Friday, July 17, 2009

A Few Good Men: My Experience in Partnership

There are many decisions one makes in a startup.
The ones that hit us first are the core idea, legal issues, startup funding and employee hiring.
But finding the right partners is just as important, as I found out the hard way.

Here's my story of realization: my startup needed partners, and not just any partners.

In the beginning: Flying solo
I started solo on my web-based startup. I had a fair vision for the finished product, and had a good grasp on the technology.
Bootstrapping my way; I'd head to my home computer everyday after my day job.
On weekends I'd simply invest an additional 16 hours of my time.

To get things done sooner, I hired freelancers by the dozen from websites like guru.com and elance.com.
Choosing the ones with five-star reviews, good looking portfolios, and low end bids - I assembled my little team.
But I was in for a surprise. The hope was to get done fast and on the cheap; the reality, though, was that the typical freelancer was of no help. Without first-hand recommendations, finding the right freelancer was a shot in the dark.

Moreover, every aspect of the website demanded meticulous planning. Be it in legals, application development or site design - I had to invest a lot of thought so I won't have to rework later.
Making decisions in all these areas - I'd often have to step out of my area of expertise. Was I starting an LLC or Corp? Would the website be colourful or serious, the text formal or chatty? Not only were these myriad decisions time consuming - they were often difficult to make, especially since I didn't have a relationship with the freelancers assisting me yet, so was compelled to always do a little research.

Finally, when my Czech developer contacted me on launch date saying he hadn't done anything - I realized I needed help in managing freelancers and make decisions. I realized I needed partners.

Attracting Partners
Looking for people who can help - I started speaking with friends.

Foreseeing myself dipping into a lawyer's knowledgebase or a designer's design skill, I expected partners to cover my weak areas with their strengths.
Many friends signed up to partner with me - and I promised ownership in exchange for their talent. Retaining majority ownership, I wasn't so keen on monetary investments from them.
Soon friends, and their friends were contacting me. Everybody wanted in. It was inspiring to see people contribute to my website without an immediate reward in sight. The team soon grew to eight partners.

Quantity not Quality
Few weeks later, the plan wasn't working. Though the group grew, it wasn't effective. I hesitated to confront the group, since these were friends helping for little or no return.

The semi-professional relationship and subpar performance from some of my friends, put me in a tough spot. I started to wonder - do I ask some of them to leave?
I surveyed my friends to understand why they are helping.
Gently probing, I found that a few were passionate about the idea; though many were looking for a 'startup experience', were doing this as a favor, or were simply bored with their 9-5 jobs.
Those lacking passion were not bringing in any energy to the starutp. Those with other benefits in mind weren't top-dogs on the project.

The Filtering Process
Unsure of how to deal with my team, I reached out to Vikrant -Head of HR in a Multi-National Organization.
Vikrant suggested that I work with this group purely as with professionals. "During work time, work; and when you're hanging out, then hang out", said Vikrant. This made sense to me.
I started working anew with the team. Treating them as professionals, I started demanding the best from them. I could see some partners were resenting it, but I persisted. Everybody on the team needed to be accountable.

I also figured that holding people accountable for their work, and asking them to finance the startup is an acid test for their commitment. So I stressed our need for more funds, and requested everyone come up with a comfortable monthly contribution.

While some people had genuine issues in making monetary contributions, there were many who weren't serious, and this request effectively weeded them out. Those not truly 'with' the idea started to get more involved with their lives, and move away from the team.
My team was now shrinking; but I was happy the relationships were not sacrificed. I did not have to ask anyone to leave, and those not interested were doing so voluntarily.

I was soon down to three partners. But more weeding remained. Of these three, two continued to be a cause for concern: one wanted a special status in exchange for his monetary contribution - this made me unsure of the trust factor, and I foresaw more issues in the future. The second did not exhibit the passion so important to a startup, and wasn't timely on his commitments.

I was scared of the impact of losing two more members from our team - especially since we were down to half our peak strength. But after much thought, I concluded that my company can only be as effective as its founders. And so I made the tough decision. I dropped the two.

Finally I was left with just one other partner. This person was passionate about the idea, and owned the idea and the project just as I did. I could sense his ownership of the startup even before he contributed to it. And he would drive the project forward, not wait to be driven.
He was a great sounding board, and made up for my weaknesses - such as in design.

The End State
While I admittedly miss the thrill of a large team of volunteers, I think dropping the fluff has helped my organization move forward better - decision making is quick and ownership of tasks is complete.
With just one partner - but one who is committed to the project, I find I have the sounding board I needed, and the ability to delegate to a trusted colleague.
In summary, after my trials with partners - I've decided that it's not about the numbers. It's about a committed team, that is passionate, makes up for each other's weaknesses and is willing to put their skin (i.e. money) on the line.