I was reading something recently that dealt with the issue of partners, tending to take a rather negative view of the idea, whereas I tend to take a much more positive view of the arrangement. This got me thinking about what it was that I liked about partnerships for startups, and in particular for bootstrapping.
The big differentiation between bootstrapping and other startups is the investment required, both in time and money. Although bootstrapping requires a serious, ongoing commitment, it is not an all or nothing approach involving betting the proverbial farm on success. Bootstrapping would often mean that other sources of income are required (such as a steady job) during the startup phase. Bootstrapping also means in many cases, a limit to how much time can be dedicated per week or as someone once said a startup need only take as much time as a hobby. Despite this, I see the following main benefits of a partnership:
- By pooling your time, you can reduce lead times in getting your product to market
- Decisions need not be agonised over and a consensus position can often be reached quite quickly
- Partners normally (and perhaps should) bring a range of expertise to the venture. One person might be specialised in software development, another in business development and another in marketing. As long as there is a common vision, there is a much greater likelihood of success
- A recognition that the contribution made by each person will vary, depending on the stage of the product. Some people favour monitoring and measuring these inputs and apportioning equity accordingly, but I disagree. As long as everyone shows a willingness to contribute and make themselves available at all times, that is enough.
- The business maintains momentum by everyone constantly egging each other on to complete on time or challenge each other to achieve more in a shorter period of time. Procrastination, the enemy of productivity becomes almost impossible.
- Never have to hire. With 2 or more partners and the right, scalable, business model, you may never need to hire anyone. Imagine that; no contracts, no policies, no retention plans, no “us-them” and potentially, no office space !
- Never have to seek funding. In a partnership, you have x times many sources to emergency cash to see you through the tough times, (though of course as a good boostrapper, you should aim to fund yourself through strong cash flow)
So what makes a partnership work ?
- High levels of trust
- A common vision of the product, which develops over time though constant communication, but always remains focused on the shared objectives
- Free exchange of opinions and ideas and healthy debate over product direction
- Frequent communication, “poking” someone when something is coming on a little slow
- Responsiveness to requests and comments within a reasonable time frame
- An inherent acceptance of equal ownership of the product/idea
- A relationship that extends beyond a normal workplace colleague relationship. If you are not socializing with you partners, then you probably will be soon. This all goes to the heart of understanding your partners; their strengths and weaknesses and how best to get the most out of each other.
- Your partners are of a similar age/experience level. This will mean that there is a more even balance of power in the partnership and debates/decisions will more likely represent the consensus view rather than the more experienced partner.