Friendships give us a high and often the source of disappointment.
What is the purpose of friendship?
1) Networking – help each other with their abilities to do things hard to do alone.
2) Reassurance – helping to realize that we are not the only crazy and flawed one in this world.
3) To have fun – people we trust enough to drop the mask of seriousness and be silly with. It helps us with dealing with shame around the underwhelming sides of us.
4) A mirror that assists us in thinking about things we cannot solve ourselves quickly.
Some friends do not serve any of the above purposes; and may even be jealous of your success and wishing your failure secretly.
If you still have them in your orbit it is because you are not strong enough to move away from them, so they stay in your orbit and will eventually harm you.
What is the purpose of doing business?
If anyone tells you they are not in business to make money; they are lying. People who say “I am not in it for the money” often are the ones who are primarily in it for that reason.
So what makes a good business?
Need Vs Desire:
The key is to understand what you are selling to make money – things that people need, or things that people desire and get them addicted?
Stripclubs can make more money than bookshops.
Your source of money should be more important than making money in itself.
What do you measure as a key number:
What is your north stat tells you a lot about your business
Are you checking obsessively how much cash is accumulated?
Is your obsession employee happiness, or is it customers?
There is and can be only one north star.
If you are fulfilling a desire and have money as your north star – good luck to you!
Work-life balance is a term used by those who are in jobs they do not like.
If you work five days and do life for two days, how will you balance it ever?
If you feel the need to balance – quit and find something you will enjoy being part of your life.
So building friendship requires some skills; building and running businesses need even more skills.
And now you want to go and mix the two!!
- What should you consider when mixing friendships and business
Growth mindset :
If you or your friend thinks you are always right or feel ashamed to list down all the screw-ups you ever made and make it public to each other – do not get into the business.
Here are signs of a fixed mindset:
- If your self-esteem comes from being right.
- You feel bad every time your decision is proven wrong.
- If you ever try to hide a mistake that can directly affect another person.
- If you think all problems are caused by someone else and you cannot do anything about it.
- You have problems to apologize
- You do not have an inventory of mistakes you have made and lessons you have learned.
If you are having a fixed mindset and go into business with a friend that has a fixed mindset – it will be like the blind leading the blind.
Do not even start.
50-50 partnerships fail from the beginning because you never establish in case of conflict – which is bound to happen – who takes the final decision. There must be clear one person or a board that takes a final decision in case of conflict.
Not defining boundaries:
Establish which areas are managed by whom and how much autonomy is there, how much experimentation is ok.
You can scratch the car, but cannot wreak it – what happens if you do, etc.
How much risk is too much risk – each person has their level of risk. Rewards must be matched to the level of risks each partner takes.
Failure to contribute:
Business does not care how much work you put in yesterday, it just keeps asking what you have done for me lately? What happens if the friend stops contributing.
Incapacitation and death:
The story of Paul Allen overhearing Bill Gates considering cutting him off from his equity once paul got diagnosed with cancer is quite well known and it forever changed their friendship too. It is a real situation that can arise when friends get into the business. Consider these options upfront – agree on what will happen in such cases.
Relationship vs Money
There will always be situations where you will have to choose either relationship or money – what would you choose? Let it be clear from the beginning.
Change in life situations:
Your friend can no longer support you in business after a significant personal crisis – how will you separate? Will the person stay on as a consultant, will it be fast stop, how long will the period turn things around and work out a solution?
Business does not take off as planned:
Everything will take 2x or 4X more time than you planned, depending on how big the endeavor is. Teams will screw things up, that is just the nature of working with humans. What are the runways and tolerances each one has, and what happens in such situations?
Once all this is covered and you have worked out a plan and go together on a journey to uncover treasures, it can be fun.
There is nothing more satisfying than hunting down a big animal and sharing food around the fire with friends, making fun of the one that fell and could not get up and was crying like a baby! And no one is thinking of sending him on garden leave.
It can be a dangerous or powerful mix, depending on with whom and how you mix it with.
Good luck! & Bon voyage!