It depends. I wish I could provide you with a more concrete answer but the reality is that this is a very personal question.
Just like the question - should I leave my job or break up with my boyfriend/girlfriend? You need to do a lot of self-assessment before coming to a decision. My goal in this article is to show both sides of the coin and help you make a choice.
What are the pros?
An 80-year Harvard study showed that across all societal classes, the secret to living a happy life is the depth and quality of friendships.
Does this success translate to the business world?
Some of the most prominent brands were started on the solid foundation of friendship:
Google - Larry Page and Sergei Brin Microsoft - Bill Gates and Paul AllenApple - Steve Jobs and Steve Wozniak
It sounds rosy but these cases could just be one offs and in truth, we just don’t know how many failed businesses resulted from a souring of friendships.
Let’s take a look at the pros from a more qualitative lens:
Fewer surprises when you work with someone you know
Working with a close friend is arguably safer than partnering with someone who you just met at a networking event.
You have an awareness of their personality beyond just the surface level and know what motivates them.
You’ve probably also seen the good, the bad and the ugly. So you know what you’re getting into.
With business being so uncertain, it’s best to go at it without any surprises.
You share similar values and beliefs
Would you really be close friends with someone if you fundamentally disagree with them? Probably not.
As the old saying goes - “birds of a feather flock together”.
Even if you may have personal differences and differing opinions on certain topics, typically your core values are very similar to your friends. This makes it much easier to smooth out and resolve the inevitable conflicts that will arise.
You can easily communicate
We all have those friends who we are so close to that we greet them with an insult. Years and years of knowing each other often means that you can communicate at length and depth around any issue.
This just isn’t possible with someone who you’ve only known for a few months. In the business world, where clarity and decisiveness are important - easy communication allows you to get to the heart of the matter quickly and solve the problem.
You know each other’s strengths and weaknesses
If you’ve known a friend for a long time, you probably have intimate knowledge of what they are good or bad at (and vice versa). This allows you to appropriately allocate responsibilities across the business.
You may be a great people person - in which case you’d be best positioned front facing potential clients and selling them on the product. Your friend may be more introverted and detail oriented in which case, they would be best positioned working on improving the product.
Work is more fun with a best friend
We spend almost 40% of our life at work so it’s important that we work with people we can get along with. When you have a friend as a cofounder you have the rare luxury of working with someone who you actually want to spend time with.
You get to talk about more than just business but also shared hobbies, interests and activities - the things which originally brought you two together.
What are the cons?
I’ve painted the pros of starting a business with a friend but it’s also important to look at the other side of the coin. Ironically, some of the benefits that I’ve stated could also be disadvantages and cause major problems. This is why I personally choose to start businesses alone.
Luckily, there isn't a shortage of successful companies started by solo founders. For example:
Tesla - Elon MuskEbay - Pierre OmidyarAmazon - Jeff Bezos
There is further statistical data from Techcrunch showing that of all startups that successfully exited, 52.3% of them were solo founders - significantly higher than two founder (30.1%) and three founder (12.5%) teams.
Let’s take a look at the reasons why you wouldn’t want to start a company with your friend:
It’s hard to be frank
It might be easy communicating with a close friend when times are good but when times are tough, sometimes it’s very difficult being frank.
Personally, I don’t like hurting people who are close to me and with some friends who are sensitive it can be difficult being honest if they aren’t doing something correctly.
If you are someone who values your friendship more highly than your business, you might inadvertently let errors slip and fall through since you don’t want a messy confrontation with a friend.
Difficult to know who the boss really is
It’s hard to know who the boss really is when there isn't an agreed ownership structure. Even if you have a defined 50-50 structure, there may be instances where one party works more than the other and feels like they deserve a bigger piece of the pie.
If this tension isn’t communicated promptly it can lead to bigger issues within the business such as distrust and lack of strategic direction. This will make the failure of the business inevitable.
You could lose your friendship if the business does not go well
The reality is - if you go into business with a friend you should be prepared to lose your friendship in the event of a fallout.
This has happened to me once, and because of a mismanagement of expectations, I lost a friend who I really valued.
I even remember telling him, “You should know that I value our friendship more than any business or money we will ever make.”
Fast forward one and a half years and we grew more and more distant because I wanted to pursue a different path. It only took another six months before we lost touch.
You could lose mutual friends as well
This may seem like a smaller point but overlapping friendship circles may mean that if you lose your business partner as a friend you could also lose a group of friends alongside them.
Imagine breaking up with a long-term girlfriend or boyfriend where you have many mutual friends.
Naturally, some of them will choose to side with him/her and you could lose them. This may not affect your business directly but it’s something to bear in mind. It’s important to also have a healthy social life.
You may not know what your friend is like in business
You may be friends with someone for years but you may have never seen them in a business setting. This is especially true if you’ve only been in social situations together. You might be surprised when they behave differently when confronted with challenges.
Sharing a good laugh over a beer is not the same as grinding out sleepless nights trying to launch a new product. If your friendship has never been tested then you won’t know whether or not it has the fortitude to withstand the uncertainties of business.
What are the questions you need to ask yourself?
We’ve seen both the pros and cons of starting a business with a friend. Now it’s time to ask ourselves some key questions so that we can zero in on the best choice.
Do you share the same vision for the business?
It’s important to understand what motivates you and your best friend. Ensuring alignment at the start is essential.
For example, if you have a vision for building a lifestyle business that can sustain itself for years to come and your friend has a vision for creating the next “Google” then these are two completely different visions.
This is likely to lead to future tension.
Do you have the same values?
Similar to a shared vision, it’s important to also share the same values. If you want to create the best possible product but your partner wants to make as much money as possible - this will lead to inevitable conflict.
It will be difficult to make tactical and strategic choices since both of you are motivated by fundamentally different things.
How do you resolve conflicts?
As a business owner, you are valued not just by the technical skills you bring to the table but also by your ability to make informed decisions. Part of the decision-making process is having open and honest conversations with your employees and partners.
You need to be sure that you can have these conversations with your friend. If you had a previous disagreement with them - how did you resolve it? Did it affect your friendship after?
If you can’t do this it’s nearly impossible to move the business forward.
Are your skillsets complementary?
Beyond vision, values, honesty, and conflict resolution, it’s also important that you and your friend have skillsets that complement each other. Imagine a business with two people who are excellent at sales but terrible at product development.
Neither of you could work effectively since you both wouldn’t have a product to sell. Often the best teams have leaders with complementary skillsets. In the case of Apple, Steve Jobs was the salesman and Steve Wozniak was the product developer. Neither could exist without the other.
Are you willing to lose your friendship for the business?
This is probably the hardest but most important question you need to ask yourself. It’s also one of the reasons why I personally choose not to go into a business with a friend.
If you made all the money in the world but lost your best friend in the process - would it be worth it? Think hard and deep about this one. It may not be a one-size fits all answer as well. With some friends who you are not as close with, it may be easier to forego friendship for profit.
For me, I’d rather keep my best friend.
Summary
There isn’t a straight path to success in business. We’ve seen instances of both solopreneurs and tag team duos who have created thriving companies.
Elon Musk transformed himself from an eccentric geek to the real life Iron Man by materializing his vision of energy sustainability with Tesla.
Likewise, Steve Jobs and Steve Wozniak revolutionized the electronics industry creating Apple - the world’s most valuable company to date.
Choosing to go into business with a friend is a very personal question that you should consider carefully.
I’ve presented both sides, but ultimately it’s up to you to decide which path you should take.
About the author
Strategy consultant by day, blogger by night - Eduardo Litonjua shares his experiences on building online businesses in his blog Passive Income Tree. Keap readers looking for online income ideas can download the free report on 20 Proven Passive Income Ideas.
