Relationship Stage 1:
Going Steady
"Before you marry a person, you should first make them use a computer with slow internet service to see who they really are."
Will Ferrell
The exciting buzz of new love, the butterflies in your stomach, the anticipation of the next meetup, the adrenaline pumping through your veins-the same feelings can be found when you are exploring a new business idea. Whether your new crush is with your new business idea or the individual you are contemplating joining forces with, the rush can be intoxicating.
How many times have you thought to yourself or heard someone else say how much they love a product or service idea that they'd thought of before it came to market? "I thought of that!" they may say. They just didn't know how to see it through. Perhaps, they thought the concept could not be replicated because it already existed. Laurie Grenier of the popular show Shark Tank® refers to this as building a better mousetrap. A better mousetrap can still make a lot of money serving consumers. You might end up putting the idea, the brainstorm, the thought away and never pursue it. It can be so frustrating when someone else creates it instead of you. Long before blow dry bars were the rage, Gina recalls having had the idea and never taking action. Now, one can be found in most malls and metro areas. Lynn can barely watch Shark Tank® without seeing a product she has wished for at one time she had in her kitchen. Why had she not thought of that? To create something, build something, see an idea from beginning to success is a process that is fulfilling, exhausting, challenging, rewarding, and, most of all, an enormous learning experience. A mentor of Lynn's once told her, "By creating a business from scratch and running it as you have, you have earned your MBA ten times over! And anyone who I would hire would have a better chance at running one of my companies if they once had their own. It should be a required class in every business school, 'How to Start a Company'."
Not unlike new love, the beginning phase of a new venture can be full of mixed emotions. It is exciting yet nerve wracking all at the same time. There are shifts in your emotions, like that feeling you get when you are strapped in on the roller coaster and your stomach goes up to your throat as you go into the first upside-down turn. No matter how loud you may scream, you immediately run back to get in line to ride it again! It might take several returns to the line to be able to anticipate each dive and turn the ride takes you on. The excitement and scary moments in a relationship and a startup can give you the thrill of a lifetime or an upset stomach. In either case, the ups and downs are opportunities to learn a lot about yourself!
Going into business with someone is a commitment not unlike a real marriage. Actually, we've heard many business owners say getting an actual divorce is far easier than dissolving a business agreement or partnership with another individual. That being said, when entering into a business union with someone you are in a relationship with, tread lightly. Do your homework, especially if you are in a close relationship with this person. Do not take for granted that your love affair with this concept or idea will forever be aligned with the other person. It may feel unified now, but that could very easily change in the future. Gina and Lynn were both advised early in their careers by their dads, "Don't ever enter into a written agreement with another individual that does not have a clear beginning and end, especially if it is someone that you hold dear." Why did we not listen to our fathers?
At the beginning of a budding romance, the conversations are exhilarating, everything is new, exciting, the world is your oyster and the possibilities seem endless. The challenges looming in the distance seem inconsequential or far in the future. The excitement overtakes you, and all you feel is the momentum pulling you forward. You feel like there's no time to waste, that there is undoubtedly another person out there thinking exactly the same thing right now, waiting to steal your new love, thus the need to get this established and out on the market first. The clocks are ticking, and your adrenalin is in overdrive. At this point, if there was a roadmap for you to refer to, this would be the time to take pause and ask for directions. But when you are starting to date, you are not thinking about being careful; you are throwing caution to the wind! After all, you are falling in love. What could go wrong? The exhilaration you feel at this stage could blind you by thinking it will always be like this.
It seems like people create successful consumer product companies every day. Every time you go to a Whole Foods Market or your local grocery store, you probably see new products adorning the aisles. There are more tea brands, chocolate bars, granolas, protein mixes, herbal remedies and snack foods being added to your local store shelves all the time. They are being touted on morning news shows and in magazines boasting stories of these amazing organic, non-GMO, sustainable, natural, BPA-free, non-toxic, anti-inflammatory, antiaging, plant-based miracle foods and healthy snacks. If it is on store shelves, it must be successful, right? Not necessarily.
Lynn's company showed at the Natural Products Expo West every year for almost a decade. She recalls witnessing more pasta sauces, bone broths, supplements and kale chips than one can ever imagine. In the beginning, while attending these huge trade shows, the feeling was "If that kind of growth can happen in a saturated market, one could only imagine the opportunity for a non-consumable solution the world so desperately needed!" Being first to market could be the name of the game. Find a manufacturer, produce a quality product, sell it making a decent margin, start collecting cash and live happily ever after. It is not quite that simple. There are a lot of dates to be had in setting up the perfect business marriage. You will leave a lot of conversations out of the mix if you jump straight from the drink meeting to the altar. Before you share your heart fully, the biggest question to ask yourself when you have an idea is, should you go it alone? Do you need a co-founder? When you start crushing on a new love interest, are you falling in love with the person or with the idea of being in a relationship? Who are you more in love with? The idea or the potential for seeing it to fruition with this person? It can be very exciting to develop a business idea with a friend or share your own idea with a friend or family member. It is important to carefully decide if you want to share in this relationship and take the dating phase to a new level or to break it off and embrace your independence.
Gina's dad always said to her that she did not need to get married to be happy. He liked to remind her she could have a family without getting married and experience all of the important life milestones that she desired whether alone or with a partner. In business, there are many reasons to go it alone and live the single life as well as many reasons to tie the knot.
Christa Tuttle, Launch Marketing; The Lone Wolf
Christa is [the] CEO and Founder of her own successful marketing agency focused on B2B marketing for startups to mid-market high technology companies. She decided, after a long and very well thought out research project, to NOT have a co-founder even though she had thought at one point she would and even had someone in mind for the partnership.
She spoke with almost 20 co-founders and 50 percent of those interviewed said they would have done things differently if they could do it all over again. What was shared really resonated with her and impacted her perspective on partnering. The two most important lessons she learned from these interviews and the two most consistent reasons those interviewed wished they'd gone it alone were:
- Communication. The ability of co-founders to listen and truly understand and respect a partner's perspective.
- Lack of clarity in "swim lanes," the problem with the actual roles of the co-founders' specified duties and responsibilities. The title "co-founder" is not a role or job description.
Christa's advice on this front is to make sure the job descriptions of each co-founder are clearly outlined and understood and to divide the titles into "shares" in order to determine salaries and perhaps even ownership percentage. For example, if one co-founder will be acting in the role as the CEO, perhaps taking on more risk and/or responsibility, hours, stress.and another co-founder will be taking on the role of Operations Manager or Marketing Manager or VP of Sales or Product Developer, when researching those actual specific job titles and the respective salaries. She suggests perhaps the reflective salaries represent the actual jobs. Of course there are always other variables to take into consideration and perhaps this is where ownership comes into play. For example, the salaries may not be 50/50 aligned but if both founders are taking the same financial investment and legal risk, the ownership may be equal. Point being, there is a LOT to discuss[;] do not just assume...
