Business with Friends

On the face of it, going into business with friends or family makes perfect sense. Everyone knows each other, trusts each other, and knows each other’s boundaries and red lines. There’s rarely any scope for surprises, and work gets done quickly, because everyone plays to their strengths.

Life is rarely so simple, however. With closeness comes the usual baggage of expectations. You’d expect your friend to never stab you in the back (a reasonable assumption), and never walk off with something you feel is yours by rights. Take a listen to this :

http://5by5.tv/specials/6

It’s something I came across today. I’ve been listening to The Talk Show since last year, without even realizing how much history it has. I’m one of those who has always associated The Talk Show with John Gruber, and never even given a passing thought to its previous incarnation on 5by5. I have a vague idea of who Dan Benjamin is after hearing about him and his support and understanding for Myke Hurley (one of my favourite podcast personalities) in setting up Relay.fm, a rival podcast network to 5by5. 

This five minute clip (and a rather long blog post at http://macryu.com/why-john-gruber-jumped-ship-and-betrayed-5by5-studios), however, made me realize that going into business with friends or family is among the worst ideas in the world _because_ of the trust. No one really knows another person, no matter how close they are. However, when the inevitable schism happens, the trust and cameraderie makes the split even worse because you never expect it. Sure, this may seem like a grim and cynical way of looking at it, and of course, there are thousands of cases where businesses or projects, set up by friends or family members, are incredibly successful. All I’m saying is that emotional proximity inevitably raises expections. You just *won’t* believe that a close friend or family member would ever short change you, and you’re constantly in denial when it happens. Emotions make you take poor business decisions, and that’s a lose-lose situation for all those involved.

What am I saying, in short? Avoid emotional attachments with business partners and, as a corollary, avoid going into business with people you’re emotionally bonded to. Inevitably, the person who thinks of the arrangement as ‘just business’ will walk away the winner, with no emotional baggage or guilt dragging him/her down. If you’re that kind of person, having people you trust around you will help you get the venture up and running double quick, and if or when things go wrong, your cool-headedness and detachment will ensure that you get the best deal, or at least won’t cloud your judgement.

Personally, I’m the kind of person who forms very strong emotional bonds with anyone I work with, and have a hard time distancing logic from emotion. This makes working with others a delight, but also something I take great pains to ensure isn’t a long term arrangement when finances are involved. This may sound horribly downbeat, but really, it isn’t. Besides, the old adage of ‘better to have loved and lost than never to have loved at all’ is great in theory, but sounds really facile in practice.

(Full disclosure : I’ve never been in business with a friend or a family member. I’ve just seen a metric tonne of examples of people who have, and have been burned by it. YMMV, of course.)

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