Any resources for working with other partners in a startup?

November 11, 2006 11:47 AM

How much should I expect out of partners from a startup, in regards to time and commitment? I am the type who will spend every waking hour researching, working, making contacts, etc. I do not believe my partners are making the same time commitment. Any advice, books or resources on dealing with interpersonal relationships when a startup is in the early phases?

I am the de facto leader of the partnership. It was my idea and I seem to be guiding 90% of where things are going. This is fine, I acknowledge this. As I'm currently working (as are my partners) at a separate, unrelated job, the only time we have to work is after hours and on the weekend. I have not been going out, partying or keeping up with the once vibrant social life I had. This is fine, I can stay home on a the weekends and work until midnight.

My partners do not share this philosophy and if it were not for their extensive contacts (this is in a creative industry) and high intelligence I would dump them for someone else. This is not to say they don't have a work ethic but don't seem to have that same drive I do. They're a bit more of an artistic disposition and see work as, well work. This is not to say that I am a workaholic, once the startup gets going I do plan to take up my going out, shopping and cavorting like I used to. If I had my way I'd lock all of us in a hotel room for two weeks until we hammered out all the financing, the business structure and all the other details I learned in business school.

Any general advice? I guess my main problem is that I expected them to work and give up their social lives (that is social activities which do not at least tangentially relate to what we are doing) until the startup got to a point where money is being generated. I have all these business skills but not the ability to communicate the importance that they work with me ("Oh we can do that later in the week," they will say to something I do not know how to stress is important they all be there).

If I went to them and told them that I'm working about twice as much as both of them combined it would be condescending and patronizing. I'm more familiar with i-banker types who would skip Christmas to work. I'm not that crazy, but it is aggravating when I want to go over things on a Friday night and they'd rather go to whatever they deem important (dinners with friends they only see once a year are okay, until you realize they have 365 friends).

We are sitting down with a lawyer and I do not want ownership and control issues to become a big issue. They have acquiesced to all demands about amount each holds in a partnership without really questioning it, this disturbs me as I do not want there to be conflict later on if I make a deal I think is fair but they see as lopsided. I want a frank and open discussion. How do I go about this? With other businessmen I have dealt with this is always very impersonal and dealt with in a very professional manner. From my conversations I believe they have a very "money is a taboo topic" (which is why I am doing most of the financing and managerial work).

I am also very used to working with other sharks and instinctively am operating under a veil of paranoia and backstabbing (which is why, to be honest, I am wanting to leave that world). I am afraid that I will do something and it will come off as such, even though I'm very self-aware generally and try to prevent such instances from happening.

So finance type and artists working together on a startup. How do I not make it a cluster fuck? I should mention that none of us have contributed any appreciable capital (nothing over $1000), and we are seeking outside financing -- no one is a rich kid that is financing this. I need to not come off as an asshole and I need them to take things a bit more seriously. Any resources at all would be magnificent. Please excuse any details left out as me wanting to retain a bit of anonymity and instead look at the larger picture.

posted by anonymous to work & money (16 comments total)

Have you and your partners done any specification documents at all? If you have not, I cannot imagine how you expect this business to fly or to gather outside funding.

Business requirements doc
Design Specification doc
Functional Specification doc
Feasibility doc
Schedule

If you haven't hammered out the above with your partners (and they will be contributing heavily to the writing of all but the business requirement document) you need to. Google up the terms, there's plenty of sites which will explain what each document is and what should be in it. Everyone needs to buy into what's written in them, and once the development schedule is set then everyone needs to try to meet them.

What you see as play and wasted time may be part of the creative process or it may just be wasted time. Speaking as a creative, a lack of a deadline tends to mean I'm thinking of something else but without a written schedule, how does anyone know what to do when?

You need to step out of the hall monitor role. Not your job. Getting the specs nailed into paper? Your job: not to write them alone but to push to get them written. Then do your real job: get the financing.
posted by jamaro at 12:16 PM on November 11, 2006

and see work as, well work

I expected them to work and give up their social lives

and if it were not for their extensive contacts (this is in a creative industry) and high intelligence I would dump them for someone else

and they'd rather go to whatever they deem important

Are you paying them right now or waiting until the startup makes any money? If I was on your pet project, working for nothing while already having a 40 hour a week job, and you treated me like you really didn't want me there, I'd tell you get stuffed too if I had plans on a Friday night.

Would you want to work for you?
posted by pieoverdone at 12:29 PM on November 11, 2006

Well, it sounds like you have at least a couple conceptually seperate issues, specifically 1) how do you kick the asses of the other partners and make them take this start-up more seriously, and 2) how do you combine the fact that you're the business expert & need to have authority to do deals, with the fact that they might hypothetically feel screwed over by the terms of those deals at some future date.

As to #1: I think you kind of know, deep down inside, that you're not going to change your friends' approach to this project. You, the B-school type, need to do a cost-benefit analysis and figure out if it's worth having these folks around if their only contributions are their contacts and intermittent creative input, while you do the rest of the work. It sounds like that is your only viable choice other than dumping them and/or getting some other folks onboard with the project. If the project can go forward with them dicking around all the time and giving you an important phone number or introduction every now and then, then you should just realize that your unique roll in this process is to bring these two worlds together, and as such you'll have a uniquely high amount of work to do along the way. If you really can't do it all yourself, and you simply can't swap any of them out for someone more business-savvy and serious, then you might need to introduce some b-school friends into the partnership to mitigate the overload. But quit focusing on trying to make your artist friends shoulder that particular stuff.

As to #2: having said everything about #1 above, it seems like you can kind of mitigate the crappiness of that situation by getting a larger share of profits and/or managerial control of the resulting partnership. As of now, your artist friends probably have no idea about this side of the business, though you are wise to be concerned that they may feel used at some point in the future if you do deals that divide the pie less than perfectly evenly. I think the best cure for this is to be upfront about what you intend to do and what you feel you deserve. Describe the various possibilities facilitated by the ownership/control arrangement they have already agreed to -- the kind of deals it enables you to make, the range of profit distribution it facilitates. Make sure that they're really comfortable with these potential outcomes. Of course, you should also reassure them that you'll always be making your best effort for the partnership to succeed. Fundamentally, you have to have a sit down and explain the way start up businesses work, even if it comes off as a bit "condescending and patronizing." If you find it difficult to communicate your particular concerns, at least start the conversation by communicating that you are concerned, and then go into specific reasons for that. If these partners can't even sit down for that conversation... see point 1, above.
posted by rkent at 12:29 PM on November 11, 2006

How important are they to the business? Can you do this with out them? Can you do this if they are acting as consultants rather than equity holders?

I'd suggest attempting to make it clear to them that 1/3 of nothing is still nothing and unless they help in this phase, they can't be included in the rewards down the track. This phase is what the owners/partners get paid for. You can always employ people with contacts.

Your idea of locking them in a rooom with you for a fixed amount of time is a valid one. You can sell it as being a way of getting a lot of the boring stuff out of the way and that will free up their time down the track. Tell them that if they can't make time for the planning now, then there is no room for them in the management team. You have to be a bastard at this point.
posted by dantodd at 12:29 PM on November 11, 2006

If you and your partners are not on the same sheet of music with regard to just about everything - at least 95% of everything - your partnership is doomed.

Sounds like you're well below the 95% threshold. You need to cordially tell your partners that you don't think this will work out, and go and find new partners (or if the business depends on them, you need to find a new business).

It's almost certain that you won't take this advice. You're already invested in the project, you don't want to lose the work you've put in so far, and interpersonal conflict is so draining. So you'll try to sweep it under the rug, make it work.

It won't. Come back and read this comment when you finally decide to give up on your partners.
posted by jellicle at 12:46 PM on November 11, 2006

I agree with Jellicle that there may be a compatibility issue here. But you might be able to work through it, if you can communicate well.

The thing to do is figure out what each of you is contributing in terms of time, money, outside connections, deal-making, etc, then value that, and create the partnership division accordingly. If you can agree to all that on paper, you're set. If not, well then, you're not set.
posted by alms at 1:57 PM on November 11, 2006

Your other two partners may be thinking along the lines of "two many cooks in the kitchen". They see you all over everything, and I can understand why they would back off. Maybe the three of you should sit down and allocate responsibilities, which will keep you from taking over.
posted by dropkick at 2:27 PM on November 11, 2006

I can't help but think of territorial pissing. You've marked your territory over every aspect of the business and the other two no longer feel like it's their baby. It's your baby now and they're just an ancillary part of it.

Something to think about anyway.
posted by dropkick at 2:34 PM on November 11, 2006

It strikes me as possible that you may think it's obvious how much work needs to be done, and how much you're in fact doing, but they may be rather clueless about it. Make sure they know exactly how many hours you're putting into this, and what nights and fun activities you're giving up. Make up a timesheet or something. Seriously, they may just not get it, and sometimes things need to be spelled out, quantitatively.

This is an important part of the communication thing.

If they aren't interested in working as much as you are, then that may make it more sensible, to them, that you own a bigger share.

There's a chance that they may not believe that it is necessary to work as much as you are; if you know that, in fact, it is necessary, then you may face another challenge in convincing them of that.
posted by amtho at 3:16 PM on November 11, 2006

Also, go watch Startup.com and then see if you can hit govworks.com.
posted by pieoverdone at 3:34 PM on November 11, 2006

Noam Wasserman's blog Founder Frustrations is a good general guide to these issues.

Have you already agreed on an equity split? If not, I would do so ASAP and get it in writing. This way you can hammer out figures that are proportional to the amount of work they're putting in. Also get it in writing that you have the authority to disinvite them if they are not doing their part.

I have had similar issues several times, and in each case ended up firing the partners. My experience would have been a whole lot easier if I had gotten rid of them earlier on; the situation is not going to change, especially when the novelty of the startup idea wears off and you begin to encounter serious practical hurdles.

A lot of people want to be on a startup and do a minimum of work to stay on, just so that if it happens to become successful, they're already members and can profit. Don't let them leech off your effort.
posted by lunchbox at 3:55 PM on November 11, 2006

Jumping on the bandwagon here, but my experience is that whatever your expectations are, it will be no more than half of that. Also agree that you will never change the others for the long run. You may get intermittent runs at work, but ultimately, they will not pull their load unless the percentages are skewed to reflect the work input.

But, if their contacts are good and their creativity good, it may be worth having them as partners.
posted by JohnnyGunn at 4:11 PM on November 11, 2006

I just want to make it clear that contribution does not mean equal effort or wrok time. It can be an idea or a contact that makes the whole thing work.
posted by JohnnyGunn at 4:12 PM on November 11, 2006

The main problem here to me seems to be that you are afraid to confront your friends about doing the work they need to do. I don't understand why you can't have a talk about finances or business structure. Are they actively refusing to have this meeting, what is stopping it from happening? If your friends main role in the startup is the creative side why would they have to spend hours and hours on things like finance and business plans? In your post it seems like everything that needs to be done now is on business side of things, what do you want them to be working on now?

No one is getting any money out of this deal right now, it is pretty clear that it is your pet project and everybody else has fulltime jobs. I don't see why you expect people to be working as hard as you are.
posted by afu at 7:06 PM on November 11, 2006

The absolute biggest choice you make when doing a startup is picking who you work with. If you're not completely confident about that, you need to stop and work that part out first. This sounds to me like a partnership that is not going to work. They may be valuable, but are you really comfortable committing to work with them for the next n years, all the while feeling frustrated about the imbalance in commitment? To do a startup, you have to want to work on it, not just do it because you have to. That's going to be really hard if you're working way harder than your partners, even if the equity is split appropriately.

I know it's a hard conversation to have, but I think it's worth sitting them down and saying something like "We need to agree on what doing a startup is going to mean. I want you involved because I think you're great at what you do. But if we're going to do this, we're all going to need to make sacrifices of time, money, social life, and more over the next few years. I'm not going to be upset with you if you're not comfortable donig this, but we need to decide this now."

Just a thought. Though, if you can't have that conversation at all, that seems like another sign to find new partners.

Sorry to be so down on your chances. It's just that I've been burned with a bad co-founder situation in the past, and it is not worth trying to avoid the issue. Feel free to email me if you want to talk it over. I was maybe/kind of in the position of the people you're upset with right now, so I might be able to provide more perspective.
posted by heresiarch at 8:01 PM on November 11, 2006

I think you're being unrealistic.

If someone said I should give up my social life (just like they did) I'd dump them like a hot rock. Who likes a nag? And what kind of reason is "Because I'm doing it!!"?

I'm also a bit curious about why you posted anon. You're very vague on what responsibilities these people aren't living up to other than giving up their lives for you. You say "I have all these business skills" but... A college degree does not equal skill which does not equal experience.

1) Why does everyone need to give up their Friday nights for you? You didn't give a reason other than "I told you so". If your post is a sample of your interpersonal skills, you need to work on them. Have you studied management at all?

2) If you can't have a frank discussion with these people about business, you should absolutely not be in business with them.

3) Just because you work hard doesn't mean everyone else should. If I'm in the middle of developing The Big Product, then my distribution person really doesn't have much to do until I finish.

4) Do these people have to be partners? Couldn't you just pay them outright? (I remember a company who brought in a partner to design the marketing materials, about a 2 week job. Only then they couldn't get rid of them...)

5) Sounds like you haven't finalized the organizations structure yet. Big mistake. Should be done way before anyone starts working 40 hours a week.

From my experience you should just drop it and get your life back or find different people. It's not going to happen.

However, if you want to try to get it back in order:

Pick a time 2 weeks from now, Tuesday evening at 7:00. You've got reservations at a decent restaurant, they're invited, their friends/SO are not.

At this dinner, announce that you're dissolving the partnership, and spend the rest of the evening waiting for them to talk you out of it. If they don't care or can't give you any good reasons why to keep doing it, thank them for the time and go your separate ways. Otherwise you know know exactly how they feel about the project and what their involvement is and you should be able to work better.
posted by Ookseer at 2:25 AM on November 12, 2006