“I started some company with friends some time back which did not do well. So …, I started again with just one of them but he was mishandling funds and so down again. NOW! I decided to pause for a while and think through the whole process, plus option of starting out alone.”
“… what if I am not able to sustain the business on my own since some of my friends are better in marketing and so on?
What if my capital is not enough or I don’t get clients for a long time?
What will my friends think if I start alone because they are pushing for union yet I don’t trust a few based on [past] experiences?”
Mutembuli (Name Not Real), wrote to me with multiple concerns regarding his entrepreneurial journey. His concerns are many but we’ll address them in separate posts considering the breadth of issues they cover.
It is evident from the above communication that Mutembuli has a keen interest in being an entrepreneur. He has tried on two occasions to do business and failed. At this point, like any calculative person, he has decided to take a step back and re-assess his stand. One thing that comes out clearly is that he is not about to quit his entrepreneurial pursuits.
The first issue that comes out of his experience are the two fatal attempts he has made to start business with friends. In both cases no success was registered leaving him feeling quite desolate. This begets the question;
Is it wise to start a business with partners?
Conventional judgement is largely positive about starting business with partners citing reasons such as;
- Benefits accruing from the diversification of expertise that partnerships tend to have.
- The ability to build the business faster through raising capital or piggybacking on multiple resource centres.
- Partners offer an opportunity for checks and balances especially as regards new ideas and opportunities that require proper synthesis before being taken on.
- Partners help you spread your risk.
The reality however is that for each successful partnership you see in place, there are probably one hundred failed partnerships implying that it isn’t always rosy when it comes to dealing with partners in business. I have not met any entrepreneur who doesn’t have a partner induced setback story. Most of these experiences evolve around greed and misaligned visions for the business.
While participating in a recent exhibition, I got this visitor at my stall who on admiring my products on display eventually got into a business discussion with me. Within no time she narrated to me how she and three other friends had set up a meat distribution business in Nairobi, Kenya that used supermarkets and other retail shops as it’s outlets. Their business grew quite fast and just when they were looking forward to reaping some initial dividends, one of their partner swindled all the company’s money and abandoned the venture. This experience left a bitter taste in her mouth and she has had very many unanswered questions since then. Fortunately, after sharing with her my and other people’s experiences, she sighed in relief and promised to gather herself together and embark on a new venture she has been pushing aside all this time.
Our friend Mutembuli took a backseat to rethink his entrepreneurial pursuits and is seriously considering attempting business without partners. Based on his experience, I don’t blame him and probably it is worth the attempt. Starting a business alone can have some advantages over starting it with partners and these are;
- Ease of pursuing your vision. Start-ups rely a lot on a founder’s vision and their progress into a regular business is greatly determined by how solid that vision is. As an individual, you have a great opportunity to clearly follow that which you believe you want to achieve without being sidetracked. This is the challenge Steve Jobs (RIP) faced when as Apple Inc founder he had to contend with the politics of dealing with other partners eventually leading to his disgraceful exit from the company only to be re-admitted back many years later. With the leeway in decision making given to him upon his return as CEO, Jobs was able to turn around a company that was ’90 Days away from bankruptcy’ into the most valuable Technology company in the world within twelve years.
- Flexibility. Working solo can give you the ability to tune your working hours according to what suits you. There is no need to struggle fitting into the most appropriate working hours of multiple partners. As an individual, this also helps you create a better work and personal life balance. Imagine a young mother who feels she needs more time with her one year old infant, she would probably want to work with her child in tow or even work from home. Some of these decisions would be harder to make if there is need to get buy-in from other business partners.
- Decision making. Being solo gives you more comfort and ease for making decisions. Without having to balance lots of political interests that tend to arise among partners, you can be able to make decisions that don’t compromise your values and goals. Imagine a situation where you have partners and in pursuit of business, you come across this big client whose procurement personnel require a kickback in order to give you business (this by the way is the norm in many countries and big business engagements, no one should lie to you). Your partners may be advocating for the bribe while you’re against it. When it comes to voting, you’re out numbered and a decision that goes against your very ethos is passed.
- Long term business made easier. Neil Blumenthal defined a start-up as “a company working to solve a problem where the solution is not obvious and success is not guaranteed.” This is remarkably different from a business whose key objective is to generate revenue or even profits from day one. Usually the flow of events is first a start-up then a business. The start-up phase requires a solid and unobstructed vision and approach which is usually hard to achieve with multiple founders. The mass and velocity with which a company morphs from the start-up phase to a business greatly determines its potential for success. There is this case of a team of Ugandan software developers who teamed up with some subject matter specialists to design a Mobile Application that caught the attention of many. The day they got a handsome pay after winning an international App competition is when differences emerged and eventually some founders had to drop off. Full commercialisation of this Mobile Application has still failed to be realised years after it surfaced.
The idea of starting a business alone is therefore not a strange one and considering the circumstances and experiences of our friend, I would urge him to give it a try, after-all that is what entrepreneurship is all about. Notable global brands that had solo founders are Amazon, Craiglist and Wal-Mart. This list of ten successful solo start-up founders could prove useful too. This however doesn’t mean that you can’t co-opt partners in future after the business has grown. I have been in situations where I have flatly refused to bring partners into a business during the early years for fear of derailment. Some partners come with different goals and this can end into a bitter divorce. In this article, I share about partnerships and as a follow up on which partners to avoid, Scott Gerber’s article on Ten Worst Partners for your Start-up hits the nail on the head.
What would you advise Mutembuli?
Proceed to Part 2 of this article