“If your business partners are not working as hard as you, it is not a partnership – it is a sinking ship.”
In last weeks’ blog, we have covered the topic of how to build a perfect team. Today, let’s check how to prevent startup partnership from failing.
It is a common thing to discuss a topic why most of the startups fail, but hardly anyone is touching the subject of how to make startup partnership work.
Partnerships, in general, are a breeding ground for conflict. A lot of people want to be the one, to be in charge of the game. But that is just one reason why partnerships fail. Even if you start a partnership with the best intentions, there still might be quite a handful of reasons, why your startup partnership might fail.
Today we would like to share our thoughts on how to make sure that your startup partnership will work.
Let’s dive in.
1.Develop a clear management plan
Starting your own business is extremely exciting. As a result, most of the beginners get so distracted by that feeling, that they end up drifting away from a plan. Or they don’t even have one. A lot of startups lack clear roles, responsibilities and authority.
Make sure to discuss the end game for the partnership. Do you want to be acquired, to grow into a next unicorn or to be a lifestyle startup?
Answers to that question will help determine the strategic direction for the partnership and the action steps to achieve the goals.
There are tons of people who think that the product or service is going to sell itself. Hard no. You need a structure – you must plan your journey.
Let’s take a look at why people may ignore planning out roles, and how the lack of a plan may affect your startup partnership, and even worse – the whole business. We have pinpointed 3 reasons why:
Lack of experience
Lack of management experience might stop you from the ability to see the bigger picture. Most of the young business owners have so much on their plate, that they deal with issues and tasks on the day when they occur. There is no plan because there is simply no time for it. They are already too deep into the mess, to reach the surface and try to find out what must be done. The motivation dies out because no one is really sure where to start, where they are at and what should be the next step. Naturally, that brings tons of stress and conflicts to your startup partnership.
Lack of money or your startup idea is just not good enough
When a startup and a startupper are very green, everything is still super new and just too hard to grasp. People start panicking and assuming that they will grab the duties that they are good at and the rest will magically sort itself out.
Or in some cases, people try to do everything at the same time, no matter if they have skills or talent required. And worst of all without any structured-out plan.
As we said, it might happen due to a lack of money (in order to hire people) or a clear idea of what has to be done (in order to convince people to work for free for the time being).
Lack of money is a hell of a conflict starter as is. You can check out ways how to attract money to your startup here.
Let’s get back to the point. If the startup lacks the selling point, meaning if you are not sure yourself, how to convince others that they should buy your product, then, well, think of another one. That was quite harsh, sorry. Try to pitch your startup idea to people of all ages and backgrounds, and you might find away how to improve it.
You chose a wrong partner
In some even less fortunate cases, the whole business might end up resting on the shoulders of a single person. This might happen if your chosen partner joins you, just because he wants to be a co-founder. It is cool nowadays.
Jokes aside, this might occur if, you don’t have clearly distributed duties and tasks. But in some cases, business partner has different values or ideas, but we will chat about that later.
You assume that others can read your mind
Chaotic management and distribution of roles could lead to a playground-like business environment.
Let’s say, you and your partner had a successful kickstart. You have a swaggy office with Playstations, table-tennis and all that jazz.
So you have created the ultimate startup atmosphere and hired a bunch of talented people. Because they are cool entrepreneurs, they are given full autonomy. Now it is time to lay back and enjoy the ride, they should know what to do.
That kind of attitude is going to turn your workplace into a playground.
We are not saying that having tons of games and a lounge at work, has only negative aspects to it. If the tasks won’t be pinpointed clearly and that combined with full autonomy might turn your business into procrastination hub.
We can all imagine that neglect, bad judgment, and a whole stream of other issues can bring an otherwise successful partnership and business to a complete failure.
2.Leave your feelings at the door
A lot of startups begin from friendships. The Eureka moment hits when a few great minds are exchanging ideas in a safe environment. A place where no one is too scared to say something silly or being judged. That sounds very sweet and promising. But we have all heard people saying that money and business destroy friendships.
Once you leave that safe stage and move to the real business, you should learn how to remove feelings from work. It is not your parent’s basement anymore where the idea was born. Now you need to make actual decisions to make your startup work. You have to take it seriously.
There is no place for personal drama or fooling around.
The other issue that might occur is having too much trust that comes just from sentimental feelings. No matter if you think that you know your business partner well, you must make sure that you are and will be on the same page. We are not saying that you shouldn’t trust your partner and spy on him or her. No. Just do due diligence.
It is hard to predict how one might behave under the influence of money and success, but lets at least look through the essential step you must take before diving into the business headfirst.
3. Find the right partner
We have mentioned earlier that not having the right partner might lead to you carrying all the weight of the business. Other issues might occur too. We can let our mind free for a moment and list it out: you might get scammed, destroy your reputation, you might lose clients, or they might get stolen from you.
If you have chosen a wrong partner, there is no way to make your startup partnership work. You need to start looking for a new partnership and this time make it right.
Make sure you share the same values
Be clear about your values and only bring on partners who concur.
If you haven’t determined the core values of your business, you should check out this article.
Chris Guerriero made a really great point about making sure that you and your business partner would be sharing the same values. His business partner was a good friend of his. And out of respect and just blind trust, he decided to dive into the business with him without questioning a thing. They had an agreement that they would re-invest the money back into the company. If Chris would have known that his business partners main values were family and maintaining a good self-image, he would have saved a lot of money and time. We are not saying that family is shouldn’t be the top value. Because of the family was a number one value, his business partner didn’t keep his promise and instead of re-investing money back, he chose to treat his family with fancy new things. And in order to maintain his self-image, he bought a brand new ride. So talk to your business partner, find out what are their priorities in life. Make sure that you are on the same page. Having the same values should help you to establish trust and make sure your startup partnership will last.
Avoid personality clashes
If you have constant arguments with your friend, soon to be a startup partner, it is not a good sign. Your personalities shouldn’t be the same. It is quite a rare thing. But if your friend annoys the heck out of you because of some personality trait, just stay friends. If you will start a startup together, that feeling is going to multiply.
In another case, if you are looking for startup partner elsewhere, make sure to tailor questions in the way that you would find out as much as you can about his or her personality. Just be cautious, it is better to make sure that the ride will be smooth.
The business partnership must be fair. It doesn’t matter what part of the business belongs to the partner. If they have 30 per cent, it doesn’t mean that they should only put 30 per cent of the effort. They have to be fully dedicated. Ready to take action and solve problems.
Creating structure for your startup and selecting a good partner is a must, but we would like to point out another thing that might put your startup partnership into the danger zone.
4. Turn all of the people in your startup into rainmakers
There is a huge problem when it comes to rainmakers.
They have an awful tendency of becoming prima donnas and end up holding the partnership hostage. Not only that. They might also threaten you to take their clients elsewhere. As a result, other partners start feeling belittled.
Those partners eventually get tired of being constantly threatened, being scared and leave.
That’s why you should develop a startup culture where everyone learns how to be a rainmaker. You need to create a new mindset, one that would involve everyone. People should all be part of the sales and marketing business and be responsible not only for delivering services (that’s the easy job) but bringing in new business.
This new mindset is going to prevent your startup from being trapped in the hands of a single person and will guarantee stronger partnerships.
As we have discussed, building a strong business relationship is a must. But thumping out the details of that partnership has to be more technical, than emotional. In order for your startup partnership to survive, you have to define the business structure, what the partnership should accomplish for your startup. Making sure you have chosen the right path is not enough. Find out if your chosen partner is truly suitable for the startup. Also, don’t trap your startup in the hands of a single person, instead transform your startup into an agile business. All of these steps will eliminate confusion and will keep not only keep your partnership and business strong, but also prevent you from getting grey hair in your early thirties.
Ready to find your perfect partner? Start your dream startup now!