Bruce Firestone and I had a great little debate on twitter recently about partnerships in business and why they often don’t work. He remarked that “there are still two chairs in Heaven waiting for the first two partners to get there & still like each other.” I agree that entrepreneurs are, by nature, a bit headstrong and tend to swim against the current and that these traits don’t necessarily contribute to strong partnerships, but in my 20 plus years in business I have seen more than a handful of partnerships that worked very well. I have also had three different business partnerships of my own and am lucky to be part of partnership right now that is very effective.
To be sure, I know many more partnerships that didn’t work out than those that did. The ones that work have a lot to do with the lives and lifestyles of the individuals in the partnership.
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When people approach me about a prospective business and the people who may be involved, I urge them to carefully consider who they are getting into bed with. When a great idea presents itself to opportunistic people, it is easy to get caught in the emotion, overlook the details and let momentum take over.
Being Friends Isn’t Enough
A lot of ventures form after a couple of friends toss around an idea, get excited and then in the euphoria, decide to launch a business. Unfortunately getting a partnership right is much more complicated than simply being friends. I have seen many businesses falter or fail altogether because the partners either didn’t have the same passions and goals or did not share the same understanding of the commitment required to make it work.
Similar to partnerships based on friendships, those based on mutual interests can also be problematic although shared passions alone can often carry a business for a good while.
What is Required?
Get your partnership right and it could mean smooth sailing, but get it wrong and it can cost you a ton of time and money. In my experience several things have to line up for a business partnership to work:
Probably the most fundamental aspect of a good partnership is a shared set of values. This means everyone has to have the same view on things like work ethic, integrity, professionalism, humility, importance of customers, excellence and innovation. When these are not aligned you spend countless hours pulling each other in different directions and it becomes virtually impossible to make decisions that are good for the company.
A shared passion for a certain domain or mission, is absolutely critical for a business to thrive. If one or more of the partners lacks the passion, it will make it difficult for them to eat, sleep and dream about advancing the business. In a competitive world, every ounce of drive, creativity and persistence matters.
Stage in Life
Young partners often have unlimited time to pour into their businesses. This was certainly the case in my first start up and I used to work 7 days a week. As I got older I tended to need more rest to be productive and once my wife and I had kids, working those kinds of hours was out of the question (and I don’t believe it’s necessary either). I have seen partnerships where one person is prepared to work the required hours and the other can’t or won’t. When things are good non equal levels of commitment and contribution won’t be a problem, but when the business hits speed bumps, as they always do, it can be fatal for the partnership.
Partners have to work well together. The collective skill sets can compliment or overlap, and there can be differences of opinion, even heated disagreements, but there has to be mutual appreciation, respect and an ability to come to agreement to move the business forward. Chemistry can get better or worse over time – direct, honest and regular communication is critical.
Are Partnerships Necessary
Back to Bruce’s point that entrepreneurs shouldn’t even bother trying to form partnerships and instead go it alone. To me it depends on the people. I have started and run businesses on my own, but I enjoy collaborating and am better when I work with at least one other that compliments my strengths and weaknesses and vice versa.
So effective partnerships are certainly rare, but they can work if the partners are chosen properly.