I get it. You and your friend have this great idea and now you want to start that company. Friends are always fun to have until you run a business, company or website with them. Most of the time, you’ll deal with having sessions about talking the dream of “making that money” or “being your own boss”. Rarely do you find that one friend that has the same vision, work-ethic and enthusiasm you have. And if you have two or more who have shown commitment, you’ve got to be very lucky.
The more people you have involved in the starting process of any company, the harder it gets to not only keep the vision consistent but to keep a team moving. In one experience, I would be invited by a close friend to be the “web guy” of a group that wanted to start a portal site. That group would have 10-12 people on it tossing around ideas about what the site should do. They were all comprised of friends I was just getting to know. I would get the requirements of the site but it would change often. In the end, the group would not be satisfied because certain features from friend X were compromised.
In another experience, this other company had another set of friends who had a good solid idea and business plan. Sad part was that everyone was either lazy or simply didn’t have real direction. This was the fault of the CEO. Meeting after meeting of idea sharing was not only a waste of time but killed the morale of the group. The key to getting everyone else to buy into the CEO’s ideas is for the CEO to actually do something. Make a prototype. Start a platform. If the CEO is mostly the vision guy and does more delegating rather than trying to present that vision in a tangible way, then it’s time to leave. If you’re left with emailing the CEO on what to do next in this early stage of the company, that’s a major red flag right there.
Out of the 15 startups I’ve been in, one actually survived and got acquired. The rest of them died before launch and a the few that did launch actually hit a wall, then died. The startup that survived started out as 2 friends.
- Have a small group. Don’t do things by yourself unless the scope of your project is small enough to do or is in some sort of niche. Even two people can be a good small group. The bigger the group, the harder it is to control the ideas and suggestions flowing out from it.
- Right friends. Right people. Find friends who have the same level of enthusiasm as you about the company and the business idea. Measure their enthusiasm based on their work, not their promises. Look for walkers, not talkers. Especially the consistent ones who are genuinely interested in the business at hand.
- Make sure the business plan is solid. Have a direction. Make sure you go through every single nuance of the business plan. No matter what any of your friends will say, the business plan is THE document that declares which direction the company should take and how it should execute.
- Have a contract. This is important. Even if you’re doing business with the closest of friends, it doesn’t have to be complicated. It just needs to state who owns how much stake of the company and who has the final say on major decisions. More importantly, it also protects your intellectual property, your work and other proprietary ideas you may have tossed around. Get it over with so that you can move on with moving forward with the company.
- Allow your friends to be honest. Although the headline sounds more obvious than anything, the kind of honesty you want to from friends (especially those who are working with you) is the type that gives you real honest feedback about how your business is doing. And not just on what sucks, but why it sucks. But more importantly, how to fix it – that is – if it needs to be fixed.
- Be consistent. This is a tough one. It’s hard to find out who’s going to stick around when things are a bit slow. But the best measure of this is to see who’s still working when key personnel (i.e. CEO) is out on vacation or has to handle other parts of the business. So when things are on a standstill, and person X does nothing – it’s usually a good sign that the friend won’t be working with you long. Cut your losses, stay as friends and move on. Don’t bother listening to the many excuses will tell you and save the trouble.
- Take ownership. Any leader of the group must take ownership of all issues that happens with the team. If one team member screws up, it is unnecessary (and in most cases downright wrong) to point out to the rest of the team that one of your guys screwed up. Instead, talk to that person one on one. In the end, you’re the Captain and whatever happens on your ship is your responsibility. If the business is a success, give credit to your team first. A lot of so-called leaders will take credit first before for the team but the real leaders credit their team first before themselves.
- Be patient and positive. The founder of the group should be the person who has the most understanding and must be the rock for the team. That is not to say that you’ll tolerate a weak work ethic or missing deadlines. Entrepreneurship is not for perfectionists and not everything will run smoothly. If you don’t pay a single dime for each of your staff members and you complain about every little thing they do, don’t expect them to stick around. If they are working for this business at their own accord, the business should be something the staff wants to be passionate with. The worst thing is to have a staff walk out on you on the day you need them the most. I’ve seen it happen. Even if they are getting paid, patience must be practiced. Be approachable and keep your door open.
- Get straight to the point. If there’s one thing people hate, it’s a CEO that can’t get straight to the point. If the CEO is the type of person who has to bring up 10-20 problems over how the business is failing or has to point at yet another problem but can’t come up with a single answer as to why the business is failing or has to explain for an hour why everything sucks before finally coming up with a solution, it’s game over.
- The leader must lead with actions. I’ve been in so many startups where the leader loves to talk, likes to own the title but they don’t fit the tag. I’ve been in ones where a organization tree is drawn up before any work was done. And when I mean by work, I mean actual direction. Hell, leaders can build prototypes and do tons of the grunt work themselves. And when they do that, they’ll earn the respect of their teammates. And that’s just the respect part.