HOW to do business with friends.

Successful startups begin with an, “ugh… I wish…” and a friend saying, “We could do that. When do you want to start?”


They begin with friends in San Diego restaurants wishing someone had highlighted the menu like a used textbook. They begin on exotic beaches with someone burning to share video evidence of their adventure with those back home. Successful startups begin in a Nashville basement with co-teachers designing a better snowboard.

But then, mom reminds us, “Don’t do business with friends.” And that gives us pause. Can we afford to listen? Should we let an amazing, problem-solving, beautiful idea fade to nothingness simply because of an old, albeit very persistent, adage?

We do not always have a choice. In a perfect world, sure, emotions wouldn’t get in the way. In our world, friends are the first to bolster an idea we have and are the only ones willing to drop everything to support us. They are the first ones to jump on board, to share their knowledge, to promote our brand.

In this age of speedy, agile startups we are going to do business with friends. We need their enthusiasm. We need their ear and criticism. We need their connections. We need their likes and shares.

The question becomes not whether we should do business with friends or not, but how to do business with friends, because we have to.

Organizational Culture Methods

  1. Embed gentleness into the culture. When giving advice or criticism as just friends we are gentle with each other. “Hey man, I love you, but when you didn’t show at my event it bummed me out.” When our company goals supersede our gentleness, we lose the ability to give each other the benefit of doubt. It’s easy to put the business too far ahead. “Hey man, you need to be at these events — for the company.”
  2. Pick out and celebrate the interesting aspects of each other’s lives. “Can you show me that video of you and your mom tap dancing again?” “What’s the link to that Moth performance you did last year?” When working 18-hour days and sleeping in bags and hammocks at the office, it is easy to mistake the time we spend together for quality time. Intentional celebration of each other reminds us of why we are friends, why we brought each other on in the first place, and makes us feel valued as people.
  3. Give everyone a space to play. When teams are small and money tight, every decision seems do or die. We forget that decisions can be made effectively without our input and try to embed our opinion into everything. A democratic vote does not need to be held every time the printer runs out of ink. To thrive, to feel valued, and to contribute to our full potential, we all need a place to play. We need an aspect of the business that is ours to run with, to own. You want to try the Lolly Wolly Doodle sales method? Go for it! You want to try to get a local politician to endorse us? Hell yeah! Give that space to each other, and don’t comment from the business. Comment as a curious friend.
  4. Pay each other. Whether a friend is coming on as a partner or for contract work, compensation needs to happen. We get so caught up in the excitement of our project and having our friend on board, that we forget that they are making sacrifices. Sometimes they forget as well! “Don’t worry about it, we’ll figure it out later.” Eventually, we realize, when the quality of their work diminishes or they start to drift away, both professionally and as a friend. Calling in favors is necessary, and ok in a pinch, but realize this is a quick way to loose friends if no favor is returned.
  5. Force each other to leave. The daily grind creates a myopic view. It feels so important to work all the time, but it detaches us from the real-world. When we leave the space we gain perspective. Leaving recharges us. It keeps us sane so that we return juiced to dive in, and allows us to release fears and tensions to others, instead of to our friends turned business partners. Often we are fighting the same battles. When my friend/partner laments to me about something that I am struggling with also, but cannot solve, it creates tension.
  6. Encourage each other to be healthy, even at the expense of the business. Sometimes, it is necessary to pull all nighters. Sometimes, there isn’t time for the gym or to cook a meal with real food. When our partners desire to do something healthy for themselves, we need to find a way to support them. There are enough times when we are going to sacrifice our health for the company that the few times we decide to speak up, we need to be each other’s biggest cheerleaders. “Sleep-in today. Don’t worry about that call. I’ll take it.” “Dude, I would love for you to teach me how to meditate someday. I think that’s such a cool thing you do.”
  7. Get mentors. Mom and Dad are great advisors. Investors are great advisors. Contractors and our romantic partners can be great advisors. However, they all have interest in the company. Mentors fill the need for completely unemotional objectivity. Mentors serve the role of “business partner” who you never brought on. Talking to someone outside the company, with no interest in its success, with no emotional bias because they love and care about you, and experience in the field, works. They tell you when you’re being crazy, and suggest ways to mitigate the craziness of your actual partners.

Until we are famous enough serial entrepreneurs, or have enough money to buy a team to surround ourselves with, we are going to do business with friends. The greatest ideas come from interactions with those whom we feel most comfortable to share our problems and insecurities with. They help us to solve them, which led to our businesses in the first place. Making sure we continue to provide this service to each other is what leads to successful companies.

Jared is the VP of Operations at Gilson Boards.

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