Partnerships: Business goals are not equal to personal goals
One would think that a goal of a business is simple: Serve customers and, hopefully, make money to allow you to continue doing that. It’s true, business goals can be that simple. However, business goals are not the same as personal goals by the business founders.
Individual goals can vary wildly from person to person in the same business. For instance, Bill Gates did not have the same personal goals as Steve Jobs. Heck, Steve Wozniak didn’t have the same goals as Steve Jobs. And there in lies the topic of this post, goals of partnerships (though I think it can apply to anyone working as employer/employee or even peers).
When John and I started this business, it sorta happened by accident. We didn’t have long term goals other than “Let’s start a business.” The furthest long term thinking we did before the first 360|Flex was naming the company. We chose 360|Conferences because of the thinking, “If we want to do another show besides 360|Flex, we probably should have a company name that supports that.” We figured the “360|x” moniker would be cute and allow us unlimited growth. That was it. Discussion over.
Fast forward in jumps of several months. You’ll see that discussions start to take place. Ideas start to be shared that don’t resonate with both sides of the party. Case in point: According to John, we’re not a business since it doesn’t pay us full time. Whereas I think a business is something that provides a service or a product in exchange for money.
So what? That’s just semantics and doesn’t really matter, right? But it does, if you fast forward a few more months. Now, we’re discussing being part-time vs full-time. I’m think we were about a year into the biz when this discussion happened. My goal, which I assumed was “our” goal, was to work the biz part time until it paid us enough to sorta make the jump to full time. John’s goal, which he assumed was “our” goal, was to go full time as soon as possible. If you look back at our earlier goal, it’s seems obvious that we’d have this difference of opinion. Thing was though, it wasn’t obvious at the time.
Fast forward again and again, over the few years the business has been in place, we’ve had many such discussions. Some were quirky revelations while others were heated discussions about how the other was flat out wrong. Thing is though, these discussions and differences get old, quick.
John bought us books on partnership. The one I got was The Partnership Charter
My advice would be to talk about concepts and ideas in regards to goals in business and life. I think too many potential partners spend their time talking about ideas on what the startup should produce vs how they intend to produce the startup.
April 15th, 2009 at 7:29 pm
Actually I also think a business is an entity that does produce a good or a service. I don't think a business is a success until it pays it's employees. Profit is easy when the workforce isn't paid. Profit is harder when you have to pay people.
Just forming a company, doing something, and never paying yourself for your effort, or your workers, or really ever standing on your (the businesses) own two feet, isn't a success to me.
When i think successful business I think; 1. pays founders/employees 2. makes money 3. exists without training wheels or gutter bumpers (for those who're into bowling). Not doing 1, rules out 3. Just doing 2 is not a successful business in my book.
April 15th, 2009 at 7:48 pm
Business Success doesn't have to be defined in terms of profit and/or owner's draw; although presumably that is something you'll want to consider at some point.
To address Tom's final point… if you don't have any idea what you want from yourselves or what you want from owning a business, I'd have recommended figuring that out before you try to start a business or enter into a partnership.
I'm reading 7 habits of highly effective people, and one of the points in there is to begin with the end in mind. Visualize your end point before you start and it is easier to validate your decisions against that end point.
April 15th, 2009 at 7:56 pm
I don't think those are the only factors of success, but I don't believe any business is a success if those (and maybe other) factors aren't met. Even non profits pay their people, and I've never met a startup who's founders were unpaid interns of their startup LOL. deferring payment, sure, yeah I can buy that.
You're right.I think in future efforts jumping in headfirst doesn't make sense. Ah the lessons learned :)
April 15th, 2009 at 8:35 pm
is there a "i hear you bro" button somewhere around here that i can click?
if you never start a company, you never learn that this is even important. it's just abstract, like something that people say you should do but it never really reaches above the level of the stuff that has to be done. so yeah, working in a partnership or with cofounders is hard, but i don't believe there's a way to learn how to do it well other than just trying.
April 16th, 2009 at 1:15 am
"I hear you bro" button. I love it!
That's the thing about partnerships. They're not really written about much, so I'm going to try to write more about my experiences. The biggest question I had for so long is: Do all partners argue this much?
I'm guessing perhaps some do. Which is good, since that means we're "normal". LOL
April 16th, 2009 at 2:36 am
I must be the odd egg out.
Everyone wants to partner w/ me, and I used to get 1-2 requests a year. "Come build this for us and we'll give you a piece of the pie"
I had serious conversations with three different people about it on 3 completely different business ideas. And we attacked it from every angle, including discussing what to do when one of us leaves or what would happen when the company goes under, how to define budgets, who owns what percentage, etc.. etc..
Nothing ever came to fruition for various reasons, partially because we had these talks and worked things out and realized it wasn't a good fit.
Am I just wired differently?
Nowdays, when someone asks me to "partner" with them on their next great business idea i ask them to send me their business plan before I'll talk to them. I never hear from most of them again.
April 16th, 2009 at 3:42 am
Yes, you are the odd egg out. LOL No, what I think you have that at least in the case of John and I is experience. We've never really been in a business all our own. Sure, we've consulted but that doesn't really count.
Plus, when you go into a partnership with friends, like John and I did, you think you already know things. "I know him. What he wants, how he thinks, etc."
I know many people say that going into business with friends is bad. However, John and I are of the belief that our friendship has carried us this far. We may fight and we may disagree, but we're still friends.
April 16th, 2009 at 12:48 pm
It might make for an interesting discussion as to why consulting doesn't count. ;)
The one time I had the discussion with a friend, top of our list of "why not" was "we'll end up hating each other."
It may also help my "odd egg outness" that I've worked for a lot of small companies who had partner problems and my client has had to buy out a partner or two and/or the company went under.
April 16th, 2009 at 1:59 pm
That would be interesting! I've never consulting on the scale or level of success Dot-Comit has, but even in regards to me, "Consulting doesn't count" rings kinda true. I dunno why though.
April 16th, 2009 at 5:17 pm
Well, when I said consulting didn't count, I strictly meant in regards to John and I. We were more glorified employees of contracting firms. We didn't find our own clients or projects. In other words, we had pimps. :)
You and Jesse Warden qualify as consulting businesses that "count". You guys are your own shop.
I hope that clears things up. :)
April 16th, 2009 at 4:39 am
Yeah I agree with Tom on that one. I think friends going into business overlook a lot. I also think alot of people forego business plans and such so asking, shuts that door.
Plus I too would be weary if someone came up and asked me to be partner in something, I think it is more organic than that.
April 16th, 2009 at 12:51 pm
I've had a lot of doosies. My favorite is the guy who told me 'we' didn't need a business plan because it would take too long and we need to get started in development.
"Development of what?" Asks me.
"Our Product" says he.
"Which will be?" says I.
"It will be driven by our customers" says he.
"And who are they" asks I
etc.. etc.. you get the idea.
Another was shocked I had the audacity to ask because he felt it wasn't my place to review such documents.
April 16th, 2009 at 1:58 pm
Yikes ok 2 good examples of bad ju ju. I see the value in a biz plan, though I don't think it helps to draft them before you do anything. I do think it's a case by case type of deal though.
I think biz plans make sense to help solidify what you want to do. I'm thinking if Tom and I go looking for SBA money, we'll need one, so we'll make one. I also think they're a good exercise, and one that Tom and I should do because as you say, it answers a lot of questions. Most of which Tom and I haven't asked or answered LOL
April 16th, 2009 at 2:12 pm
I'm always a fan of planning before acting. I've heard it said that one minute in planning saves ten in execution.
Perhaps you don't need to write a formal business plan for everything you do; but "just starting" is often a recipe for disaster.
And yes, I think you two would benefit from going through the business planning process. Getting formal company goals down on paper that you can both get behind and agree upon will bring fantastic clarity.