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Getting the Most Out of Co-founding and Business Partnerships - Power Dynamics of Business Partnerships

I am interested in discussing more on the power dynamics of business partnerships.
Let's use the term co-founder and business partner interchangeably.
I will stick to the term business partner as the term is easier to understand.

A successful business partnership is like a successful marriage.
There is a special bond that you share with someone when you build a successful business together.

At the same time, failed partnerships are behind many business failures.

Possible threads

  1. How do you find out about what you want in a business partnership?
    Identify working styles, skill sets, communication & management styles, experience, commitment, etc.
  2. How do you find potential business partners?
    Events, LinkedIn, introductions, etc.
  3. How do you evaluate your potential business partners?
    Work on mini-projects, conversations, etc.
  4. How should you structure your partnership legally?
    Partnership agreement. Buy-out clauses, reverse vesting, etc.
  5. How should you candle business disagreements?
    Dispute resolution process (informal, gentleman's agreement to resolving the dispute written on paper)
    Conflict resolution skills
  6. When should you break up with your business partner?
    Having a clean break, continuing with or exiting the business smoothly

Very important topic, and there is little good literature on this as far as I know.

Matthew: A successful business partnership is like a successful marriage.
There is a special bond that you share with someone when you build a successful business together.

Indeed.
Both the closeness and, as weird as it may sound, also the "business intimacy" it involves, since your partner is your partner in acquiring wealth, resources, and recognition from the world, all crucial life endeavors.

I haven't written much on it because I feel the "experience" pillar is not as big as for other fields.

By the way, Matthew, I think you have good experience here, and now you're an advanced operator. If you'd like to write a post about this one day, I'd be very happy to publish it and share it (we the appropriate anonymity level you prefer).

GOING SOLO VS BUSINESS PARTNERS

Also, the first question to ask before you get into all the rest:

Should you go solo, or seek partners?

For example, before starting ThePowerMoves.com, I was looking for some partners, exchanged a few emails, and even sat down with a guy before I decided to just start on my own.

I think that going solo did a few good things for this business, including:

  1. Saving time (no time on discussing, agreeing, clarifying... )
  2. Full decision making (if one wants to cash out, or go in a totally different direction)

And, for those who care: "founder" title, no "co-", full credit, full "spotlight", etc.

And a few cons, of course:

  1. Less brainstorming opportunities =
    1. More potential mistakes that didn't become apparent before they turned out to be mistakes
    2. Fewer ideas (albeit that's been mitigated, and maybe wholly made up for, by this forum)
  2. Less experience with co-founding power dynamics:
  3. Missing out on complementary skills (imagine if I had partnered with a guy who was experienced in YouTube video-making, for example, how that would have changed TPM's presence on YB)
Have you read the forum guidelines for effective communication already?

Very important topic, and there is little good literature on this as far as I know.

There is an insightful book on this topic.
The Founder's Dilemma
I took the book off someone's table at a coworking space and skimmed through the book last year.
I should search for an audiobook version and continue with the book.

One key tenet of the book is whether entrepreneurs want to be king or rich.

If you want to control the company and be king, raise less money, and give the investor less power.
Hold on to more equity and keep your reins on the company.

If you want money, raise lots of money, expand your business, and hire people that can even potentially manage the company better than you.
Hire an external CEO if you think he can manage your company better than you can.

The problem is that many founders want both power/control and money from founding the company.
They struggle with this potential tradeoff and make bad decisions.

For me personally, my priority would depend on the kind of business that I start.
I lean more towards being rich because you can start other ventures with the money down the line.

The book also talks about how to form your founding team.
As such you should not partner with someone who wants control when you are going for fast growth and money.

Both the closeness and, as weird as it may sound, also the "business intimacy" it involves, since your partner is your partner in acquiring wealth, resources, and recognition from the world, all crucial life endeavors.

Business intimacy is a fascinating term.
It does capture the uniqueness and closeness of successful business partnerships.
All these endeavours do come with challenging times, long hours, and tough conversations.

I cannot speak for everyone, but many entrepreneurs actually spend more time with their business partners than their significant other.

I haven't written much on it because I feel the "experience" pillar is not as big as for other fields.

By the way, Matthew, I think you have good experience here, and now you're an advanced operator. If you'd like to write a post about this one day, I'd be very happy to publish it and share it (we the appropriate anonymity level you prefer).

It will be a huge pleasure to contribute to this topic.
We could work up to a post through mini-discussions along the way on this forum.

I still have many different dynamics to explore for business partnerships.
Probably, the dynamics will change depending upon many factors like

  1. Industry
  2. Nature of business
  3. Size of business
  4. VC versus bootstrapped
  5. Experience and skillset of partners
  6. Size of the founding team

GOING SOLO VS BUSINESS PARTNERS

This is very interesting as well.
Some people find business partners because they are afraid of going solo.
I don't think that this should be the primary consideration when considering whether to find a business partner.
It may create an unconscious, dependent-like dynamic.

I think that going solo did a few good things for this business, including:

  1. Saving time (no time on discussing, agreeing, clarifying... )
  2. Full decision making (if one wants to cash out, or go in a totally different direction)

I'm a big fan of being agile and lean.
If an idea can be tested by one person quickly, why not go ahead and start something first?

There are also super founding teams with a history together.
So the founders understand each other's working styles really well and can explore ideas really quickly.
I don't think that this is very common though.
Personally, I have not found my ideal team.

I do realise great synergies can come from working remotely as well.
As we have seen through this forum.
I love face-to-face communication though, at the same time, I would not constrain myself to explore partnerships by physical proximity.

Both the closeness and, as weird as it may sound, also the "business intimacy" it involves, since your partner is your partner in acquiring wealth, resources, and recognition from the world, all crucial life endeavors.

Business intimacy is a fascinating term.
It does capture the uniqueness and closeness of successful business partnerships.
All these endeavours do come with challenging times, long hours, and tough conversations.

I cannot speak for everyone, but many entrepreneurs actually spend more time with their business partners than their significant other.

I haven't written much on it because I feel the "experience" pillar is not as big as for other fields.

By the way, Matthew, I think you have good experience here, and now you're an advanced operator. If you'd like to write a post about this one day, I'd be very happy to publish it and share it (we the appropriate anonymity level you prefer).

It will be a huge pleasure to contribute to this topic.
We could work up to a post through mini-discussions along the way on this forum.

I still have many different dynamics to explore and learn when it comes to business partnerships.
Probably, the dynamics will change depending upon many factors like

  1. Industry
  2. Nature of business
  3. Size of business
  4. VC versus bootstrapped
  5. Experience and skillset of partners
  6. Size of the founding team

GOING SOLO VS BUSINESS PARTNERS

This is very interesting as well.
Some people find business partners because they are afraid of going solo.
I don't think that this should be the primary consideration when considering whether to find a business partner.
It may create an unconscious, dependent-like dynamic.

I think that going solo did a few good things for this business, including:

  1. Saving time (no time on discussing, agreeing, clarifying... )
  2. Full decision making (if one wants to cash out, or go in a totally different direction)

I'm a big fan of being agile and lean.
If an idea can be tested by one person quickly, why not go ahead and start something first?

There are also super founding teams with a history together.
So the founders understand each other's working styles really well and can explore ideas really quickly.
I don't think that this is very common though.
Personally, I have not found my ideal team.

I do realise great synergies can come from working remotely as well.
As we have seen through this forum.
I love face-to-face communication though, at the same time, I would not constrain myself to explore partnerships by physical proximity.

On the personal side, going solo brings about a lot of personal freedom.
From the Bill Gates thread, I am also someone who enjoys the idea of taking your laptop to any part of the world to work on your own idea.
If your business can self-sustain for a while, you can literally take 2 weeks off anytime you like.
Freedom is beautiful.

External Partners

External partners are also an interesting topic.
There are more like your very close, reliable brother or sister.

Of course, many companies put their partners just to build credibility and to enhance their image.
But that does not discount from possible great partnerships between founders from different companies.

Some great insights here.

Some people find business partners because they are afraid of going solo.
I don't think that this should be the primary consideration when considering whether to find a business partner

Very true.

If it's the very first venture one is starting, it could make sense.

If the options are: take some random guy on board, or never try anything, then starting with someone you don't get along with might pay off in the future, since you at least get started on entrepreneurship.

Of course, as you say, beyond that "getting over the hump" factor, then a fear-driven approach is less likely to lead to good decisions.

Have you read the forum guidelines for effective communication already?