I’ve built five
companies in my startup career, four of which I started with close friends.
It’s quite common to build a company with a close friend: you get together,
think of a cool idea, and decide to start a business.
Why not, right?
While it can be extremely fun to startup with someone you’re close to, it’s not
without disadvantages. So, before you and your friend get started, take the
time to analyze the good, the bad, and the ugly side of starting a company with
a friend.
The Good
When you start a
business with a friend you have a friend in the trenches. Entrepreneurship can
be lonely. My friends who work 9-5 during the day tend to party hard at night.
I can’t keep up with that lifestyle as a 24/7 entrepreneur.
When we do hang out,
I just want to talk about ways to improve my startup whereas they want to talk
about anything but work. That’s why it’s so fun to startup with a
friend. You have someone you can confide in and relate to, at times when not
everyone understands.
Your friendship also
sets the tone for the company culture. Good company culture keeps morale high,
attracts top talent, and keeps employees loyal. My co-founder and I often
conduct interviews together so that the prospect sees our dynamic interactions
and feels how fun it is to work on our team. Because we are friends, we don’t
hesitate to throw a get-together at my place or a poker night at my
co-founder’s place.
When you co-found a
business with a friend you will understand each other’s strengths and
weaknesses. For example, it was easy for my friend and I to assign roles and
responsibilities, because we knew each other so well. He was emotionally
stable, organized, and focused on the big picture, so it made sense for him to
be CEO. I was the hustler with the do-whatever-it-takes attitude, so it made
sense for me to lead as the CMO.
The Bad
While starting a
business with a friend has its perks, it also has innate pitfalls. For example,
you have similar networks. Friends usually hang out with the same people and
will thus have the same network. This is bad because startups can succeed or
fail based on who you know and the introductions you receive. To overcome this,
my co-founder and I make a strong effort to go to events (e.g., he goes to
investor-related events while I go to client-related events) in order to expand
our networks.
It’s also difficult
to take orders from a friend. People are accustomed to taking orders from their
boss — not their friends. This can become very unpleasant, especially if you’re
not communicating tasks in the way that your co-founder likes to receive them.
To keep my co-founder and I accountable, every week we get together with the
whole team and report our accomplishments and issues. This eliminates the need
to give orders throughout the week.
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