There are many unwritten rules about startups: know when it's time to pivot your business model, don't let your spending get ahead of the opportunity, know your market, don't go into business with friends.
Pump the brakes on that last one.
Florian Hubner and David Federhen would beg to differ. The two childhood friends are co-founders of Uberall, a software and services company that specializes in location marketing (helping to bring local customers to local businesses). The company hit $25 million in revenue in 2018 and is growing 100 percent year over year. Recently it received $50 million in funding, and the company already has an acquisition under its belt.
Hubner shared with me the secret to defying the odds and building a booming business with of all things, (gasp) a very close friend. He understands the stigma on going into business with friends and while he offered the disclaimer that it is indeed not for everyone, he shared how he and David (and any set of friends) can make it work.
If these five things are true, you can beat the odds.
1. Before joining forces be honest and critical about your friend's strengths.
Especially when it comes to resilience and resourcefulness. Having a friend who crumbles in the face of adversity can put the business, and the friendship, at risk. And as any startup can tell you, resourcefulness is the spark that gets the engine humming. If there are two co-founders, your ability to adapt on the fly is literally cut in half if one of the founders attempts to carry the full load on this front.
Hubner clarified that it can be very difficult to be honest about your friend's shortfalls because we all want to put our friends in the best light. But the importance of doing so multiplies in times of crisis.
The two founders faced a moment early in their entrepreneurial careers where they had to pivot their business to what Uberall is today, essentially starting from scratch and letting down some investors. It took courage, trust, and strength. If your business partner doesn't have that--you may perish versus pivot.
Which brings us to the next point.
2. Choose complementary over common skill sets.
Sounds like common sense but it's so often overlooked. Our first tendency is to be drawn to those like us. It can give a sense of comfort, especially compelling for the entrepreneur heading into scary, uncharted waters.
Now, of course, you're friends with someone in the first place because of commonalities. The point is to be thorough in understanding beyond those commonalities what skills they have that will work well in tandem with yours in the context of launching a startup. Two peas in a pod may not create the next Peapod (or Lyft, or Lime, etc.).
Some of the quickest "fizz-outs" I know of among my startup community friends can definitely place at least some of the blame on the co-founders being confoundingly too much alike.
3. Know how to leverage the advantages of friendship versus just worrying about the disadvantages.
Friends can move fast. Hubner focuses on engineering, Federhen on the business side. Because they've been friends for so long, each literally knows where the other is coming from. They don't need a lot of time to align on direction or how to do things. They know what to expect from one another and need few words. There's very little frustration in not being understood.
It gives them speed, and confidence, in decision making.
4. Be in business for the same reason.
Both founders started their company to work with smart, motivated, fun people. They wanted to start a business where they could do anything if it made sense--and they stick to that, without an overly strict or "traditional" definition of what success looks like.
I've seen this in many startups and in the corporate world myself. If you aren't starting with a collective feeling of what everyone is after, you won't even get halfway there.
5. Leverage the friendship to face crisis together and to celebrate together.
Wouldn't you rather face really tough times with someone you call a real friend? And isn't it more fun to celebrate the good times with your friends? Don't forget either of these things because being an entrepreneur will provide plenty of chances to do both. My wife (and best friend) is my business partner and I can't think of anyone else I'd rather hit the high's and lows with.
So conventional wisdom isn't always wise. You can beat the odds with your bestie if you follow this advice.