you take it personally. It’s natural. But you get over it. And the process of getting over it is realizing that the company’s progress matters more than your personal squabbles. You know where the business needs to be, what you need to do, so accept that it’s not meant to be personal.

  • The worst thing you can be is passive aggressive because it can drag out for weeks, if not months – and have long-term effects. Talk about a business killer that hurts productivity for you and the business.

  • Do your best to keep your emotions out of it and use data to prove your point. This is how to convince each other. It’s not personal opinion, but statistics and facts.

  • If you can transform your frustration into something productive, be it – into product ideas or an alternative suggestion – do it. Focus on the task at hand and make the end goal clear.

  • If there’s a disagreement between co-founder(s) about how to move forward on a particular project, 9 times out of 10, the final decision should defer to the person with the most expertise in that area – which you should have already agreed on.

If you find yourself losing control, walk away to get your mind straight before walking back into it again. It’s good for you to know your limits.

When we asked Ross Simmonds how he let go of residual feelings after an argument with a colleague or a co-founder, he says that he “stayed focused on [what would be] best for the business, and removed all feelings from the situation.”

“To let go,” Simmonds explained, “I go into the scenario with that perspective and it makes it easy to stay focused on progress rather than feelings.”

The perks

“As​ ​a​ ​single​ ​founder,​ ​I​ ​felt​ ​like​ ​I​ ​was​ ​carrying​ ​a​ ​weight​ ​that​ ​I​ ​couldn’t​ ​share​ ​with​ ​anyone.” -Alex​ ​Turnbull​ ​of​ ​GrooveHQ

From all the caveats that people mention in regards to going into business with your friend, we’re still going to name a few of the perks of going through this journey with another:

  • Big decisions can be analyzed and looked at from different perspectives – whether you’re the pessimist or optimist, realist or dreamer – looking at it from all perspectives will help you come to the best solution to move your business forward.

  • Everyone has their role, and their team of specialists, to accomplish particular tasks. With co-founders, depending on the scope of the problem, when fires occur it goes to the best person, and team, to handle it..

  • And the most important perk? You’re never alone. You have someone to pull aside and talk to when it starts to get heavy. You have someone to talk about your frustrations and your worries. And they can empathize because they’re going through the same thing.

It all comes down to this

Now you have an idea of what you’re getting into.

Let’s end this piece with a statement from Michael Pozdnev. In a 16-year business partnership he had with a friend, it had led to: depression, overwhelming self doubt, and panic attacks. After finally splitting from this partnership, it led him to building iwannabeablogger.com that today receives over 100 comments per blog post and well over 1K blog post shares.

Michael’s advice: “Surround​ ​yourself​ ​with​ ​people​ ​who​ ​believe​ ​in​ ​you.​ ​As​ ​soon​ ​as​ ​you​ ​feel​ ​you’re​ ​being accused​ ​of​ ​something​ ​you​ ​didn’t​ ​deserve,​ ​it​ ​is​ ​the​ ​first​ ​sign​ ​that​ ​you​ ​have​ ​to​ ​break​ ​up with​ ​that​ ​person.​ ​You​ ​and​ ​your​ ​cofounder​ ​should​ ​be​ ​bound​ ​by​ ​common​ ​values​ ​and goals.​ ​Evaluate​ ​honesty,​ ​not​ ​only​ ​in​ ​your​ ​work​ ​and​ ​contributions​ ​to​ ​your​ ​joint​ ​business, but​ ​also​ ​the​ ​efforts​ ​of​ ​your​ ​partner. But​ ​most​ ​importantly,​ ​be​ ​happy​ ​and​ ​healthy”.

Cheers to the co-founders of today, and of the future. We hope to never find your “co-founder horror story” in a Reddit group forum.

person with rainbow filter


Credit: Gigi Rodgers

Gigi Rodgers is a Digital Marketing Manager for Strikingly. She writes about entrepreneurship and about every aspect of building an effective landing page. When she’s not contributing on Inbound.org, she’s reliving one of the greatest decisions she’s ever made: Ordering the Bacon Flight. Connect with her to find out more about landing pages (and bacon flights) on Twitter.