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Building Effective Relationships in Start-up Businesses

Building Effective Relationships in Start-up Businesses

New “start-up” businesses are said to be the key to future prosperity in the world. Businesses that have been around for 25 years or less already account for over 50% of all employees in the US for example. These are not only startups of course but they are nonetheless young companies which have a “startup feel” to them. Add to this that startups are often a “hot-bed” for new innovation and technology and that they are frequently substantially changing the way that the world will operate in the future, we should probably pay more attention to who can work most successfully in a startup or young company climate and how they can best build relationships, especially among the founders.

It is often the case that only one entrepreneurial person conceives the idea on which the startup will be based and it is therefore not uncommon for the idea generator to commence the start-up build alone and without partners. This can work quite successfully for a while, especially if the team is small and the sole entrepreneur’s wish is to preserve the “seed” cash they have raised to get started. However, as time goes by, it is also common for a founder to feel lonely and feel they his or her skills are being stretched very thinly. In this situation the search for one or even two co-founders may commence in earnest, even if it means giving up some ownership and control.

As the chart below indicates on the left, in this sole entrepreneur or pre-partnership phase the feeling of most entrepreneurs is often one of loneliness or isolation and there is a wish to get more external help to fill the apparent gap. However, before any entrepreneur brings one or two partners on board it is critical to identify the real needs of the business, what the focus should be, what goals should be set and what skills are most in need. Let’s therefore now look more closely at what is needed in all four phases that are identified in the chart below:

1. The pre-partnership phase

New partners are often brought on board to a startup with little pre-planning and effort to ensure that there will be a good long-term fit. The better approach is therefore to identify exactly what is needed both in terms of the business and the personal fit up front and to do this with a high level of precision. This means that a partner should be selected based on extensive research for “best-fit” (and not on pure empathy terms) using objective critical thinking. If necessary, external advice can be sought to get the right result, as different perspectives can be extremely helpful in this situation. In the final analysis the more care taken here the better to ensure that significant relationship problems are avoided later.

2. The Early partnering stage

Once a new partner(s) is on board there is often a sense of relief on the part of the original founder and a “honeymoon period” will prevail for a while. In this sense the feeling is usually optimistic or even idealistic and the partnership will appear to be a little like getting married (throwing two or more lives almost wholly together). Despite this apparent harmony, it is still important to set boundaries between partners at this stage, especially in terms of what each person’s values are and what they want them to be for the business. This is often best done with a candid discussion and written goals and targets for each person, which are then followed up upon in a disciplined manner.

3. The High Energy/Effort stage

A new partner(s) will often quickly mean that a business starts to experience much higher levels of energy and effort as two heads (or more) are better than one and a lot more work can get done. This can be very positive and energizing individually, but it may also mean that business partners drift apart and the actual workload starts to skew (or is perceived to skew) more towards one partner than another. In such cases, although we want to ensure that each partner has the independence and space to get their job done, communication also needs to be much more regular so that flexibility can be maintained. For the most part this can be done by paying greater attention to planning and organizing of tasks and projects to ensure that a fair split of the workload can be achieved (and burnout of one or both partners avoided).

4. The Fast Growing/Painful phase

Assuming that a partnership survives to this fourth phase relatively unscathed, there will usually come a point when the partners start to experience high growth or success but disagree on how to handle it. This can often be worked out with care but it can bring great stress to partner relationships. Feelings in one or more partners can be high levels of frustration or a feeling that new approaches are needed. Rather than to “fight this out” it is often better here to seek external help in the form of third-party mentors, coaches or other experienced individuals who can take an independent and dispassionate view. They can then focus conversations on more strategic rather than tactical issues and ask deeper questions that encourage partners to listen more and come to new and different conclusions (and often ones which are best achieved by compromise and collaboration).

We are not suggesting that bringing in one or more partners is ever easy. But if original founders recognize that there are different phases to this process, all requiring different approaches and skills, the chances of the partnerships working out are considerably improved.

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About Dr. Jon Warner

Dr. Jon Warner is a prolific author, management consultant and executive coach with over 25 years experience. He has an MBA and a PhD in Organizational Psychology. Jon can be reached at OptimalJon@gmail.com

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About the Editor and Primary Author

Jon Warner

Jon Warner is an executive coach and management consultant and in the past has been a CEO in three very different companies. Read more

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