Lessons Learned #4
Paul Graham says he will not fund startups that don't have a partnership. His argument is that if you can't convince at least one other person about your idea, then it's no good. I think Paul Graham may live in a different world then myself. For some reason, if you have technical skills, people are falling over themselves to partner with you. At my Christmas party for friends and family this year, I looked around at everyone at one point and realized every single (male) person at the party had either approached me with a business idea, or I had approached them. Maybe it's just my friends?
Anyways, there was a time where I was flattered by this, and would almost always indulge someone in their business idea. My business ideas are often somewhat narrow in focus, so when someone comes up with a crazy idea in an area I don't know, it sounds like it could be genius. So if I'm not working on something else at the time, what would it hurt?
The problem is, while many people dream about their business ideas and picture themselves getting rich over it, most people really don't want to dedicate the time it takes to getting a business going. Even when I do 98% of the work, and just ask them to approve or brainstorm with what's there, most people I've worked with found that too much to handle.
Now, the above paragraph doesn't necessarily describe the partnership I had with SearTech. Going into this partnership, we had a total of three people, me, my friend and the chimney sweep (who is also kind of a family friend). People tell you that you shouldn't go into business with family and friends, and that is not necessarily true. There is just a trade off that has to occur. There are always going to be conflicts in a business, where with a stranger you can supposedly just yell at them or "fire" them, but with friends and family you'd have to make a choice between the business or the friendship. Honestly, I think this is a benefit. It makes you evaluate how serious the conflict is, and forces compromise. I would never pick a business over a friendship, but if your the kind of person who might, you may want to stay away from this route.
So first, let me emphasize the good things about this partnership, and partners in general.
1) You have help! One thing that really sucks about being a one man show is that you can't really take a break or have a vacation. How liberating is having your own business if you have to check email while in the Caribbean? With partners, someone else can mind the store.
2) You have someone else to motivate you. Often I would get down on things when I was pounding away by myself, but whenever we would meet I would be renergized and full of vigor. Having someone else in it with you helps a lot.
3) Shared expenses. You don't have to output as much of your own money if you have others helping. Of course you don't make as much either...
4) The company. I imagine working all by yourself can get quite lonely. Being able to go to conventions with my partners was great, we had a blast wherever we went, and it's nice having someone to sound off with.
Of course there are trade-offs. The negatives I see with partnerships are:
1) The most obvious is that you share the profits equally. Which means every extra person equals less money for you. This wasn't a big deal for me, because although it sounds cliched I'm not really in it for the money. But it's almost impossible to guarantee everyone works as much as their share, so this causes friction with many startups. Make sure when you are taking on partners that they are really adding something to the mix.
2) Many early startups I see on the mISV boards are obsessed with the idea of "the sales guy". That illusive person that can sell sand to the Arabs, and ice to the eskimos. One thing I've learned is that there is nothing magical about the sales guy. Some of the best give a hard sell that results in more support for you to provide. I found I could sell as good if not better then others. The key to sales is confidence and building personal relationships. My chimney sweep partner was able to build quick bonds with other sweeps that gives you an "in".
3) If someone hasn't started a business by the time they are in their late 20s, they are not the business type in my opinion. I started by first business when I was 15. Most other people that work out well in startups have that entrepreneurial spirit that causes them to work until all hours.
So whats the overall lesson learned? I think it's good to have partners, but not strictly necessary. Any future ventures involving partners, the partner must have technical skills as well and hopefully complement me and vice versa, so the contribution is clear. They also must have had their own reasonably successful business in the past, and have a very clear dedication to the idea at hand.