By Dorene Lehavi, PhD
Of course, you are in a hurry to get your dream business up and running. You want a partner or co-founder, and to get to market ASAP for a list of very good reasons. Why wouldn’t you? However, rushing into what is equivalent to getting married can lead you to the nightmare of losing it all. There are huge mistakes that partner or co-founder seekers make by rushing into something that, in the end, could lead to disaster. So please slow down and consider this. We actually see this a lot at 1000 Angels, the private investor network that connects investors with startups.
The technology, product and operations side of your business is only 20% of what you need to have. Business schools tell you that the 80% is what they don’t teach…80% is about people. Business is all about relationships with people. Investors, customers, employees, vendors, competitors, community, your families and others. Where there are co-founders and partners who own and run the business, the relationship they have with each other is the key to its success.
The first huge mistake setting you up to be one of the 70% of failed business partnerships is, as you might have guessed, choosing the wrong partner.
Let’s say you found someone with whom you clicked. You spent “a lot” of time talking and discover that you have similar aspirations for a business. Your excitement increased as you discovered how your dreams coincide and as a bonus you have complementary skills. Your adrenaline is soaring, and you are sure that you have found your match. You are both (all) in a hurry, so you ignore the red flags. Your gut reaction is telling you to slow down or even walk away. But you choose not to pay attention to that forewarning. Instead, you prefer to move ahead because your desire to have the partnership and the business overpowers your ability to listen to your intuition.
If long term success is the goal, having the right partner in business is as crucial as having the right partner in marriage. We all are aware of the high divorce rate in marriage. It is even higher in business partnerships. In both cases, divorce can be avoided if we would take more care in choosing the right partner. In some cases, it is not even true that the wrong partner was chosen, but rather that the partners don't maintain a healthy relationship.
Be willing to slow down and take the time to get to know each other well by having essential conversations covering key issues. Be transparent and use good communication skills to find out if you are compatible on core values, trustworthiness, personality, likability, work style, risk tolerance, long term vision and other crucial areas. This should lead you to know if you have the basis to build the foundation for a successful business. However, finding all of this out takes time. It’s the equivalent of dating before deciding to get married.
Instead of approaching the conversations from the point of view of “what will I get from this person?” start from the point of view of “what can I give to this person?”. You should start talking first. You can even mention having read this article. Transparency means answering honestly to questions like why you want a partner and why someone would want you as a partner. Since we all have our quirks and shortcomings, by sharing yours, you will be giving your potential partner permission to be open about theirs.
Here are some guidelines to talk about:
What is the true reason you want a partner?
What are your strengths and weaknesses?
What do you think a partner would find most annoying about you?
What in your personal life could interfere with your being present for the business? Are your spouse or parents supportive?
Do you have a history with other partnerships? What happened?
Is this your only business? What other interests do you have that could take your time and money?
What is your financial situation? Do you have obligations such as spousal or child support? Are you caring for aged parents?
What contributions will you be making?
The point is that between partners, everything has to be out in the open. Obviously your first few conversations will not likely cover these personal topics. It takes time to feel safe with someone new to be this forthcoming. However, your potential partner or co-founder will be more likely to be open if you take the lead.
Surprisingly it’s not required that you have the same work style, for example, or even the same long term vision. The important point is to know it upfront and not be surprised and unprepared when one partner finds out that the other has an annoying work style…or in a year wants to sell because his long term commitment didn’t match yours. What you must have is the willingness to talk about it early and work out these differences finding compromises and solutions that bridge the gaps.
Not everything can be worked out, but it’s better to know beforehand when you still can shake hands and walk away without having to face the pain of a downward spiral everyday until you ultimately break up to end the misery.
As you slow down in order to get to know each other and make progress in discovering that you share the important elements - mainly core values and commitment - your respect and trust for each other should be growing. If that isn’t happening, definitely acknowledge this red flag and walk away now.
Dr. Dorene Lehavi has been coaching business partnerships for almost 20 years. To learn more visit www.DoreneLehavi.com