How I’m learning to prevent a messy business fail ✌🏼
One of my initial business partnerships went sour a few years ago. Why? Several reasons that I can identify in hindsight. One big one is that we didn’t have a binding contract and my partner changed her priorities. This was my first experience of a “business divorce” and it hurt. 😳
As always, with distance, it is easier to see what went wrong and to extract learnings. This painful experience made me more aware of what to look and ask for when teaming up in business.
👉🏼Here are 3 things that I think are important to consider:
While partnering up can be a great way to extend existing expertise and reach, without a legally binding contract you’re setting yourself up for disappointment and potential conflict. Contracts bring clarity for all the involved parties. Personally, I think it is critical to engage an experienced lawyer to help set up the company from the start. It’s worth the spend.
Most people team up based on a personal friendship or co-worker relationship based on an idea they are passionate about. Granted passion and trust are essential. But to thrive, a good partnership should be grounded on a solid business understanding. Even if an partner is “silent” , there must be a common understanding of the company vision and goals, and these should be aligned with a focus on financial return or the agreed upon “prenups” 😉
No one is an expert in all areas. The sweet spot is diversity! Too often I’ve teamed up with people that have strengths and skills similar to what I bring to the table. This homogeneity created a skewed disbalance and too few resources to draw from. Pick partners that bring differing expertise that enrich your value proposition. You may have to learn to speak each other’s language – but the benefits of combining skillsets far outweighs the initial unfamiliarity.
Now after many months of interesting Covid-time pro-bono projects but too little entrepreneurial innovation work, I’ve taken the plunge. I’ve invested in a new business venture with two other experienced professionals. And the good news: we’re a multi-functional team, with a shared set of values and have a legal contract. 😎💥
If you’re interested in more stories “Founders at Work: Stories of Startups’ Early Days” is a collection of interviews with founders of famous technology companies.