The Common Denominator
I want to list for you a bunch of businesses and see if you catch a common denominator. Then I’ll share the point of this podcast.
Microsoft, Twitter, McDonald’s, Oracle, Uber, Proctor & Gamble, Hewlett Packer, Berkshire Hathaway, Facebook, Apple, AOL, Google, Yahoo, Disney, Intel, Wells Fargo, and General Electric.
Do you sense a pattern?
Well, yes they are really rich companies…
Yeah, yeah, these are… These are the heavyweights, but what’s the one common denominator that they all have?
They started with more than one founder. It was a partnership.
You know, I’m huge on partnerships and what I try to do is move the odds of success in your favor.
I’m always trying to move everything so that you have a better chance of succeeding. The common denominator of so many successful businesses is partnering.
So maybe it’s something you should consider more. These are some pretty smart people. Steve Jobs found the need to have a partner. Bill Gates saw a need to have a partner. Warren Buffet has a partner.
There is something in a partnership. There’s something unique and dynamic. I just did another partnership in business last week, I had people fly in from another part of the world, they spent five days with me and it was all involved in our discussing a partnership.
So, why do partnerships work? What’s special about them?
Well, I like that the fact that you combine resources so you have more talent. You have the combined skills and combined resources of what two or three people can put together.
I love the accountability. If I have a partner I’m accountable to fulfill certain responsibilities. And assuming I have a good partner, this person will hold me accountable.
Divide and Conquer
I’ve done this so many times where I’ll be like, “Listen I need you to stay here and work on this while I go handle this.”
I love the momentum that a partnership can create.
Ying & Yang
I love the fact that in partnerships, you get your flaws covered. Where I am strong, I typically want my partner to be weaker in those areas, but where I am weak, I want my partner to be strong in those areas.
E.g. Marketing is my thing. I don’t need somebody to be great at marketing.
Every idea in my head, initially, sounds brilliant until I put it into the fire of a conversation with one of my business partners and then I see flaws in it. I see something I’ve missed. Or they just improve it or they just fan the flame and say, “that’s fantastic.”
There’s just no downside of it. The reason why partnerships work is you have combined resources, accountability, you can divide and conquer, you create momentum, you can cover the flaws of one of the weaker partners, and you’re great collaboration.
When Partnerships Don’t Work
They Don’t Bring Value
Partnerships don’t work when someone doesn’t bring value to this partnership. They don’t bring time, a resource, expertise, or capital (if needed).
I don’t need capital anymore. I need partner expertise and I need their time. When you cut a check for the partners, whatever the split is, you want to make sure when they’re getting a check, you know why they got that check. And on the other side of that, when I get a check written to me, I want them to feel good about writing that check to me.
Partnerships don’t work if a partner doesn’t bring value.
They Don’t Share the Same Vision
If you don’t share how the future of this company looks you’re never going to agree on anything. When I start a partnership, I share with my new partner what I see the company a year from now, five years from now, 10 years from now. Typically when I start a partnership, my vision is normally far greater than theirs. This is their first start-up.
So it’s important that we have the same vision because if we don’t, we’re going in two different directions.They may become very content once they hit six figures. Well, six figures don’t impress me anymore.
They need to have the same vision as you.
Low Risk Tolerance
My risk tolerance is far greater than that of a new partner. They’re just happy to make a paycheck sometimes and typically they’re going to make more money than they’ve ever made. So when I want to put some of our profits back into the business and we don’t share the same vision and we don’t have the same risk tolerance, there’s going to be a Tug O’ War here. I know that risk brings reward. Obviously, this is calculated risk, but again, there’s risk tolerance.
They Don’t Share Your Core Values
If I have a business partner and the way that that person speaks to our staff is not in any way that I would promote or endorse then we’re going to have a problem. Our value in regards to giving with company profit is generous. I want to be involved in our community. If you don’t have the same core values, we’re going to have a problem.
Lack of Rules of Engagement
I have kind of an unwritten rule with my business partners that if I want to take a risk, whether you agree with it or you don’t agree with it, I can overrule you. My 25 years in business allows me to say no.
We’re going to take this risk, I understand what you said and I may modify it a little bit, but no, I think to grow the company we need to move forward in this direction.
So that’s a rule of engagement that I’ve established.
Here’s another. When you write yourself a check, my check matches yours because I give all my business partners complete check-writing privileges, but we do have a rule. I better not hear from the CPA that you’ve written yourself three checks and I didn’t get three matching checks on my desk. However you cut a check for yourself, mine must be the same.
I love business partnerships, and I shared with you how they’re the common denominator of so many successful companies. I also shared with you why they work and why they don’t work sometimes.
I’ve always said “I’d rather have half of a lot than 100% of a little. Steve Jobs says “Great things in business are never done by one person, they are done by a team of people”.
You want to get your start-up journey moving in the right direction. You want to increase chance of a more successful startup.