Bizosphere

Partners, Friends, and Uncommon Goals

In a previous post I anticipated dredging up some old posts I did elsewhere on business and economics. This may not be the best of them, but it’s the one I had in mind specifically when I thought to do this.

This was originally posted at Accidental Verbosity (where there’s a comment almost as long as the post, from someone with similar experiences) on March 23, 2005.

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A while back, I saw a post at The Entrepreneurial Mind on friends as partners. Since then, I have been meaning to write about it firsthand.

This is not that post. At least, not in full or as I envisioned it.

However, I came up with a great analogy for one of the problems we had in my business. We love to watch The Phantom Gourmet, a Boston show on channel 38 each Saturday and Sunday morning. It’s a food and restaurant review show.

One place they profiled recently is a healthy fast food place started by two friends, who’ve known each other since they were five. Now, they pick on each other a lot while they’re working, and disagree about things, but they both wanted to start a restaurant, and they knew what kind.

My experience with friends getting together, all very informally and that was one of the problems, lends itself to a restaurant analogy. Imagine getting together and starting a business with some people, and you want to have a restaurant. You figure you all are talking about a formal sit down place, reasonable and family oriented, but not cheap, with a typical wide-ranging menu. That’s what you have in mind, after all, and nothing the others have said makes you believe they mean different. Come to find out that some of your partners meant they wanted a fast food place. Some wanted a ritzier place. The fast food folks found that some wanted it to be a fried chicken joint, and others wanted to serve burgers.

You end up with a hot dog vending cart, because nobody could agree, most of them never had any intention of putting in any money, and it was easy to set that up on the cheap. In theory, it can be used to bootstrap to something bigger. Trouble is, it really only needs one person to run it, not a whole partnership, and it only generates money enough to pay one partner, but other partners want a piece of it too, but don’t want to expand the business to multiple stands and spend full time manning one to make that possible. When you do need extra or fill-in help with the stand, you could pay someone $10 an hour, but partners want the work to go to them for $30 an hour. Partners also don’t want you to start up extra carts and hire people off the street rather than them, but they don’t want to staff them, so nothing is allowed to happen where you could make a profit on lower cost labor, making the other partners some money for doing nothing.

Because there is no immediate return in planning for the full restaurant the hot dog stand will lead to, the other partners won’t bother to put any legwork toward it, leaving it entirely to you, even though you’re running the stand full time to help bootstrap the whole thing.

It’s an excellent analogy for my business. One of the big problems was lack of common goals and focus.