Ok, so this is my first post here and as I was confused about what to write, I decided to pick up this small piece I had tried to debate with a friend some day in the past. Both of us are into our own enterprises – he is a businessman and i am an entrepreneur (now i believe there is a difference between the two, but I wont touch upon it today).
Anyways we debated this topic for a while – do you start alone and hire employees or do you start with partners? Which way would you go?
Some points which came up.
In favor of partners
- Employees are mostly passive. Even if they are actively involved in the decision making in the beginning, they tend to become passive once they settle into their comfort zone. Partners always stay on their toes, because of the sense of ownership.
- You ‘cannot’ ask an employee to work on your project after 11PM or to send a mail at 2AM. You ‘don’t have to’ ask a partner to do that, he does it on his own.
- Employees take leaves. Partners do not 🙂 Instead they push you to work harder.
- Employees rely on you for decisions and will mostly support you with whatever you say. Partners will debate, disagree and mostly provide with a new train of thought and possibly a new angle of implementation too.
- Employees will always have to be paid, whether you earn or not. Partners take the cut when times are bad and get bonuses when you do good. But then again, good partners are the reason you do good.
In favor of employees
- Partners tend to debate a lot if the roles are not very well defined. Employees save time by implementing and testing first hand if it works or not.
- Employees make sure you maintain a balance between work and life. Workaholic partners will make sure it stays disturbed.
- Employees will have to be paid a fixed salary even when profits are good. Partners will bask in the extra profits themselves.
- Relieving an employee is way easier than asking a partner to leave (in case of poor performance)
- Employees are easy to find, partners (with a vision as dedicated as you yourself) almost impossible!
Don’t confuse it as a tie at 5-5 because some points carry differential weightage. My vote – in favor of a dedicated (founding or non-founding) partner rather than an employee, although at 1 point both become essentially and equally necessary.
P.S. I started my quest with 2 partners, who eventually left and now I have employees. So I guess I have seen both ends of the coin.
#image source: Bloomberg Businessweek
Sanchita Dutta
Against Partner
1. Conflict over and of ideas, ego, quantum of work, level of dedication, alternate source of income of the partner
2. Uneasiness to leave entire control which will be essential
3. Chances of getting defrauded big time to the extent of coming on to the road
4. Hard to get with same vision, thought process, priorities
Against employees
1. lack of sincereity, higher chances of fraud
2. Higher fixed costs, cost of rentals (with partner u can work from home), employee turnover costs
3. lack of continuity, need for continuous training with regd to work and promoter vision. need to re-do the full thing again if new employee comes
4. Urge to keep employee involved with “some work” when there is “no work” will result in anxiety, chances of mistakes, unnecessary or misdirected expansion etc
i would go for v few people as employees with partners only from blood relation. employ only when its absolutely inevitable.
regds
sanchita
http://www.gizmobhai.com (blog), http://www.indiacod.com (e-com)
Rajat
Exactly. Though i do not completely agree with the fraud part in case of partners – you can only start with a partner and share a vision if you trust the person and this trust is absolutely essential. Even in case of employees, trust is essential, though in that case you can always have signed agreements (thus reducing chances of fraud).
If partners understand each other’s strengths, the division and quantum of work is never an issue.
I agree with the employee training overheads but i wonder if business and blood relations should be mixed – it leads to bitterness.
asha chaudhry
hey rajat,
interesting post – just stumbled upon it by chance after a whole year!!!
quick q – do you still agree to all the 5 points for each or has your POV changed?!
my employee experience has been in ad agencies. and as an employee i did exactly opp of what your 5 points listed in favour of partners say!!!
even when the agency wasn’t paid by a huge client and there was an unforeseen money crunch – lots of us were okay by not being paid for a couple of months!!
Amar Pratap Singh
Sanchita ji,
Well explained, I am going through the pain point of below now for couple of months…. could not resist myself to comment with thanks.
4. Urge to keep employee involved with “some work” when there is “no work” will result in anxiety, chances of mistakes, unnecessary or misdirected expansion etc
Bst Regrds
Amar
Alok Rodinhood Kejriwal
Its like asking – should I have a friend OR a wife??!!!
Rajat
Hi Asha, glad you brought this up. My point of view has changed entirely 🙂
Today I am without a partner, but with employees who I don’t consider any less. Its about finding & hiring the right people, isn’t it? I discuss all decisions with my team and take their inputs before going ahead. They help me out at 11PM, and 2AM as well if there is a need. If we get good profits, I share it with them.
But I still believe for a first time entrepreneur who’s just starting out, the debate holds weight. It takes time for an entrepreneur to realize that both are equally important – a good partner and a solid team backing you. The question comes up when you are bootstrapping – do you invest in hiring people and just get on with the implementation OR do you start with a fellow who will help you fine tune the idea and share your profits.
Rajat
Hi Amar,
What is it that you are facing?
Rajat
Sir, actually the whole debate comes up only when you’re starting out (with little fund and little sense to realize the importance of both)
asha chaudhry
:)))))
would love to hear more about your journey in the last rajat.
do post, when you have a breather 🙂
Rajat
Definitely Asha..thanks for the encouragement 🙂