Business

How to Choose the Right Partner for your Startup

By April 29, 2020 No Comments

By Brian Flynn

 

People should do what they’re good at. Coders should code. Hackers should hack. Ballers should ball. The thing is, launching a successful business requires doing a whole lot of different stuff. So if that’s what you want to do, you’ve either got to be good at everything, or else you have to be humble enough to admit that you aren’t, self-aware enough to know what you can do and what you can’t, and savvy enough to find the right partners to fill in the gaps.

Startups are a tricky business, and there are a million ideas out there on how best to go about founding one. One of the most extensively debated aspects of the process is whether and at what stage to entangle one’s fledgling offering with an investment or mentorship partner such as an accelerator, incubator, or excubator.

As a basic proposition, it makes absolute sense to seek seasoned business partners for your new venture, particularly if you are a first-time entrepreneur. There are a whole host of practical and legal aspects to starting a business that far exceed the skill set of the average engineer. And even if, in addition to being a brilliant tech guy currently embroiled in masterminding the disruption of the modern search engine, you are in fact also a canny operator who knows all about product-market fit and KPIs and IP law, chances are you haven’t got the time to handle all of that on your own. Your job is to build a product that fills a need in the marketplace so that it can start generating revenue as soon as possible. You should surround yourself with other people who are good at doing everything else. After all, the ability to delegate is one of the most important traits shared by all successful CEOs.

But you don’t want to bring just anyone on board. You have to be more discerning about choosing your partners than just “whoever will write me a check” or “whatever program will accept me.”

When it comes to equity partners, of course, you don’t want to be giving away chunks of the pie to people who aren’t going to drive your business forward in one way or another. On the other hand, you can’t be too precious about holding on to your shares either. Remember that 100% of nothing is still nothing. I’d rather have .01% of Facebook than 80% of Friendster.

Choosing partners with the right skill set is of course critical to your business. You need seasoned serial entrepreneurs on your side who can help you find the right product-market-fit, raise capital at the right time and on the right terms, price your product correctly, dot all the legal and administrative I’s and T’s, and do anything and everything else that needs doing.

But I think that it is just as important to partner with someone who has the right basic human values. After all, this is someone with whom you’re going to be going down a long, hard road, spending quite alot of time, and to whom you are entrusting your future. Your partner may be representing you as he speaks with potential investors or customers, so you want to make sure you share a vision and that your goals and priorities are in sync.

Your partner (and you) ought to have integrity. This may seem obvious, but many people overlook the basic truth that if you are not trustworthy and honest, it will crush your reputation which in turn will ruin your business. If you have the trust of your customers and your investors, you will find you have the freedom you need to make the right decisions to propel your business forward.

Humility is also so important. The problem with people who are arrogant and not self-aware is that they think they know it all, so they don’t listen to the advice of others who know more than they do, and are so blinded by their conviction in their own brilliance that they can’t tell when they’re barreling towards destruction. This type of founder may be so in love with his own idea that he won’t be able to see that it just isn’t going to work.

The humble guy, on the other hand, really listens. He’s open to learning from the wisdom of others and can see and hear what’s really going on around him. That doesn’t mean he’s lacking in self-confidence or conviction. It only means he’s smart enough to know what he doesn’t know and clever enough to collect data in the form of both metrics and anecdotal advice and use it to guide himself in a positive forward direction, even if that means pivoting on his original idea.

If you’re a startup founder, you already know about having grit and determination. This is not a pursuit for the faint of heart. So you absolutely don’t want a partner who’s going to cash out and head for the hills at the first sign of trouble. You need someone who’s going to get down in the mud with you after the landslide and help you figure out how to rebuild your house from the rubble, and who gets that the new thing might be an entirely different sort of house – if it even is still a house – from the one with which you started.

These are all things to take into consideration before signing on with anyone, whether it’s a co-founder or an arms-length investor or anything in between. I personally think the best thing a startup founder can do is get himself into a position of strength by bootstrapping before seeking partner-investors. A company that already has some traction in the market is in a far better leverage position to dictate terms than one that is still an idea on a bar napkin.

At the end of the day, you want a partner who shares your core basic values about business and also about life. Take the time to really interview the person or people with whom you’ll be taking this journey. Are they the kind of people who are secure enough about their own personal achievements that they can feel happiness at and actually wish for the success of others?  You shouldn’t take yourself too seriously, and neither should they. After all, you’re trying to build something that will change the course of your life for the better. So it doesn’t make any sense if, in the process of doing that, you end up miserable, bankrupt, and possibly divorced, all because you partnered with someone who’s only interested in his own bottom line.

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