Partnerships. Strategic Alliances. Joint ventures. Investors. Vendor-Client relationships.
Teaming up with other humans is undoubtedly the fastest way to create extraordinary business success. Good partnerships are greater than the sum of their parts.
No one is an island. No entrepreneur succeeds alone.
Whenever and wherever you find yourself with a terrific, exciting opportunity to jump into something with another human, you also expose yourself to huge risk.
As The Shrink for Entrepreneurs, about 50% of conversations I have with clients center around the stress, chaos and heartache of business partnerships gone awry.
Here’s a list of seven questions all my clients wish they asked their partners – and themselves – before they jumped into business-bed together.
Ask yourself these questions. Ask your biz partner.
Before it’s too late.
1. What does success look like?
When you’ve got a sizzling hot new idea and you’re drunk on the excitement of it, it’s easy to look a potential partner in the eye and say “Do you want to come with me and change the world?”
Steve Jobs said precisely this to John Sculley, in Central Park, when he asked him to quit his role as Pepsi’s CEO and join Apple.
It’s tempting to want to emulate these kind of grand gestures. But even though John said yes… he eventually contentiously left Apple. The partnership ultimately didn’t work out.
It’s staggering how many entrepreneurs leap into bed together without articulating what success will actually look like. If you’re going to work together, you need to understand what both of you consider a win to actually be.
Are you aiming for an exit? If so, when? Are you taking your idea all the way? And how far is that? Or, do you see yourself as someone who starts things and ideally hands them off so you can jump into something new?
How big are you willing to go? What size of vision are you willing to keep showing up and working toward??
Ideally, these are questions you want to be confronted with. Hopefully your partnership goes so well that you have to answer them.
You can avoid a lot of heartache by clearly defining success, together, before you get started.
2. What does failure look like?
I’ve seen so many founders essentially sitting in a slowly sinking ship together, each refusing to reach for the life raft because they don’t want to let the other person down. Or – even worse – because they each incorrectly believe the other person in the partnership is more optimistic about turning things around than they are.
People don’t like to articulate their personal definition of failure in when they start a new project or business. It feels like a bummer to do so. But also, they’re hiding: If and when they fail, they won’t notice that they failed. Not defining failure means it won’t hurt so bad if it happens.
The danger of this is that – as we all know – most business ideas fail. The problem is, they rarely do so catastrophically in ways it’s easy to notice. Instead, they putter along in a slowly declining direction.
When entrepreneurs fail to define what a failure is, they fail to draw a line in the sand that lets them say “It didn’t work out”. They fail to define when it’s okay to free themselves from a bad idea and a bad partnership.
When you kick off a new venture with a partner-in-crime, sit down and do the uncomfortable work of agreeing on (and documenting!!!) your point-of-no-return cut off.
I call it a new venture’s – or project’s – “Minimum Viable Outcome”. Know what yours is. Ask your partner for theirs. Give your MVO a specific timeline and a specific target.
Ask yourself and your partner: “What is the absolute minimum X month result – be it sales, or some other KPI – that would be validating enough to keep us interested and committed to this opportunity?”
Agree, here and now, that if that timeline (of say, six months) plays out and you come in UNDER that number… that you’ll both call it a tragedy and move on with your lives.
Be real about the number you set: If hitting 80% of your MVO target feels like it’d still be enough to make you want to keep trying… then you didn’t define the real MVO. Don’t bullshit yourself about what is and isn’t a failure.
3. How will you feel about sustaining the partnership if things just go “okay-ish”?
In my experience, most joint ventures (and business projects in general) are not wild overnight successes. Nor do they turn out as abject, disastrous failures.
They go okay.
It’s never as fast as you think. It’s never as easy as you hope. It’s also never as difficult and high risk as you worry about, late at night.
Most things go okay-ish.
Are you ready for okay-ish?
Will sustaining the partnership make sense – by investing effort, time and even money – in the event that it produces moderate, mediocre results?
Preparing for success and failure is smart. Being ready for “good enough” is true wisdom.
4. When and how are you going to untangle your partnership and part ways?
It’s essential that you ask about success, failure and the in-between. Because at some point, the partnership will come to an end.
Less than 1% of business partnerships last “until death do us part”. When you’re enamored with an exciting idea, the future looks peachy.
When you’re “in love” with someone you believe to be your ideal partner, it’s easy to think you’ll build an empire and lifelong legacy together. The reality is, founders – of even the world’s most successful startups – usually see their founding team re-shuffle within 5-10 years.
The world’s greatest rock bands always experience “creative differences”. Your idea sounds great, but five years is also a really long time. Paradoxically, five years will also speed by in a flash.
Make sure you’re proactively planning a strategy that can fairly (and quickly) untangle your affairs. Make sure you know how to free both parties from the partnership.
Some of the worst partnership troubles arise when both parties want out of a venture, but the financial resources to fairly buy-out or compensate one or both parties aren’t yet available.
Don’t let your partnership become a prison. Always plan for exits. Not just the good ones. Know how you’ll both get out, in both wildly successful and disastrous scenarios.
It’s likely that reality will go okay-ish – as we said – so be ready for that too.
5. How much energy and work are you both willing to put in?
Nothing… NOTHING… creates more conflict than two business partners who fail to think about this question before they commit.
Entrepreneurs have very different personal sets of values that drive them in business.
Don’t make the mistake of assuming yours are the same as everyone else’s. Or even the same as one specific person (your partner) you think you know so well.
Are you building this thing to create a legacy? To scale and dent the universe? Or are you doing it to create freedom and lifestyle design for yourself?
The tension between “freedom” and “impact” – doing enough to escape vs sacrificing everything for a legacy bigger than yourself – is just the tip of this question.
It’s complicated, because most entrepreneurs want a bit of both. The question becomes: How much impact before we take a break? How much freedom is too much?
I’ve seen so many successful partnerships tragically fall apart because one entrepreneur wants to kick back and enjoy the success, while the other still wants to push ahead for growth.
It can happen because personal definitions of success itself are different: What I consider a solid annual income living in New York City (with NYC bills to pay) is wildly bigger than what my partner in the midwest might aspire to.
It can also happen because our internal drivers and values are different: We might agree that we’re aiming for X, after which we kick back by the pool as nomadic and free entrepreneurs. What if you get bored of that life before I do?
What if you want to take the asset we’ve built together – that in your opinion is criminally under optimized and still filled with huge growth potential – and grow it beyond what I ever wanted? Do I still get paid for your efforts, even though all I want is a four hour work week and cocktails on the beach?
6. How often should you both question the “big picture”?
Founders have to wear a lot of hats. Especially early on, they must do a bit of everything and get good at switching between roles.
The biggest, toughest hat-switch to make is the switch between thinking and doing. The cerebral work of coming up with smart ideas is super important, because it sets the overall direction and vision of any early-stage venture. However, the grit-and-hustle work of relentless action on those ideas is equally critical.
Execution is everything.
… but so are good ideas.
Spending all your time in your creative bat cave – thinking up ideas but never acting – makes you a clueless dreamer. Likewise, an over zealous focus on execution can result in working on the wrong ideas, missing opportunities or not seeing the forest for the trees.
It’s not just as simple as doing a bit of both, either. Finding the right oscillation between strategy and execution is a delicate art.
Entrepreneurs drawn to strategic thinking often struggle to fully follow-through on their ideas: As soon as a project gets tough, they prematurely retreat to the comfort of the white board to re-think everything.
Execution rockstars – who tend to be hustle, sales or biz-dev superstars – can make any idea work through sheer force of will, but often end up keeping a bad business idea on life support far too long.
Sorting out your own individual balance between strategy and execution is a critical step in your entrepreneurial evolution. Matching that balance to your business partner exponentially multiples the challenge.
If you meet monthly to set out KPIs or targets, you have to be confident your partner is going to put her head down and execute. You have to both come up for air – to ask strategic should-we/shouldn’t-we questions – at the same time.
If you don’t ask yourself and your partner this question, you’ll forever be in different head-space: You’re trying to get things done, they’re wondering if you should both pivot. You’re re-thinking the narrative you present to customers/investors, they’re out there selling it.
Good partnerships thrive because of pre-framed, pre-decided structure. Set a schedule of top-level, bird’s-eye-view check ins. Then stick to it. Once a month, once a quarter… even once a week. However often you think it’s right for your business to question everything doesn’t really matter, so long as you’re both on the same page.
There’s nothing that breeds resentment faster than a business partner who burns days gazing into the “existential strategy void” while you’re making shit happen.
Make sure you have an agreement in place that when you’re not working together to ask the big questions, you’re both getting busy executing on the plan you set in the last strategy meeting.
7. How could change in your personal lives change your answers to these questions?
The questions we’ve asked so far have presupposed that your life maintains an equilibrium. In other words, they’ll serve you and your partner well, assuming nothing major changes for you. And assuming nothing major changes what you value.
The tricky thing about partnerships, especially successful and long term ones – and the most successful partnerships should last a long time – is that people change.
Over a long enough time period, the probably of massive personal-life changes happening… rapidly approaches 100%.
Think about the things that could occur in someones life that could shake them to their core, and cause them to – by necessity – reevaluate their partnership with you:
- The birth of a child
- The death of a loved one
- Getting married
- Getting divorced
- Mental illness
- Chronic physical illness
- Spiritual awakening
I’m not even kidding about that last one.
I’ve witnessed entrepreneurial partnerships in which one participant has had a bonafide (if subjective) spiritual experience, causing them to totally reorganize their values, to withdraw from the mission of entrepreneurial flourishing and to essentially live a monastic life.
This was kinda a curveball for their business partner to deal with.
The thing about the above list – by no means complete – is that each of these events has the power to re-write the motivational values humans are driven by, at the deepest levels of their psyche.
If your partner goes through one of these external, random, chaotic events… chances are their answers to the fundamental questions that govern your partnership will change. Sometimes they’ll change overnight.
The definition of success. Of failure. What is worth sustaining versus pulling the plug on. How to part ways. Questioning the high level strategy.
… it’s easy to see how any one external life event would change everything.
And it’s worth mentioning, this may not happen to your partner. It might happen to you.
If you find yourself sitting down to collaborate with someone on a vision that could carry you both years into the future, you need to have this discussion. You need to understand that what you’re about to embark on is closer to a “business marriage” than a simple project collaboration.
Nothing is “…not personal, only business”. Every entrepreneur operates – at their best and at their worst – as a central node in a complex web of social relationships.
Our personal lives matter. Your sleep last night, your spouse’s office drama, that conversation you had with your mom, your mortgage, your kid’s report card… it’s all part of the web. Your business isn’t separate from your life, it’s an organic plant-like thing that grows out of your life.
The same is true for your business partner.
The ultimate take-away from this article should be that you need to have these conversations, and that finally you need to assume that tremendous changes WILL happen. Changes will even happen to what you think is important or what you think is your “mission”.
And these changes aren’t your fault. They just… are.
The truth is that your partnership is made up of humans. And as humans, you cannot always escape chaos in your lives. Life is messy. You are messy.
Partnerships that fail to accept – and plan for – these truths are fragile. They crack under the first sign of all-too-human chaos.
By answering these questions and by preparing for your answers to inevitably change in ways you can’t imagine, your partnership gains the supple strength of flexibility.
You should have clear agreements, incentives that align and accountability. You should have you and your partner pinned down, on paper, as engines of value-creation within the business you’ve partner on.
And, you should also establish a mutual sense of each other’s humanity. Of the messy, wonderful vital life behind the suit-and-tie.
It’s your business partner’s humanity, after all, that makes them worth partnering with.