{"id":5455,"date":"2013-09-10T09:00:19","date_gmt":"2013-09-10T13:00:19","guid":{"rendered":"http:\/\/thewww.wework.com\/magazine\/?p=2230"},"modified":"2020-03-30T19:12:26","modified_gmt":"2020-03-30T23:12:26","slug":"pros-cons-going-business-buddy","status":"publish","type":"post","link":"https:\/\/www.wework.com\/ideas\/professional-development\/management-leadership\/pros-cons-going-business-buddy","title":{"rendered":"The pros and cons of going into business with a buddy"},"content":{"rendered":"

I\u2019ve built five companies in my startup career, four of which I started with close friends. It\u2019s quite common to build a company with a close friend: you get together, think of a cool idea, and decide to get started. Why not, right?\u00a0While it can be extremely fun to start up with someone you\u2019re close to, it\u2019s not without disadvantages.<\/p>\n

So before you and your friend get started, take the time to analyze the good, the bad,\u00a0and<\/em>\u00a0the ugly side of starting a company with a friend.<\/p>\n

The good<\/h3>\n

1. You have a friend in the trenches.<\/strong>\u00a0Entrepreneurship can be lonely.\u00a0My friends who work 9-5 during the day tend to party hard at night. I can\u2019t keep up with that lifestyle as a 24\/7 entrepreneur. When we do hang out, I just want to talk about ways to improve my startup \u2014 whereas they want to talk about anything\u00a0but<\/em>\u00a0work.\u00a0That\u2019s why it\u2019s so fun to start a company\u00a0with a friend. You have someone you can confide in and relate to, at times when not everyone understands.<\/p>\n

2. Your friendship sets the tone for culture.<\/strong>\u00a0Good company culture keeps morale high, attracts top talent, and keeps employees loyal. My co-founder and I often conduct interviews together so that the prospect sees our dynamic interactions and feels how fun it is to work on our team. Because we\u2019re friends, we don\u2019t hesitate to throw a get-together at my place or a poker night at my co-founder\u2019s place.<\/p>\n

3. You understand each other\u2019s strengths and weaknesses.<\/strong>\u00a0It was easy for my friend and I to assign roles and responsibilities, because we knew each other so well. He was emotionally stable, organized, and focused on the big picture, so it made sense for him to be CEO. I was the hustler with the do-whatever-it-takes attitude, so it made sense for me to lead the CMO position.<\/p>\n

The bad<\/h3>\n

1. You have similar networks.<\/strong>\u00a0Friends usually hang out with the same people and will thus have the same network. This is bad because startups can succeed or fail based on who you know and what introductions you can get. My co-founder and I make a strong effort to go to events (he goes to investor-related events while I go to client-related events) in order to expand our networks.<\/p>\n

2. It\u2019s difficult to take orders from a friend.<\/strong>\u00a0People are accustomed to taking orders from their boss \u2014 not their friends. This can become very unpleasant, especially if you\u2019re not communicating tasks in the way that your co-founder likes to receive them. To keep my co-founder and I accountable, every week we get together with the whole team and report our accomplishments and issues. This eliminates the need to give orders throughout the week.<\/p>\n

3. It\u2019s easy to take advantage of the friendship.<\/strong>\u00a0Because my co-founder is my friend, he feels shy about pressuring me to work harder, which can become a vicious cycle: I slack because I feel comfortable around my friend and my friend doesn\u2019t pressure me to work harder because he doesn\u2019t want to mess up the friendship.<\/p>\n

4. You don\u2019t want to hurt each other\u2019s feelings.<\/strong>\u00a0There\u2019s no easy way to do it, but if your co-founder is slacking or missing milestones, then you have to call him out. A founding team that is brutally honest with each other and that can respect feedback has a much greater chance at success.<\/p>\n

The ugly<\/h3>\n

1. The stress of failure is compounded by your friendship.<\/strong>\u00a0Startups are full of stress, failures, and demoralizing moments. In a previous company, my co-founder failed to raise funding within the given timeframe. It was a very tense time because cash was extremely low and the company would fail if we didn\u2019t raise capital immediately. Similarly, I\u2019ve had moments when I\u2019ve gone through a dry spell closing deals.\u00a0It\u2019s hard to console a friend when your business\u2019 future is at risk.<\/p>\n

2. Failed businesses can lead to broken friendships, and vice-versa.<\/strong>\u00a0I have seen several failed startups lead to broken friendships. Many times, the founders blame each other for the failure. In other cases, problems that start as personal can end up affecting \u2014 or even destroying \u2014 the business side.\u00a0My failed startups with friends have actually led to stronger friendships; it\u2019s all about the level of respect you have for each other. But if you don\u2019t communicate this from the start, it can easily go the other way.<\/p>\n

5 Questions to ask before starting up with a friend<\/h3>\n

Would I do this again? Absolutely \u2014 though I always proceed with caution. Here\u2019s what I look for in a friend before I ask him to join my team:<\/p>\n

    \n
  1. Do we have complementary skills?<\/li>\n
  2. Do we have different networks?<\/li>\n
  3. Do I trust and respect his work ethic?<\/li>\n
  4. Do I trust and respect his decision-making abilities?<\/li>\n
  5. Does he have previous startup experience?<\/li>\n<\/ol>\n

    Don\u2019t start a company with a friend just because you think it\u2019ll be fun to work together. \u00a0Start a company because you believe in what you\u2019re doing \u2014 and because you each bring a unique skill set and network to the table, improving your chance of success.<\/p>\n

    \n

    Jun Loayza is the Chief Marketing Officer of\u00a0VoiceBunny<\/a>\u00a0and\u00a0Voice123<\/a>. He is also an accomplished lifestyle entrepreneur and the creator of the\u00a0Drop Ship Domination System<\/a>. In his entrepreneurial experience, Jun has sold 2 internet companies, raised over $1 Million in Angel funding, and lead social media technology campaigns for Sephora, Whole Foods Market, Levi\u2019s, LG, and Activision.<\/em><\/p>\n

    The Young Entrepreneur Council (YEC)<\/a>\u00a0is an invite-only organization comprised of the world\u2019s most promising young entrepreneurs. In partnership with Citi, the YEC recently launched#StartupLab<\/a>, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses via live video chats, an expert content library and email lessons.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

    I\u2019ve built five companies in my startup career, four of which I started with close friends. It\u2019s quite common to build a company with a close friend: you get together, think of a cool idea, and decide to get started. Why not, right?\u00a0While it can be extremely fun to start up with someone you\u2019re close […]<\/p>\n","protected":false},"author":884,"featured_media":33528,"comment_status":"open","ping_status":"open","sticky":false,"template":"template-single-archived.blade.php","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[43902,43909],"tags":[],"class_list":["post-5455","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-professional-development","category-management-leadership"],"acf":[],"yoast_head":"\nThe pros and cons of starting a business with your friend<\/title>\n<meta name=\"description\" content=\"Jun Loayza shares the best and worst things that happen when you start a company with a friend.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" 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