Should You Partner Up?

When I hear coaches and consultants talk about partnering, my ears perk up.

Not because I’m a big believer in partnerships (as you’re about to see). 

It’s because I’m listening for the real reasons they want a partner.

Most of the time I hear things like:

We would have a lot of fun building something together

We have complementary skill sets

We have similar audiences

Then in podcasting, there’s this one, We want to start a podcast together, so we need a way to monetize it.

And there’s nothing wrong with any of those impulses.

I started my first podcast with a partner, and we weren’t sure how we would monetize it. 

Now it makes us 6 figures a year. 

However, partnerships are tough to sustain over the long run.

It’s really hard for two partners to put in the same amount of effort, energy and focus into a project for years and years.

At some point, one partner will feel like they’re putting in more than the other partner. 

Sometimes even both partners feel this way. 

That’s why in partnerships like law firms, profit goes into a pie and the pie gets split along the lines of seniority or billable hours. 

Dividing the pie “fairly” is really hard - even for firms who have decades of experience.

In one of my favorite books of all time, Managing the Professional Service Firm, consulting legend David Maister devotes 50 pages of the book to partnership issues.

It’s all the nitty gritty stuff people don’t think about until they’re already in a partnership, like…

• Partner performance counseling (year end appraisals, self-evaluations & feedback)
• Partner compensation (billable hours, seniority, rainmaker vs. operations activities)
• Strategic decision making, goal setting and aligning incentives with strategy
• Partner relationships (partner archetypes, managing partners, division of powers)

In other words, making a partnership work is complicated.

In fact, Maister said that it was fairly common for a firm to bring him in for consulting, and the result was one or more partners leaving.

One of my clients says having a business partner is like getting married (except you don’t get to make out with them). So there’s a lot of potential for friction.

So here are 3 questions to help you make good decisions on partnerships…

1. Do I really have to give up equity to build this business?

Look for ways to hire people, and where you can’t hire a skillset, create joint ventures, revshare or commission agreements with pre-agreed caps, all in writing.

2. Could I pay for the skills and expertise instead of partnering up?

Partners are permanent, so make sure their skills are permanently needed. 

Chances are, you only need a certain skill set for a short time. 

Think about Steve Jobs and Steve Wozniak. One was a visionary marketing genius, the other was the tech genius who actually made stuff work in real life. They needed each other. But even the tech genius was a skill that could be hired out. Steve Wozniak was crucial in the early days, but it was Jobs’ drive and vision that made Apple a trillion-dollar company. 

3. Could I create a sense of mission and camaraderie within my team, instead of with partners?

Entrepreneurship is lonely. Part of the draw of partnership is the sense of community and shared mission.

The good news is, you can still have that without giving up equity.

Look for ways to create that sense of community and shared mission by building a team of contractors or employees. Get them fired up about your mission and their role in creating a new future for themselves and others. 

Everything that is truly valuable to others takes energy, effort and focus to succeed. 

In some cases, partnership can be greater than the sum of its parts and produce amazing things with less effort.

Yet I’ve noticed that a major allure of partnership is the assumption that it will take less effort, energy and focus to succeed.

And that’s a dangerous assumption to start with.

So when a partnership opportunity presents itself, just take a minute, step back and ask these few questions. It might help you stay focused on the areas where you can make the most impact and reap the most rewards.