Together…Off The Beaten Track
Should you partner with someone on your startup journey?
Business partnerships intrigue me. And have done so for a long time.
In 2010, while writing a cover story on the journey of Avendus Capital for Inc. India magazine’s first print edition, I remember discussing with Ranu Vohra what made the founding trio stick together. Their partnership has now been running for 20+ years.
I know of an even longer partnership: Paras Plastics, a Noida-based plastic manufacturing firm run by the Upadhyaya-Sood duo since 1985. That’s a mind-blowing 36 years!
That’s not an easy accomplishment. Even the Ambani brothers, bound by blood and inheriting one of the largest business empires in India, could not work together and ended up splitting their inheritance.
So what should you do? Get a partner, or not?
My answer is absolutely yes! It’s a tough journey ahead of you. So it’ll help to have someone to motivate you when the chips are down — and they definitely will be down more often than not.
Speaking for myself, I’ve had a partner in every business I have worked on in the past decade. I’ve taken turns partnering with my spouse, a college mate, a sibling and a colleague. I’ve had a mixed record thus far.
So here are a few learnings for you to consider while making your choice:
Good friends don’t necessarily make great partners: I know this for a fact. Many years ago, I joined a friend’s startup as its third founder. I liked the idea they were working on and decided to go along for the ride based on our liking for each other. I didn’t spend any time assessing what skills any of us were bringing to the table, how we were going to split the work, or even if we were what the business needed.
Just because you liked hanging out together in college does not mean that chemistry will translate into a successful work relationship. It was not surprising at all that we went our separate ways a year later.
Don’t pay with equity what you can pay with money: It’s very tempting to offer an equity partnership to someone who will play an important operational role in the startup. Money is tight and has to reach a long distance. So you think you can offer equity to the person in place of her market salary and hold on to your cash.
Resist that temptation. If you can hire someone to do the job,try that first. At least you can fire them, if things don’t work out. For instance, if you want to hire someone to build your B2B line of business, then consider hiring them on salary + percentage of turnover basis. If that’s not possible, then insist that the person have some skin in the game and infuses some capital of their own.
Bet on a work friend: My most successful partnership has been with someone I met at work. ND and I met in 2005 at a media startup. We worked in the same office for three years. I watched him tackle everything from taxes, HR, admin to what-no-one-else-will-do at that startup. When I left, I told him that he’ll be my first port of call when I start up.
A couple of years later, my husband and I were working on a new venture, and ND was our first choice of partner for our very first startup funded by our personal savings. His all-rounder skills were a fantastic fit for the work ahead. ND and I worked together on two ventures over a seven-year period. And we remain good friends till date, even as we run separate small businesses now.
One of the ventures we built together was a two-sided marketplace. I handled tech, investors, fund raising and demand-side issues. ND handled cash flows, finance, vendors and supply. We managed to double the turnover every year between 2014 and 2017 when we were at the helm of that business.
Even the Paras Plastic partners had worked together in the merchant navy for years before forming their business partnership. One person’s engineering experience complimented the other’s business acumen; moreover, living together on a ship for months at end had built a reservoir of mutual trust that served them well over the years.
So here’s what you should do: look for someone you’ve watched closely at work, whose ethic and integrity match yours, check if you bring different sets of skills to the business, and lastly, arrange to work together for a few months before formalizing the partnership.
If your partner can laugh off your outbursts and forgive you for interrupting his anniversary lunch to b***h about your investor, then he’s definitely worth his weight in equity!
Watch out for my next post on partnering with sibling/ spouse. I’ve done both, BTW :)