Not having the right co-founder or team is repeatedly acknowledged as one of the top reasons why most startups fail. While starting up with a friend has its share of advantages (trust, personal history, similar values etc.), it does also come with its downside (mixing personal vs. professional roles, preconceived biases etc.). Having recently gone through the experience myself I thought I’d pen down a few thoughts on the subject.
Prepare to have your friendship tested. Regardless whether it works out or not, accept that your friendship will never be the same again. Best-case scenario, everything works out well and you’re closer than ever while building a successful business. Worst-case scenario, you never speak to each other again.
Have a “no holds barred” conversation up front.
No topic should be off limits. Discuss everything from your individual vision for the company, personal values & expectations from the business (monetary & otherwise), working style, levels of involvement, preferred roles, financial stability (contribution levels, dependents, forecasted personal expenses etc.), equity split, etc.
Put it down on paper.
It’s completely different to have a conversation about something & come to an understanding as opposed to see it put down in black & white. Expect personal feelings & family obligations etc. to change as time goes on. So however uncomfortable it might be, make sure all agreements are documented to prevent future misunderstanding.
Communication is critical (Timely/Accurate & Continuous).
Everyone has different communication styles & comfort levels with regards to running a business and taking risks. Don’t hesitate to be brutally honest with each other, keep the conversations respectful, solution-oriented, acknowledge the differences & keep the focus on what’s good for the overall business.
Despite the perceived downsides; I believe it is a significant advantage to start up with a friend. Authenticity, trust and leaving your ego at the door are key. Schedule regular touch points to keep the business (and personal relationship) on course. Don’t assume you know what’s on the other person’s mind, despite how well you know them. Take time out to create a comfort level where you support and empower each other, celebrate your successes and learn from what didn’t work.