Many successful businesses have been co-founded with friends.
But it turns out that these businesses have a tendency to fail. To fail more often than businesses co-founded by complete strangers.
One of the reasons for the higher failure rate is that friends often avoid difficult conversations with each other in regards to the business. They avoid these conversations as a way to preserve the friendship.
Another reason seems to be that when we are friends with someone we, correctly, believe that we know them well. But while we may know them personally, we likely don’t know them in a work setting.
As you may then expect, co-founders that have worked together and that aren’t afraid to have difficult conversations have a pretty good chance, relatively, of success in business.
Like many things in life, if you’ve done something well before, you’re likely to do it well in the future.
If you want to succeed in business with friends, it pays to test the waters.
Testing The Waters With Friends
You want to start a business with a friend or friends. You’ve never worked with them before.
Take some advice from Jim Collins when he discussed his Bullet concept. What Jim learned about successful companies is that they were almost always firing bullets. Meaning, they had little tests going in the background. New products. New ideas. All kinds of things. Then, when the time came for a big change, these companies had some data to go on. They didn’t just make a huge bet based on hunches.
You can do the same by firing bullets with friends. Try working on a small project with them before launching a big business idea. Before launching a franchise gym in your city, try building a swing set together for your kids.
By doing this you learn what it’s like to work together. Not to just be friends. If you find that you don’t mesh well in a work setting, you can still salvage the friendship.
When you build a swing set together and fail, it’s probably not a huge deal. If you launch a business together and fail…that can be another story.
The Benefits of Friendly Business
This is not to say that you shouldn’t start businesses with friends. In fact, I think there can be benefits to doing just that. While there are some things to watch and prepare for, it can make a lot of sense to go into business with friends…
#1. Core Values
With most of your friends, you likely know their core values. What motivates them. What they care about most. How they make their decisions.
This is very difficult to understand with another type of co-founder.
Core values come into play almost 100% of the time in business. If you know what your friend stands for, you know how they will react in many business situations.
#2. Complementary Skills
One of the keys to working well with someone is understanding each other’s strengths and weaknesses. We all have them. But we don’t always know what they are in each other.
With friends, we likely know what they do well and what they don’t do well. And they probably know the same about us. This knowledge can be incredibly beneficial when it comes to business…if the styles mesh well, meaning that we do some things well and the other person does other, important things well.
#3. Shared Expectations
If your friend has the same expectations in life, you have a good chance of doing well in business together. But if you have certain aspirations and your friend has others, you’re probably better just staying friends.
With many friendships, especially close ones, there are shared expectations and visions for life. This can be a really good thing when it comes to running a business.
#4. Emotional Style
Friends often share emotional reactions to life. We grieve together. We laugh together. We do all kinds of things together. Life has a lot of ups and downs and friends are often there to go through it all with us.
Well guess what…business is full of ups and downs. All kinds of emotions. It brings out the best and worst of life. Having someone that you know well and that you mesh well with emotionally can be a great benefit when running a business.
#5. Shared Rewards
Business can often succeed. In fact, most entrepreneurs I’ve talked to, listened to, read about and more, have often said that they wish they would have started sooner. Meaning, they realized too late that there was no reason to postpone starting a business. It wasn’t that scary and the benefits were wonderful.
If you go into business with a friend, odds are pretty good that you will have struggles, but the odds are also good that you will see incredible rewards. Financially. Personally. All kinds of things.
It’s really awesome to go through that alone. Or with a co-founder that you don’t know that well. But it’s really rewarding to succeed with a great friend.
There are certainly no guarantees when starting a business. Whether it’s by yourself, with a co-worker or with a friend. There are some important things to assess before starting a business with anyone. And perhaps even more so with friends.
But after you do some assessing, think about the benefits. And consider strongly that you should start a business with friends. You don’t want to be older and thinking about what might’ve been or that you should’ve started the venture earlier.