In personal relationships, there’s a well-known saying: breaking up is tough. This is why many individuals opt to date and become engaged prior to tying the knot. The idea is that by investing quality time together initially, we can select the right partner for life and look forward to a rewarding “happily ever after.”
Yet, a question arises: why do numerous entrepreneurs overlook this essential aspect when selecting a co-founder for a startup?
It’s clear that embarking on a new business venture with another individual is both thrilling and emotionally charged.
Picture this: you’ve discovered a person who resonates with your vision and enthusiasm for a groundbreaking product or service. You brainstorm into the early hours, exchanging bold and visionary concepts that you believe will tackle a significant issue, perhaps even making a meaningful impact. Hours are spent perfecting your business plan and presentation, all in pursuit of a shared ambition to kickstart this new endeavor.
However, as the two of you navigate this initial euphoric phase, how much time have you dedicated to truly understanding each other as individuals?
Of course, you communicate daily through calls, texts, video chats, and possibly face-to-face meetings well into the night. How could you not have a grasp of each other? Yet, that assumption may be misleading.
Frequently, entrepreneurs hastily dive into a new partnership, concentrating on all aspects except nurturing a relationship with their co-founder. This inclination is somewhat understandable. Swift entry into the market is crucial for launching new technology or businesses, and discussing abstract topics like, “Where do I envision myself in a decade?” may feel like a diversion.
However, many entrepreneurs have discovered the hard way that neglecting to understand their co-founder can lead to considerable time, stress, and financial consequences down the line.
So, how can you keep the momentum going as you launch your new venture while also dedicating essential time to familiarizing yourself with the individual who might become your business partner? My co-founder and I have effectively established and expanded our law firm by following straightforward principles, and our experiences with clients have underscored their significance for collective success.
R-E-S-P-E-C-T
Pay attention to how your partner interacts with you and those around you. Do they communicate with you and others in a professional and respectful manner? How do they treat subordinates and service providers? Are they fair, clear, and patient? When challenges arise, do they assign blame to others? It’s simple for everyone to exhibit exemplary behavior when conditions are favorable, but how do they respond under pressure?
Without a doubt, if they lack respect and professionalism from the outset, it is likely to deteriorate over time, particularly if the business flourishes and financial stakes intensify. Perhaps you are comfortable with this dynamic and see it as a complement to your temperament. Nonetheless, it’s crucial to consciously determine what kind of individual you wish to collaborate with from the very beginning.
Additionally, you need to decide early on what kind of company culture you aspire to foster and whether you and your partner have a shared understanding of that culture.
This consideration goes beyond mere feelings. While you might be willing to accept your co-founder’s “quirks,” other vital contributors may not, which could affect the business’s overall success.
Communication and Compromise
Are you aligned when it comes to communication? Does one partner prefer to discuss issues immediately while the other requires time alone to process before addressing a conflict? Can you both engage in discussions about your disagreements without the conversations escalating into tension or conflict? How effectively can you reach compromises?
If you and your co-founder are misaligned in how you communicate, you may face challenges ahead. While agreement on every point isn’t necessary, it’s vital to establish an effective method for exchanging ideas without unnecessary conflict and strain. Remember, if the two leaders are at odds, it will undermine the entire team.
Shared Vision of Success
What does success mean to you, and do you have a shared perspective on it? For some, success may be a manageable small enterprise providing stable salaries, while for others, it might be an IPO on the New York Stock Exchange.
Although it is impossible to foresee success at the start, discussing how you envision potential outcomes is wise to ensure alignment.
Even if your definitions of success differ, this doesn’t have to jeopardize your partnership; it simply indicates that in the future, your paths might diverge. You can choose to make this a surprise later or have an open dialogue about it now.
Risk Tolerance
In your role as a business operator, you will encounter numerous decisions influenced by your tolerance for risk.
Your differing risk preferences may even complement each other, as the risk-taker drives the team forward while the more cautious partner ensures the safety of the venture. This balance can be a tremendous advantage, provided that you align in other critical areas, especially communication and compromise.
Integrity and Honesty
A partnership grounded in honesty and integrity can achieve great heights, even if the partners are otherwise very different.
Conversely, a partner lacking integrity or honesty is akin to having a leak in your vessel—you’re bound to fail if you set out with such a collaborator, regardless of how well you get along in other aspects. Trust is the bedrock of any partnership; without it, potential failure looms.
One last point: despite the pressure of time and limited resources at the start, it is essential to work with an experienced attorney to draft a partnership agreement or similar documents at the beginning of your collaboration. Many entrepreneurs cite various reasons for delaying this (costs are often a primary concern), vowing to address it later if they become successful.
Unfortunately, lacking clear agreements upfront leaves you without mechanisms to settle disputes later, leading to conflicts that are far more costly than if you had invested time and resources in a formal agreement initially.
Take a few moments today to assess your potential partner. Also, take an honest look at yourself in the process. Are you two compatible?
