Getting By with a Little Help from Their Friends
Many young entrepreneurs enlist partners to start their companies, rather than trying to go it alone. So what's the downside?
Every year, our 30 Under 30 list is populated by a number of companies that were started by partners. But this year, more than two-thirds of the entrepreneurs we feature launched their ventures with one or more co-founders. Curiously, I came up with almost the same number when I surveyed the people I interviewed for my new book, Upstarts! How GenY Entrepreneurs Are Rocking the World of Business. Sixty-four percent had started their companies with partners. So what's going on here?
Generation Y seems to thrive on teamwork and to crave social interaction, so it's no wonder that solo founders are less common than partnerships. But it's not just that these young entrepreneurs want company -- many seem to know what they don't know and are not a bit afraid to acknowledge the gaps in their skill sets. And if those gaps can be filled by a childhood friend, a classmate, or a spouse, so much the better.
"We never would have survived this long if there hadn't been multiple founders with different areas of expertise," says Michael Seibel, the CEO of Justin.TV. "I run the business side of the company, including investor relations; Justin runs the product management and vision; Emmett runs the web and API development teams; and Kyle runs the backend operations."
A single founder wears all hats, but a partner has the luxury of wearing only the ones that fit best. "Having Eric involved allows me to focus on the parts of the business that I really love and am good at, like the creative side," says Susan Gregg Koger, the CEO of ModCloth, of her husband. "Eric takes care of the day to day [including human resources, finance, and technology] that I'm neither good at or passionate about."
But partnerships can get tricky as well. They often function well enough in the heady start-up days, but can begin to deteriorate under the harsh light of actually running a company. The most common glitches: one partner feels that another is not pulling his or her weight; roles becomes confused as partners encroach upon one another's areas of expertise; and as the company grows, the founders develop different visions of success. "In a start-up, things evolve quickly," says Emily Olson of Foodzie, "and you have to make sure your co-founders are on the same page."
Of course, you can start out on the same page and end up switching to entirely different books halfway through. Our 30 Under 30 honorees seem to understand that, and most say that they had (wisely!) laid out the terms of their partnerships in formal legal documents. "When our business was in it's infancy, Austin's father said that it was imperative for us to define the terms of our partnership and to create the terms for the dissolution of our company," says Peter Smathers Carter of Smathers & Branson. "Though we haven't looked at those documents since our company was formed, it was great advice. No matter how great friends you are, you never know what type of business partner your best friend will be."
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Donna Fenn
Since being featured on our 30 Under 30 list, Mint.com founder Aaron Patzer sold his company for $170 million, College Hunks Hauling Junk founders Nick Friedman and Omar Soliman faced off with investors on national TV, and Phreesia founders Chaim Indig and Evan Roberts raised close to $12 million in venture capital. How are some of our other previous honorees faring? We asked them to share the latest developments about themselves and their companies. Here's what they had to say.
