How Quickly Should I Jump into a Business Partnership?

7 years ago · 3 minute read

AMA question #1:

“Many of your guests have mentioned a business partner as a cornerstone of their business and at least one guest has mentioned a bad experience with a business partner. How fast would you jump into a new endeavor with a partner and what qualities would you look for in a partner?”

Here’s our answer.

Key points:

• This is like dating. How quickly would you get married? A business partnership is as important as a marriage. It can make or break a business. If things go wrong, things can go really wrong.
• How does your potential partner treat other people? How is he or she in their personal relationships. You need time to evaluate this.
• Go slow. Don’t partner with someone you haven’t known for years.
• Article mentioned [link]: “Treat your waiter well.“

AMA Video Transcript

Nate Broughton: Question is, many of your guests have mentioned a business partner as a cornerstone of their business, and at least one guest has mentioned a bad experience with a business partner. I bet you it’s probably more than one, to be honest. How fast would you jump into a new endeavor with a partner, and what qualities would you look for in a partner? Good question.

Dana Robinson: This question is really a great question to ask, and you should never jump in fast with a partner. Would you get married fast, Nate?

Nate Broughton: That is, well, no, and that’s the analogy to draw. I think I dated my wife for nine years before we got married, so if that’s any indication, the answer is no.

Dana Robinson: So many businesses fail because of partnership failures, because of one or more of the people that are involved in the business. People are the linchpin of a business. They’re going to rise or fall on the people, and if you have a partner that’s not pulling their weight, business is going to fail because of that.

Nate Broughton: Our advice is definitely to go slow, but beyond that, what qualities should you look for in a partner, because that is what our friend asked.

Dana Robinson: I think you’re basically asking for dating advice. What qualities would you be looking for if you’re on a dating site. It’s the same. You’re looking for people with integrity, a hard work ethic. You’re looking for people that you can get along with, that have personality, that have skills that are going to apply to your business. Most the people that we’ve had on that have successful partnerships, it’s because two people or more than two people in a multiple partnership have these characteristics. It’s about character. It’s about being honest and working hard, and it’s about the skills that you bring to the table.

Nate Broughton: I think those should be complimentary in the best case scenario, right?

Dana Robinson: [crosstalk 00:01:45]

Nate Broughton: You should hopefully … We just had a guest on who was talking about how he really likes to keep his head in the clouds with big strategy, design, where’s the business going, what’s the product going to be, and he gets along really well with his long-term partner because that guy’s an operations guy, makes sure the bills are paid, is there on time, sets the schedule. That’s the type of partnership I think that’s going to last long-term because they compliment each other each … They’re complimenting each other along the way.

Dana Robinson: Absolutely. Just like getting into a marriage, you want to know something about that person’s personal life, their financial life. That person’s got a crappy marriage, they’re going to end up getting divorced. Do you want to be their partner while they’re getting a divorce?

Nate Broughton: No. That’s actually a good tip to watch out for is … It’s an indication of why I think you should take some time to figure this out. You need to understand who this person is, how they act around other people, what are some of their other relationships like. I know any business partner I’ve had, I figure that out over the course of a couple years probably. How do they treat their spouse? How do they treat waiters? The guy I worked for in private equity had a famous article about how do they treat the wait staff or whatever, and that’s how he evaluates people he wants to do business deals with and partners, and I think that’s really, really good advice.

Dana Robinson: I just a saw an article on social media that was actually about dating, and it was someone talking about women evaluating men and it said the same thing. If this person treats the Uber driver badly, they’re going to treat you badly. Do you want to be in a relationship or in business and tie your financial life to somebody who’s going to be a jerk?

Nate Broughton: Think about it that way. Think long-term, and, obviously, with the things that we have just said, you have to know it’s going to take time to evaluate that person, so don’t rush in.

Dana Robinson: Step back and think, do you need a partner? Sometimes, people really think they need a partner when they need to just get over the hurdles, the fear, the thing they think they can’t do and try doing it on your own.