Learn from My Mistakes: How to Choose the Right Business Partner

My career in startups started in high school, when I partnered with a handful of peers to build a user-submitted college admission statistics portal. A mouthful, I know.

My business partners (at the time) were among the smartest people I knew, and we believed we all had enough ambition and drive to build a million dollar company. When we graduated high school, we were still committed to the growing our startup and worked remotely from our respective dorm rooms.

We folded the business before sophomore year began.

Admittedly, we were not prepared to build a real company together. College was a new chapter in our lives and neither of us was ready to make the necessary sacrifices it took to run a startup.

A Fresh Attempt

I still had an itch that needed scratching. I so desperately wanted to start a new business that I partnered with anyone that offered a compelling idea. Immediately after forming a new partnership, I toiled away working on the framework for starting up and launching. Sadly, those relationships ended almost as quickly as they began. Days after deciding to partner up with a new classmate at university, I realized that none of my peers wanted to do actual work.

According to App Sumo, most people suffer from wantpreneur syndrome. I, on the other hand, was determined to build a business I could be proud of.

My earlier failed attempts at starting up taught me valuable lessons about teamwork, which made it easy for me to come up with a short-list of criteria to look for in a new business partner:

• Available (such that they were able to expense hours and hours of their time towards the project)
• Eager (excited they would work with me)
• Experienced (enough that they knew a thing or two about business)

In the summer of 2009, I bumped into Fan Bi, an Australian solopreneur looking to import a proven business model to the U.S. The idea was tailored menswear. With no other commitments, work experience at PricewaterhouseCoopers, and a streamlined supply chain, I was convinced he was the real deal…. Until I probed him about his online marketing strategy.

To my surprise, he knew nothing about SEO or public relations. Of course, neither did I. But this was the same time I came across the HubSpot blog and learned everything there was to know about inbound marketing. He was convinced I was the right guy to head up marketing; I was sold because he was now eager to work with me.

We were an unlikely pair that decided to make it work. Why? Because we each had unique skills the other didn’t. Fan knew how to manage operations and recruit talent that would build out our website and the subsequent showroom experience. I had an interest in online marketing and was ready to do anything and everything to get the word out about our business to target customers.

…and it worked. In 2012, Inc. Magazine named us two of the top entrepreneurs under the age of 30.

Photos courtesy of Fan Bi and Danny Wong. Used with permission.

Important Takeaways

Before binding yourself to a new business partner, here are a few tips to consider during your search so you don’t make the same mistakes I did:

1. Do not blindly select the first person next to you. Make a conscious effort to weed out the wantpreneurs.
2. Hire “help” first. Bi didn’t officially bring me on-board as his business partner until after we began working together. He decided to hire me as the firm’s “Marketing Lead” and later realized we worked better as partners.
3. Source advisers. Before you make a weighty decision such as partnering with someone, get a third party to evaluate that person’s candidacy.
4. Get them vested. Never give shares outright. Instead, make sure your partner is in it for the long-haul. Set up an agreeable vesting schedule for stock options so you protect you and your business from people looking for a quick payday.
5. Remember to challenge them. The best business partners are those that will act in the best interests of the company in dire situations. Put them through a few scenarios that’ll demonstrate their capabilities and courage so you know you’re partnering with the right person.

When In Doubt

Of course, you don’t always need a business partner. At my current startup, Shareaholic, our Founder and CEO, Jay Meattle, knew how to hire the right people to help build the business. He never had to bring on a co-founder. More recently, Meattle hired Rob Balazy (formerly of Lycos, Inform Technologies and Applied Semantics) and Christopher Gillett (formerly of Swoop, Visible Measures and Compete) to join the management team as we grow, but remains the sole founder of Shareaholic.

In some cases, you’re better off managing your business as the sole proprietor. Indeed, if you do decide to bring on a business partner, make sure that person fits (most of) the above criteria.

What are your experiences finding and selecting business partners?

via searchenginejournel