Starting a business with your friends is incredibly rewarding, but it comes with its own unique challenges.
Everyone has heard this advice. DO NOT mix business with pleasure. Because the pleasure always loses out.
Here are five lessons that should help you avoid some of the more obvious pitfalls:
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.
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.
Businesses are not democracies.
We’re taught as kids to share and make compromises with our friends, and we’re also taught that democracy is the fairest form of government. News flash: a business isn’t a kindergarten classroom or a country, and fairness isn’t a priority for early-stage founders. When getting things off the ground, there isn’t time to run everything through a committee, and, frankly, some things just aren’t up for discussion. It’s safe and easy to put every little thing to a vote, but ultimately that’s a waste of time.
It pays to include everyone.
When starting a business with friends, your social life becomes a catalyst for innovation. A significant chunk of your idea sessions will end up taking place outside of the office, whether on the weekends, out at dinner, or at a local watering hole. This is a real asset to you and your team, but you need to be careful not to exclude newer team members who aren’t part of your longstanding circle — that’s just shooting yourself in the foot.
Know your Role
Define your roles, and do it early. When dealing with friends, taking a more collaborative approach toward everything feels natural. That may work to a point, but it’s better when everyone on the team can “own” a different portion of the business. Doing this right means understanding the strengths and weaknesses of the entire team, yourself included, and using that knowledge to clearly define everyone’s individual responsibilities. Once you’ve done that, don’t be shy about enforcing it. It’s OK to tell someone to back off of your work and to focus on their own.
Have the tough conversations early.
There can only be one CEO, one head of product, one head of sales, and so on. Once again, knowing your team’s strengths and weaknesses is key. What’s more, you can’t be afraid to have frank discussions about potentially touchy subjects like equity, salary, title, and job descriptions. The longer you put these off, the more challenging and uncomfortable they become.