Ever conjured up a great business idea with your friend? Perhaps your clique thought of opening a cafe or starting an online bakery? While setting up a business with close friends might sound like a dream come true, it’s not without its challenges.
For one, those who do start a business with a friend might have a higher chance of seeing the business fail. In The Founder’s Dilemmas: Anticipating and Avoiding the Pitfalls That Can Sink a Startup, Noam Wasserman states that each social connection in a founding team of friends increased the likelihood of a founder leaving by 30%! That said, there are many businesses founded by friends that thrive till today, even in the current climate.
If you are thinking of getting into a business partnership with friends, lessons from other such ventures may help ensure that your friendship drives business growth.
Lessons to Learn from Businesses Founded by Friends
While we like to think we know our friends inside and out, it’s pretty difficult to know how you’ll mesh as business partners. From differences in working styles to preferred ways of handling conflict, when push comes to shove, you may need to choose between maintaining a professional relationship or a friendship. However, there are several long-standing businesses that overcame early start-up struggles to become world-renowned brands. Here are a few key takeaways:
1. Play by the Books & Follow Through with Plans
This one is worthy of mention, especially given what went down between Facebook’s founder, Mark Zuckerberg, and co-founder, Eduardo Saverin. In June 2021, Facebook hit $1 Trillion in market value. However, the story behind this social media giant is not all sunshine and rainbows.
If you’ve watched The Social Network, you might know that several masterminds were involved in transforming the social platform into the global tech giant it is today - and one of them is Eduardo Saverin, who now resides in Singapore. Going through several ups and downs, including lawsuits, their tight friendship began to fray because of 3 main issues – a cultural divide, not following through with plans, and competing against their own business. Besides leading different lifestyles, the tipping point came when Saverin ran unauthorised Facebook ads for his own startup and failed to complete 1 task given to him by Zuckerberg - to get funding. The rest is history.
To avoid having to go through a similar experience, be clear and concise about roles and responsibilities from the very beginning. Avoid bickering about who is responsible for what. Define each person’s role and what they’re responsible for from the get-go. A comprehensive business plan is also a must but be sure to follow through with all your plans instead of delaying them to kickstart other projects. Finally, always maintain clear communication by keeping an open line of communication with each other. Whether it’s simple and straightforward or a difficult discussion to be had, silence can breed negativity.
2. Stay Authentic
We’re sure you’ve heard of the saying “Money can’t buy happiness." And it sure can’t buy genuine friendship and self-awareness. Running a successful business can change your lives drastically - and the same supposedly happened to Steve Jobs.
While working together at HP in 1971, Steve Jobs and Steve Wozniak ended up becoming fast friends, eventually co-founding Apple Computers Inc. together in 1976. According to Wozniak, dynamics began to shift when Apple took off in 1977 after receiving its first big investment. While Wozniak remained content as a computer engineer, Jobs was more passionate about creating a personal brand and advertising their products to the masses. Though not much is known about how that affected their friendship, one thing is for sure, their personal choices led them to different paths in life, and Wozniak left Apple in 1985.
When starting a business, whether with friends or on your own, it can be easy to lose sight of everything other than the revenue and bottom line. If you feel like your friendship is slowly becoming less authentic over time, they may feel the same way. Raise it up in a conversation. Get out of the office. Enjoy each other’s company as you did in the past - it may function as a reset button to your friendship. When going into business with a friend, you’re bound to see different sides of their personality, so be sure to accept and/or celebrate your friend’s individuality. If, and when, you have a disagreement, don’t hold onto it. Learn to forget and move on, because it’s not benefiting anything or anyone, and especially not the business.
3. Friendship Always Comes First
“Friendship always comes first.” At least, that was the foundation Ben and Jerry’s was built on. From the outset, Ben Cohen and Jerry Greenfield decided to make sure that their friendship was their priority. These friends that met in the seventh grade are a great example of a business partnership with friends succeeding.
Another great business to draw inspiration from is Anytime Fitness. Co-founders Chuck Runyon and Dave Mortensen officially opened the very first Anytime Fitness in 2002. Since then, they’ve seen exponential growth, now with more than 4,000 gyms across the world. According to Runyon, the secret of success when going into business with a friend is to be able to say you’re sorry, that you made a mistake, and never to say, ‘I told you so’.
Though workplace conflict can be healthy, working actively to resolve it is key. At the same time, make your friendship an asset and never be embarrassed to show that in front of your co-workers!