8 tips to a successful “Friendtrepreneurship” [Are best friends great cofounders?]

“Friendtrepreneur” [Pronounced: friend-truh-preh-nur]

Noun: a person who starts a business, taking on financial and emotional risk to do so, with a friend

The most frequent question I am asked by friends, family, ex-bosses and aunts, “Doesn’t working with friends affect your friendship?”

The answer is yes, it most certainly does.

So does that mean you should avoid Friendtrepreneurship?

Not at all. That would be something (though not exactly and I repeat “not exactly”) like not marrying the girl you really love because you risk losing what you have with her.

Honestly, the question of whether good friends make good co-founders is a big fat grey area. And the answer, like the answer to most of life’s amazing questions is – It depends. There is no definite yes and there is no definite no.

Having run Gozoop with 2 of my closest friends – Ahmed and Dushyant – for 4 years now, I can safely say that the journey together has been amazing. In fact, I am closer to them now than I ever was. Does that mean we haven’t had differences and arguments? Of course not.

Truth is that despite it’s inherent advantages, partnering with friends throws in it’s own challenges – all solvable though.

Here are a few things you would want to consider / adopt while working with friends so that you are well positioned to build a good business and maintain your awesome friendship at the same time:

Choose a good business partner, not just a good friend

A good partnership takes much more than a good friendship. The comfort that comes with working with a friend helps resolve many issues but not all.

Ask your self the following questions – Does your friend share the same business vision and values? Do your strengths and weaknesses compliment each other? Does you friend have the basic traits you would look for in a business partner: honesty, reliability, commitment, adaptability, etc.?

Communicate – no matter how uncomfortable a conversation it maybe

It’s going to happen. You are going to make excuses to avoid an important conversation because you don’t want to hurt your friendship. “I will bring it up if he does it one more time” – is not the best way to deal with a situation that can affect your business. Building a good business takes commitment and as far as friendtrepreneurs understand that fully, an honest conversation will not jeopardize the friendship.

Write things down

It’s always a good idea to write down all decisions (big and small), targets, deadlines, etc. in an email and share it with your partners. As friends, things can get a bit casual sometimes. Writing things down ensures that all of you are committed to the decisions in the same manner and this will reduce misconceptions that could arise in the future.

Formalize your business relationship

For the sake of your friendship if nothing else, formalize your business relationship. Whether it’s a Partnership deed or a Shareholder’s Agreement, formalizing business terms greatly reduces the opportunity for misunderstandings and loss of trust in the future. In fact this is insurance for your friendship even if your partnership fails.

Pre discuss all things money

When and how will profits be distributed? What will be the monthly withdrawals? What if one partner needs a loan? Which expenses are reimbursable from the company? What if one partner wants to sell to a potential buyer while the other wants to wait and sell at a higher valuation?

Different founders come from different places financially and their monetary needs and motivations could differ. It’s Best to pre discuss all money matters.

Don’t make it all Professional

Working with friends has a lot of inherent benefits. To be strictly professional would be an unfortunate waste of these benefits.

Recently I was having a tough day. I went to Ahmed’s cabin and started venting. He shut my laptop and took me took me to this boutique cafe (I forgot the name) for coffee and croissants. We spoke about women, surfing, travelling, Ahmed’s younger brother Hasan and a few other things that make us happy. Post that I was all set to work again.

Make all important decisions over Ice cream

Whilst making big decisions such as Shareholder Agreement clauses (and sometimes even things like where the annual trip should be) there are bound to be uncomfortable conversations, disagreements, etc. My sincere suggestion to all friendtrepreneurs is make all-important decisions over ice cream. No discussion ends badly in the presence of Mint Chocolate Chip topped with Fudge.

At Gozoop, we have all our meetings with our lawyer over ice cream. It’s tradition.

Don’t mix Personal with Professional 

It’s the unique ability to be comfortable enough to argue business issues and still be able to pull each other’s legs at the end of the day that makes friendtrepreneurship work. This is a tough one no doubt. But sometimes you got to put everything aside and find time to just be friends.

Disclaimer: Gozoop happened quite naturally for us. Back when we started we didn’t know better and just went with the flow. Some of the points I have listed have been adopted by us only recently. Looking back, we were really lucky. And though I wish all you friendtrepreneurs more luck, I humbly suggest you to adopt these points early in.

What are your thoughts?

[Follow me on Twitter @RohanBhansali99]

This article was first published on Pluggd.in