Staying aligned on the big things (with co-founders and partners)

Business partnerships are hard, but when they work they are magical

Today I wanted to talk about business partnerships. It’s been a topic of conversation with 5+ founders I’ve talked over the past few months.

Bad partnerships often kill startups, but great partnerships help the business go further than you would alone.

“If you want to go fast, go alone, if you want to go far, go together”

I’ve had 3 business partnerships in my entrepreneurial career. Each had challenges and magical moments. My first business partnership was bad (I won’t dwell on that today), my second partnership worked well but we had other product/market challenges, my third has been the most successful so far.

If you’ve noticed, I’m using the word “partnership” here and not co-founder. I believe co-founder is a label reserved for those who join in and around the time the product first started. They could be a partner, but sadly not all get that far. Future post on equity splits and vesting.

Business partnerships can be a co-founders from day one or day 456 when you add an essential person to after the company later. Often times that person can come on with skills that round out the founder, bring money into the company, and/or is happy to just pick up a shovel and bear real weight in the company.

Either way, a great partnership is special.

The two partnerships worked out well

The common thread on my most successful partnerships was great alignment on:

• shared business values

  • i.e. how customers/employees are treated, financial spending habits, build vs buy, grow at all costs, stay small

• the “initial” split of responsibilities (as it may change as the business evolves)

  • i.e. marketing, sales, operations, product/services, finance

• the future expectations as the business grows

  • i.e. hire people to grow + need to manage people, quit FT job, allowed side-gigs, a partner wants to leave

• expected outcomes (with timelines)

  • i.e. profits out of the business, lifestyle, exit scenarios + what’s a real win for each partner

• shared “value” of their contributions

  • i.e. compensation, stock, time commitments, network, IP assets, cash contributions

Last but not least… A mutual respect that each person is doing the best they can… whatever that looks like.

The magic when it’s all working

This is my best description of what it feels like when it’s all working.

• The weight of the pressure feels shared

• Everyone feels valued, there's no resentment

• Most of the time it doesn’t “feel like work” to work together

• You can move fast without worrying about the other’s feelings on decisions but are excited to fill them in later

• Collaboration on the big things that jointly matter (like numbers)

Here’s a podcast that describes that partner feeling oh so well as a COO.

• https://review.firstround.com/podcast/episode-61

Now, it won’t always feel THAT good. That’s OK too. As long as there are ways to communicate and have hard conversations you can address the misalignments without letting it drift too long.

So how do you get / maintain alignment (and that magical feeling)?

It’s hard to get to the root of alignment without a conversation.

These questions could help keep partners on the same page up front and help establish some agreeable ground rules + acknowledge the potential imbalances where partnerships go badly.

Questions to ask early in a partnership (ideally before officially signing as a partner)

• What types of tasks either partner never want to do (customer service, sales, manage people)

• What are expectations on exit scenarios? (timeline and amount)

• How will we fund the business? (raise funds, bootstrap, combination of both)

• What happens if one partner contributes cash to help the business?

• What happens if one partner needs to take a salary and the other partner does not?

• Do both partners value their time equally?

• What happens if one partner is committing "materially more time" to the company?

• What happens when a partner wants to leave?

• Do you enjoy the subject matter space?

• How do you view your standard cost of living expectations and increases over time? (i.e. what’s the minimum you need to get by)

• What will each partner be responsible for? Key responsibilities and expectations (day to day)

• Who manages accounting/money management?

• Who manages service/front line employees (regardless of if you think you’ll need them)?

• Are there specific quantifiable assets/IP either partner is bringing to the company?

• How do you best take feedback? (in person, written)

• When is the best time to give you feedback?

• What happens if there is a deadlock on a specific key decision (product direction, taking an enterprise client…)

It’s easy for these questions to feel very personal, it may be best to answer them independently in a written format so emotions can be less of a factor.

These questions can also be periodically “refreshed” to check alignment. Life happens, things change… what was once true may not always be true.

My favorite periodic questions to help uncover their stress

• Are you still having fun?

• Where could you use more help?

• What keeps you up at night?

• How are you? (pause) No, really how are YOU?

These are far from an exhaustive lists of questions but these are just all ones from my bank.

Final round up

Everyone “thinks” they are aligned, but if you’re not… it’s better to find out sooner vs later.

Don’t rush into a partnership and try not be blinded by shiny things or “go to the grocery store hungry” (i.e. making a rash decision because you are desperate for someone else to bear the weight).

• It’s easy to be infatuated by someone’s experience, connections, great story, personal charm, or successful track record.

• It’s easy to "default” to thinking you have shared values (where as much as we try, we truly only have one point of view of the world).

• Be aware if ou have this feeling of “could I be this lucky” or “I don’t want to spook them by asking personal questions”.

Ask them! Get aligned and get to that magical feeling!

I have some other notes for this post that have more to do with splitting up equity and responsibilities. IMHO 50/50 is never the way to go. If that’s of interest let me know as I can make sure that’s the next post written.