Issue #6 - Do You Need Partners?
Partners in business are common, but do you need one (or more) to be successful? And, what makes a "good" partner - a framework for evaluating your co-founders.
This week I’m changing up the format. I’ve had a few people ask about partners so I want to focus solely on sharing what I teach when advising first-time founders and fence-sitters still deciding if entrepreneurship is right for them.
But before we dive into this week’s topic, I want to encourage you to ask questions. It’s how you learn and I’ll let you in on a little secret — someone else has the very same question but is anxious about speaking up. Help them while also helping yourself. All you have to do is reply to this email or message me on Twitter or LinkedIn. And I will keep everything anonymous unless you give me permission otherwise.
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Until next time,
⭐ Do you need partners to succeed?
The short answer is “no”. There are plenty of service businesses that have succeeded with one owner. But far more that started with a partner (or several) and eventually morphed into one person owning everything.
Yet, in some specialized industries, the norm is to add partners over time. Think law firms and accounting firms. That model isn’t something I will focus on here. Instead, I’ll assume most of you want to run a less conventional business where you can evolve beyond the century-old, default business model that most of you see everywhere. If so, you’ll love my thinking and opinions.
Is there a benefit to having partners? 💯
Yes, definitely. Just as the old proverb says:
“Many hands make light work” — John Heywood
In a nutshell, you can divide and conquer—splitting the duties to grow and nurture your business. And that’s key. Dividing duties is crucial. If you overlap, you trip one another up and confuse your teams.
But just because someone is able to help spread the workload does not mean they would make a good partner. As with any business, you should guard your ownership fiercely. It’s no small thing to give up equity as that has plenty of ramifications that may cause more pain in the long-run than prosperity in the short-term. There is no magic answer here given every situation is unique yet I’ll venture to say this:
If you can afford to hire a person as either an employee or contractor, go that route. At least at first. Think: try before you buy. That person may want more out of the relationship, but this is in their best interest as well. No one is committed long-term (yet).
I will always recommend avoiding partners as my default stance. Not just to keep 100% control of the business, but also because you can often incentivize people without the need to share equity.
The various tactics are beyond the scope of this topic, but if you're curious, I recommend asking me so we can dig into it in future issues.
🤔 How do you define a good partner?
As with anything important, defining what makes a partner “good” is complex. So I’ve codified my thoughts into several questions that you’ll need to answer. I can’t stress this enough, do your best to be objective. Bringing on partners is serious business with long-term consequences.
1. Do they share your core principles?
By that I mean, do they share similar ideals. Do they value people the same way you do? Would they abandon an existing customer to land a better one? If so, for what reasons? Do they offer objective reasons or can you see unfavorable biases in their reasoning?
Obviously, questions like those above would probably be hard to discover in routine conversation. However, these are the kinds of questions that help each of you understand the other's character. Take the time to define your important questions.
The rule of thumb here is to spend as much time as necessary to unearth core beliefs that overlap. And those that do not. Do your best to decide whether 5-, 10- or 20-years with that partner would be rewarding and satisfying.
2. Do they challenge you to improve?
I'm not talking about shoring up weaknesses. While not a terrible idea, you should focus your efforts on improving your strengths rather than trying to eliminate your weak points. Being well-rounded works in some scenarios, but is not a prerequisite for achieving greatness here.
The challenge I'm speaking of deals with evolving your perspective to take in more data points. A great partner helps you understand viewpoints that don't match your own. Each of you should strive to keep learning, to share new ideas, and routinely revisit prior assumptions, strategies, and tactics.
3. Do they offer unique strengths?
Said another way, are they strong in places where you are weak? It makes little sense to take on partners that all excel in the same areas. Partnerships work best when you can divide the workload.
These don't need to be absolute strengths. In economics, this is called "comparative advantage." In a nutshell, while you and they may be great at the same thing, one of you will be better at another thing. That's a relative advantage and where the focus should be spent.
Other times, this may boil down to who is most interested in a given area juxtaposed with who would be most likely to succeed in pursuing that area. These are considerations that must be fleshed out early-on and with a sense of urgency.
4. Do they share your long-term vision?
A small business can only run in one direction if it wants to increase its chances of success and avoid becoming mediocre. While there are many examples of businesses diversifying, they do this by sacrificing their true potential.
Your partner needs to see the same future you do and want to help realize it. That means saying ‘no’ far more often than ‘yes’ when it comes to choices that would steer your venture away from its potential future. At its core, you all need to be marching towards the same set of long-term goals.
5. Are they committed to the journey?
Business is hard. There will be times when everything feels like it is going well and then times when you don't want to get out of bed. If your partner doesn't plan to roll up their sleeves and muscle through the bad times, you and your business will suffer. It's easy to say they will stick with it, but words aren't actions.
You owe it to yourself and your business to be objective here. Do they have a track record of perseverance? Or do they split when things get tough? What do they want to achieve in the long-term? Will they stick it out just as long as you will?
A couple more things…
Here are some articles I found this week that caught my eye for their brazen content and cheeky attitude. I’m a contrarian as well so this type of stance deeply resonates with me. You’ll grow more if you stop to question the status quo.
Felicia is an excellent writer and a master of her craft. I love the cheekiness of her writing style and her refusal to walk the line. She rejects conventional wisdom and, instead, looks for real meaning. She can help you build a brand.
Aaron teaches at Duke University. As a successful founder, he now shares what he’s learned and helps to empower the next generation of entrepreneurs. I love how his mind works. He sees lessons in everyday life and is skilled at sharing those observations. This one discusses making things feel familiar to us.
Joe Procopio is a multi-exit entrepreneur with plenty of success and failure. He writes about his experiences with start-ups and offers a practical perspective on what is needed to scale. He has held many types of roles in several industries so his viewpoint is well-balanced. Check out how we’ll attract people to our businesses in the future.