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Partnership perils

Posted by Michael Bloch in ecommerce (Thursday August 30, 2007 )

Thinking about launching into an online project with a buddy, colleague or family member? It’s not always smooth sailing and often it can turn into a shipwreck.

I’ve just finished reading an interesting article “The Dark Side of Startups“. Dharmesh sums up the conflicts that can occur between partners quite nicely and there’s some interesting comments from others at the end of the article.

There’s certainly a honeymoon phase in partnerships – the idea of sharing the load, getting more done are very attractive; but over time, little chinks, eccentricities and minor issues that may not have bugged you before about other the person can fester into major points of contention.

It happened in my family years ago. What was meant to be a way of bringing the family closer together, securing our collective financial future while living in a beautiful place ended with the family being torn apart. Our family was pretty strong, the business was good; a little gold mine actually – it was personality issues relating to one particular member that brought it undone and the ripple effect it had was nothing short of disastrous. In fact, it was so bad, I would never enter into such a partnership myself.

If you’re thinking about hooking up with someone else in order to achieve your online dreams, be sure to separate business from personal relationship very early on in the piece. The way that work will be done, strategies for growth, decision making and profit sharing should all be thoroughly documented prior to getting under way – and bring in a professional third party to oversee that documentation process.

The old saying “there’s no friends in business” is certainly true when it comes to partnerships and many have regretted starting out on a “we’re friends, we trust each other, we don’t need a formal agreement” basis.



 

 
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