In your entrepreneurship journey, one of the most important decisions to make would be: whether to have a business partner or not. There are pros and cons to both scenarios. Running a company solo has its benefits and pitfalls and so does running it with a business partner.
There are successful companies in the world which has been led by partners as well as by single men. Amazon, one of the largest public companies in the world is led by Jeff Bezos. Facebook, the largest social network in the world is led by Mark Zuckerberg. They are not being run with active partnerships and they seem to be doing very well.
Companies like Google, Dropbox, Apple, Microsoft and many more successful tech companies are run by two people. The co-founders compliment each other’s skills and that leads to certain benefits that you would miss running a company solo.
There is no right or wrong way when it comes to making a decision about partnership. What is important is that you find what’s right for you.
If you feel that running solo is what would work best for you, then that’s what you should do. If you want to have a business partner, then you should get one. But either way, you should know about the pros and cons of both to make an informed decision.
In this chapter, let me shed light on both the scenarios based on my entrepreneurial experience. Apart from my inputs, you should think long and hard about the right path to take.
Running A Business Solo
Running a company, all by yourself, for decades can become quite boring and frustrating. Many times, we are encountered with tough decisions in running and growing a company, and it is difficult to make decisions by ourselves.
Also, not all leaders have all the required leadership personality traits and it might be difficult to cover all the required leadership skills for running a successful company.
At the same time, running a business solo will help you make a lot of decisions fast and grow at a healthy rate. If you cannot get along with a partner, it will waste excessive time and energy in trying to get both founders on the same page. This will delay the growth in the company and it can also be morally draining to have difference of opinion or various matters.
Some people, instead of getting equal 50/50 business partners, they would hire junior employees and give them significant equity which is much more than ESOPs to get them to commit long term. This strategy has worked for companies like Facebook, where few of the early and important developers have as much equity as 4% of the company.
Having a Business Partner
If you can find someone who has the same goals as you and want to work long term to build a company, it is best to give it a try. If it doesn’t work for you, you can always close the partnership and do your business solo.
There are plenty of benefits to getting a business partner who can be the co-pilot for your journey. I have a business partner who owns 50% of my company and one of the biggest benefits for me is that he makes up where I lack.
I am an open-minded creative person and a workaholic. I am an introvert and I am not too good with sales and people management. It is hard for me to agree on things with people and I like to stay away from such responsibilities.
My co-founder is an extrovert. He can be great at sales, people management and client management. He takes care of closing clients and managing people’s productivity and output. I don’t do these things.
It’s not that I can never do sales or people management, it’s just that he can do a better job at it than me. He is also a realist and balances my idealism, which is very important for a healthy growth of a company.
I believe, I compliment my co-founder as well. I love spending long hours in front of my computer and doing accounting, revenue management, marketing automation and analyzing data. These are my core strengths.
I enjoy doing certain tasks and that leads me to working more on them. And because we focus on different things in the company, we get better at the things we focus on. My co-founder can also do the tasks I do, but he delegates these tasks to me because I am naturally drawn to do it, and better at it due to the experience.
If you decide to get a 50% partner or near 50% partner, make sure that you give it enough thought before going ahead with the decision. There are major pitfalls if you hire a wrong co-founder. Many companies have failed because of co-founder conflict and you should avoid such scenarios at all costs.
In the next chapter, we will talk about how to go about finding a business partner or co-founder.