Mistakes Made by Entrepreneurs…

Choosing the Right Partners…

OK, so you’re all fired up! You’ve just been hit in the head by a sledgehammer of an idea for a new business and you just can’t stop thinking and talking about it. Friends, family, the dog…everyone has to be subjected to your new, world-shaking idea – you just can’t hold it in. Your passion just overflows…

The idea stays – buzzing around in your head when your not dragged from it by more mundane things like earning a living, studying or whatever else you did before the idea came along and lets face it – everything is more mundane than your idea! Anything that takes time away from thinking about it becomes an aggravation, an annoyance. You wake up in the morning and there it is – poking up at you (Yes – still talking about that idea!).

Anyway – you get the picture. The eureka moment that’s the beginning of a new company is like falling in love and its needs to be – because tough times are ahead and you’ll need that passion and commitment to see it through.

What happens next? If you’re lucky, you’ll start thinking about how to make your idea real. If this is your first start-up you’ll probably be nervous…wow, this is a big step – what if it fails? How will I pay the bills? I have some skills but not all that this is going to need…and then it hits you – you’ll need other people. Hey, if I can convince someone else to do it with me then I’ll be sharing the risk and they’ll be two of us so it’s more likely to succeed right?

The short answer is ‘maybe’.

Choosing the right partner is critical. They need to:

  • Bring something to the table
  • Be completely comfortable with the risk of being in a start-up
  • Want to see this idea become real just a badly as you do but perhaps most important…

They have to work well with you no matter what the situation or pressure. Being in a start-up can be a more intense relationship than marriage! Yes…honestly!If you can’t answer a strong positive to all of the above then this may not be the right partner and don’t think it doesn’t matter – it does.Being in a start-up, especially during the early days is daily challenges and pressure – its true that its probably the most enjoyable ‘career’ you can have (at least I think so!) but if you choose the wrong partner then it soon becomes a nightmare for everyone. Don’t make the mistake of choosing to pursue a start-up with someone because somehow it’s more reassuring to have someone in there trying to make it happen with you. That’s just not a good enough reason.

As founder’s you will have to deal with all kinds of pressures, not least of which is:

  • Who is the ‘face’ of the company?
  • Who makes the key decisions after all the discussions and debates have come to an end?

…basically, where does the buck stop?

Two people trying to be joint CEO is often a recipe for not making decisions and for getting stuck in the quagmire of all talk and no action. Entrepreneurialism IS action because the clock is ticking – every day is more money spent until revenue, is another day closer to when your competitors notice you or the market you’re pursuing…there’s only so much gas in the tank so speed is everything.

That’s not to say two CEOs can’t work but what usually happens is they divide the territory – each owning a set of responsibilities and deliverables – clear areas where one person calls the shots after the debates have ended.One last thing – even founders should have shares in the company which they have to EARN over time based on their initial and ongoing contribution. Coming up with an idea or being the second or third person to walk through the door is not a good enough reason to instantly own a big chunk of the company. If the first few in instantly own a big chunk then they can effectively disappear or not contribute and still get just as much equity as the other founders. Not fair! Everyone has to earn it every day – that way everyone contributes and keeps contributing all the way through until the business becomes more than just an idea…until it lives and breaths…and with enough passion and perseverance – it will, just like http://www.AdvisorGarage.com

Comments welcome!Andrewhttp://www.advisorgarage.com

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  1. John McNulty

    Andrew, I second your observation that choosing partners is one of the most critical parts creating a successful startup. I would go even further and emphasize the importance of choosing *complementary* co-founders.

    In the early going your mind might be crowded with thoughts like “am i crazy? if this is such a great idea why hasn’t it been done before?” Finding people who share your vision and share your enthusiasm can be gratifying and energizing. But sharing your vision and enthusiams is table stakes — everyone involved in the company should have that, from founders to advisors to investors to employees. The question is “What do your partners or co-founders bring above and beyond that?”

    One of the most critical contributions your co-founders should make is to bring complementary strengths to the team. This goes well beyond tech founders finding business-minded co-founders.

    Finding partners with complementary strengths obviously strengthens the team overall but more subtly it creates a team that functions more smoothly as Andrew has pointed out. People are more likely to know their roles and “stay in lane”, not try to micromanage one another etc.

    Bottom line if you are looking for reassurance try your mom. If you are looking for validation of your ideas again try your mom. If you really want the idea to grow, mature, toughen and survive put together a complementary team of co-founders and advisors and make it clear who makes decisions in what areas.–>

  2. Patrick Aievoli

    You’re right it is the complementary quality of the partners. I had to dissolve my first corp due to the lack of complement of the partners. Also because of the lack of enthusiam and stability of individulas it can cuase major conflicts. A partnership is also like a marriage and compatability is also a major issue.

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