By Tom Frank, CFE Executive Director
You are sitting in your dorm room, or a coffee shop, (or bored in class) and suddenly you think to yourself: “You know what would be a really good idea?”…just like that you are off to the entrepreneurial races.
But you don’t want to execute this awesome idea by yourself, so you tell someone. You might be shocked by how many times the person in closest proximity (roommate/drinking buddy/classmate) ends up being your co-founder. It’s more accident than design. Sometimes it ends up great. Sometimes it does not.
Deciding to start a company with a friend can be exciting, memorable, and bonding. After all, it’s a lot of fun to work with people you actually like (trust me on that one). And given the sheer volume of time most co-founders end up spending together (in most cases more hours than they spend with their own families) it makes sense to embark on that journey with someone you trust. Doesn’t it?
The short answer is “it depends.”
Most of the conflicts that startup founders bring to me involve issues with friends who are part of their company. Why? I think it’s because it is hard to have hard conversations with people you like or love.
Recently a student sought my advice regarding how to manage her head of sales. This individual was not meeting his work obligations and he did not seem highly motivated to do so. When I probed the situation a bit more, I discovered that the founder was in a romantic relationship with her head of sales. The guy was apparently a great boyfriend, but a lousy salesman. Our entrepreneur didn’t want to compromise the personal relationship by criticizing the professional one. It’s a dilemma that happens more often than you would think.
A second example of “it depends” involves friends who agree to start a company together, but don’t take the time (and highly recommended step) to clarify up front who does what, how much time they devote to doing it and eventually…who owns what. Why does this matter? Because your definition of words like “owner” “partner” or “full-time” might differ wildly from the definitions of your best friend from childhood.
Try and take a breath before you jump over the broom with a friend or relative in a startup venture. Maybe ask yourself the following questions:
- Am I choosing to work with this person because they possess talents or skills that will add unique value to my venture in ways I cannot?
- Have I witnessed firsthand how this individual deals with stressful situations?
- If I didn’t already know this person, would I choose him or her over others? Why?
- Does this person share my passion for THIS venture? How so?
- No one is perfect. What might some of the shortcomings of this person be in a work situation? Is he or she open when discussing personal strengths and shortfalls?
And if everything is still on track, explore a little deeper:
- Do we share a vision and are our values aligned? (This is a fancy way of saying do we care about achieving the same thing and do we agree about what is important).
- Are our work-styles similar or very different? How could these styles have a positive or negative impact on the overall work flow for the company? Please note that sometimes the differences in these areas can be a compelling differentiator for a team.
- How will we allocate the decisions and what will our decision making process be? Do you both want to build an organization that has a hierarchy or one that is flat? Why and what do those terms mean to each of you?
- Will we have rules for our work relationship that are different from our personal relationship?
- What concerns or apprehensions does this potential employee or co-founder have about me? How well can they articulate or communicate their concerns?
- How will we resolve conflicts (because even the best co-founders have them)?
- When things get tough, which relationship are we putting first and do we both agree on that priority?
And finally…if you still feel that a blended relationship is right for your startup, seek the opinion of someone who knows both of you. Sometimes people on the outside of a relationship see things positive and negative you might miss.
Several honest, probing conversations before a line of code is written, or a wireframe is scribbled on a page, or a prototype for the world’s most awesome water balloon catapult is demonstrated on the diag will go a long way towards protecting you and your venture, and the people you care about most.
Now go forth and innovate as one.