Series entrepreneur | Founder of bonapp.eco | Philanthropist | Chief father officer.
I have co-founded or invested in 21 companies during my professional career and I know firsthand that entrepreneurship is difficult. It’s an emotional rollercoaster, and I believe it’s much better to let people you know and trust ride along – people like your friends. In fact, I’ve never set up a business with a business partner unless they were friends. It has even become one of my golden rules. While working with good friends can seem complicated, I think it’s one of the best ways to approach running your business.
Friendship can be a solid foundation to build a business.
When you build a business with friends, you don’t start a relationship from scratch. You start with an established history and shared values, motivations and personal experiences. When the going gets tough, know that strong bonds will keep you united to weather the storm.
Knowing your business partners inside out, including their strengths and weaknesses, makes your business stronger and more agile. In addition, friends like to create a work environment that improves performance so that they can put in more effort to resolve conflicts peacefully.
In business, it’s even better to celebrate milestones when your partners happen to be your friends. In my companies, we celebrate our successes – launches, first clients, fundraising, etc. – even more because they are shared with friends. Simply put, happiness in business gets even sweeter when you experience it with people you love.
Successful businesses built by friends
There are many successful examples of entrepreneurs starting a business with friends. Ben Horowitz joined Netscape alongside Marc Andreessen and Jim Clark. Marc and Ben eventually had such a strong friendship and solid business partnership that they decided to launch the venture capital firm Andreessen Horowitz (a16z) in 2009. The company announced its largest fund to date earlier this year: $4.5 billion!
Nathan Blecharczyk met Joe Gebbia through Brian Chesky, and the three eventually became roommates and best friends. They worked in industrial design, and when a major industry conference arrived in San Francisco in 2007, they had an idea to solve the hotel room shortage. Thus Airbnb was born.
An iconic partnership between friends comes from Ben Cohen and Jerry Greenfield, co-founders of Ben & Jerry’s Ice Cream. The two entrepreneurs met in seventh grade, became best friends and spent their teenage years together. In 1978 they opened the first ice cream parlor in a renovated gas station. Since then, Ben & Jerry’s has become the top-rated ice cream brand in America, with sales of $936 million in 2021.
4 recommendations to make your partnership work
If you’re considering starting a business with a friend, keep these insights in mind.
1. Don’t choose your business partners just because they are your friends.
Starting a business with a friend is a decision that should not be dictated by friendship alone. The most important factor should be their professional and personal qualities. You need to make sure that the friends you bring into the company have the right talent, motivation, ambition and perseverance to perform in the role they are going to fill.
2. Team up with friends who bring additional skills into the business.
Whenever I start a new startup, I always surround myself with two kinds of friends: creatives who can bring ideas, inspiration, vision and inventiveness and engineers who can help build, operate and scale the company’s internal machinery. You need creative, inspiring friends and great technical minds who complement your skills so you can successfully turn your business ideas into reality.
3. Immediately determine everyone’s place in the company.
When running a business with friends, it’s crucial to work out the details in a clear way that everyone agrees on. when discussing everyone’s role and responsibilityAs well as the stock split, make sure the whole team shares their expectations so you can come to an agreement that satisfies everyone. Then put everything on paper. If something clearly hurts from the start, it can lead to frustration and tension between the founders. This could end up breaking your business – and your friendship. To build a healthy business, you need to make sure all your partners are happy with the way things are run.
Every time I start a new business with friends, I spend weeks learning about their expectations, assessing their role and commitment to the business, and reflecting on their percentage of equity accordingly. This means weighing their time, personal branding, technical knowledge, operational experience and network. There’s no magic formula for finding the perfect balance, but I use these questions to help make these decisions: How much time will each business partner devote to the company? What value does everyone have? What do we want the company to look like in five years? What is the corporate culture we want to build?
4. Trusting and empowering your friends is key.
Even best friends don’t agree on everything. There will be times when you and your partners will have different opinions about the business. This can make it difficult to decide on the best decision for the company. Remember to always listen to your business partners and trust their judgment. You brought them on board for a reason, and maybe they have a better idea of the situation than you do. As long as you communicate openly, you can come to a decision that everyone supports.
I believe that friends are not only good business partners; they are great business partners! As long as you choose them based on their talent and level of commitment, you can create a business built on trust and honesty.