You think a partnership is a good idea. You are probably wrong. This is why.
So you found the perfect complement to your business. They have the answers, skills, or resources you don’t. That would seem like a perfect reason to take on a partner. But it’s not. Many experts say that over 50% of partnerships fail. My anecdotal information is that I don’t know of one partnership that succeeded. Here are a few reasons why.
The Pareto Principle
We’ve all heard of the Pareto Principle, or the 80/20 rule. One aspect is that 80% of the work is done by 20% of the people. The question becomes, how do you know that both of you are 20% people? The answer is, you don’t. You both may be in the 80% group and do little. The business will fail if this is the case. If one of you are a 20%er and the other isn’t, the relationship should fail. Someone is being taken advantage of in this scenario. The odds are that you both are not in the 20%, and if you are your struggles have just begun.
With two driven and well-focused individuals, each will have a level of disagreeableness. This isn’t a bad thing. Disagreeableness is one of what psychologists call the Big 5, or 5 main personality traits. Disagreeableness isn’t a bad thing. You have to be a bit disagreeable to quit your job and strike out on your own. It doesn’t mean you are hard to get along with, it means you are willing to challenge the status quo. This challenging nature we find in many entrepreneurs makes it very difficult for two to agree on most things. But it also makes it tough for either of them to back down, even if the other is right.
Even if you both make the same amount of money, you perceive it differently. Suppose a doctor becomes partners with a nurse. If the business pays them both $200,000 per year they will perceive the wage differently. The doctor may have taken a massive payout and she could be wondering if the business will even work. On the other hand, the nurse is thrilled with his income and wants to maintain it as long as possible. No one is equal. We all come from a different perspective and it is really hard to balance dissimilar perspectives.
We are all screwed up. I am, you are and so is your potential partner. We all have quirks and oddities in our personality and they bump into each other from time to time. In this video I explain what happened between myself and my two previous partners that I never saw coming.
Rolling stone did an interview with Bernie Taupin who describes his partnership with Elton John here. But unless you have that type of relationship with someone, and even if you do, the odds are that your partnership won’t last. The likelyhood of your business failing are stacked against you already. Don’t add another layer of difficulty.