PARTNERS

PARTNERS

Choosing a business partner can, and often is one of the most consequentially determining factors in your company's success. The problem is that very few people are truly good at doing it. In my view, the best analogy that can be given is that deciding on your partner is a lot like choosing a wife. Once you make the decision - you're stuck for better or worse, and getting out is expensive and time-consuming. Not that I would know anything about marrying someone, but from what I'm told the example stands. In any case, there are a few key points that you need to bear in mind when embarking on this journey.

1). "Hire" experience over personality.

Ignorance is going to be your largest liability in business. The fact that you don't know how to make $10M/year is costing you $10M/ year. So you need to pay down that debt as soon as possible. A good partner will be invaluable for this. If you like the person, that's great, but it doesn't pay the bills. In the same way, marrying for appearance won't lead to a fulfilling relationship. Furthermore relating to experience you need to clarify 3 things.

1.1) Have they achieved what you are aiming to achieve? Don't be bashful about asking pointed, tactful questions about the attainment of what you are looking for. If they are who they present themselves to be, they'll understand and not take offense to you asking. If they do take offense to your questioning, you probably struck a nerve and should perceive this as a major red flag.

1.2) Assuming they do have what you want, have they taken anyone else like you there? Have they ever mentored before? If so, what was the result? Ask to speak with previous mentees where possible.

1.3) What seats inside of their current business do they excel in? How does that compare to your own abilities? Understanding the strengths and weaknesses of the prospective team will allow you to predict potential bottlenecks before they ever become an issue. If you don't yet know what you are good at inside an organization - say as much and if they're the right person they will help you to understand.

2). Ask yourself, why would this person want to be my partner? Do they want you for slave labor? Moreover, is this slave labor that they are incapable of doing themselves, hoping that you will fare better? Are they trying to establish a long-term relationship? Or are they betting the farm on some young, lean, mean, fighting machine in hopes of one last grasp at the brass ring? You need to go into this with eyes wide open and that only happens when you look at it from both sides.

3). Establish common core values. Make a list of the top five most important values that you hold and evaluate how many you share in common. Are they of the same faith and political affiliation? Do they have the same goals for the business as you? Are they playing to win, or playing not to lose? (Those are two very different things which I will probably go into more detail on in a later writeup)

The list goes on, but if you brush these commonalities under the rug hoping it will work itself out - spoiler alert - it won't.

This sounds like a pretty tall order for someone to meet all of the above qualifications, but the reality is that you are going to be talking to this person every day if not multiple times a day. In many cases, those conversations won't be about smashing quarterly earnings goals. They will be painful, so it is vital that this person honestly has your best intentions in mind.

I will close with a quote from the hedge fund giant Ray Dalio:

"Remember that in great partnerships, consideration and generosity are more important than money."

Slow down, and choose logically.