How To Start a Company With Your Best Friend And Save Your Friendship
Going to war together — when done correctly — can build closeness rather than resentment
Navigating the stress of entrepreneurship takes a toll on the cofounder partnership.
Research shows that 65 percent of startups fail due to interpersonal issues between the founders. But these pressures to meet and exceed high expectations do not need to erode the friendships that started the company in the first place.
When navigated correctly, the conflicts inherent in any authentic partnership can lead to greater insight, self-awareness, and support.
As a cofounder psychologist, I’ve worked with a range of international clients. Some are solo founders wanting a place to discuss their fears without repercussions, others are seasoned entrepreneurs wanting to re-align after a disagreement, and others are early-stage founders who just secured funding and want to set the cultural tone for the organization prior to mass-hiring.
But regardless of situation, many founders start their venture with an idea. And those ideas are often co-created in friendships.
Unlike individuals who met with the sole purpose of starting a business together, many younger entrepreneurs enter into a partnership with a founder who is also a friend. They have years of history together. And they want to maintain that relationship despite the difficulties encountered on their journey to success.
But as any real entrepreneur will attest, that journey is far from linear.
Shifting the relationship from “friends that stumbled on an amazing idea” to “partners building an organization” is a tough transition that not every relationship can make.
To be successful at this transition, you must possess a mutual willingness to discuss the distinct differences between “friendship” and “business,” and identify the areas of overlap.
Here are eight simple tips to maintain your friendship while building a startup:
1. Don’t avoid conflict — talk about it immediately
Often, friends have ways to avoid conflict or pass through difficult emotional territory with a sense of relative ease. Time has taught them how to take the time and space they need to cool down and deliver a message that the other can hear.
But when your friend is also your business partner, you’ll have much less time apart. If you maintain the same pattern of avoidance and/or indirect discussion of difficulties, it will create resentment and blowups under the stress of scaling.
Instead, start making disagreements a normal part of your communication. Encourage one another to share divergent perspectives and practice addressing conflicts when they occur.
2. Develop a habit of keeping business conversations about business
Separating the personal from the business can be helpful. Doing so allows you to have more focused business conversations that lead to greater productivity and clearer communication.
That’s not to say that you can’t check in and bool prior to engaging in important conversation — there’s no reason to be cold or impersonal — but adding a bit of structure here helps, especially as your organization grows and time constraints become more apparent.
3. Provide ongoing feedback in sessions focused on your relationship
Out of my roster, founders with the most supportive connections schedule meetings once per week to discuss their relationships.
This intentional time to check-in with one another and share feedback about how the personal and professional relationship is going gives each person an opportunity to release any emotional tension that’s built up during the week.
4. Build a community of people who can relate with your experiences
Entrepreneurs often feel like they’re in a vacuum — that no one can understand their experiences.
And while there’s some truth to that — no one can comprehend exactly what it’s like to live in your shoes — building a support network of people who have similar experiences can be a helpful source of support.
Connecting with like-minded individuals can alleviate some of the tension placed on your cofounder.
5. Continue scheduling activities that bring you together
If your friendship is a fire, it still needs fuel to continue burning.
Make time to disconnect and tend to your relationship. Engage in activities that used to bring you joy, even if it’s for a few hours on a weekend. This way of engaging re-energizes your friendship, which will be needed during exhausting stretches of building.
6. Prioritize taking breaks from one another — ask for space when needed
You need breaks from each other and the business.
Though you’ll never fully detach in the same way you did prior to starting your company, forcing yourself to take time away will greatly benefit you and your cofounder relationship.
Stepping back helps you zoom out and regain perspective. It gives you time to re-connect with yourself. And it reduces dependent dynamics that might otherwise reduce business efficiency.
7. Limit the number of calls you have in a day and specify your time off
Boundaries often need to be shifted in these friends-to-cofounder pairings.
Without adding structure, both individuals feel like a passive victim to the day’s tasks, caught in the chaotic storm of non-stop calls.
Don’t let that be your life.
It’s not worth it. And it will detract from your productivity and decision-making.
8. Over-communicate during rough times and practice appreciation
Anticipate that there will be long-standing periods of tension between you. That’s inevitable in any close relationship, especially one that undergoes near-constant change and external pressure.
How you manage conflict is more important than the conflict itself.
Within the boundaries you’ve established, share more about your emotional reactions than you may during other time periods. Those emotional needs and frustrations are likely amplified anyway, voicing them increases direct communication and decreases avoidance that leads to long-term resentment.
And regardless of the time period, practice naming your appreciation for the other person. That acknowledgment offers a benefit for the person sharing, as they tend to become more aware of their partner’s positive contributions, and the person receiving, as they feel appreciated and seen for their efforts.
To better understand how this works in practice, read this case study
Names and details changed to maintain confidentiality.
Chase and Robert met in college and bonded over a passion for art. They spent time together on weekends and then lived together during their last year of undergraduate. They went their separate ways after graduation.
Chase pursued marketing, Robert went into sales.
Chase moved north, Robert moved south.
Four years later, both were dissatisfied in their current roles. And that’s when they had a great idea for a service company.
They started the company as a side project and then, after seeing its potential, quit their jobs to work full time together. Robert ran the sales department, Chase ran the service team. In three years, they grew from a two-man shop to 20 employees and surpassed $2 million in annual recurring revenue.
However, during the last year of business, they had several disagreements that escalated to a point that threatened their friendship.
Disagreeing on hiring decisions was the tip of the iceberg.
Under the surface, Chase felt that Robert was underperforming in his role with the sales team. Chase began losing sleep after hearing how his friend showed up in calls with other employees — often disgruntled, agitated, and unsupportive.
He wasn’t sure what to say — he didn’t want to hurt Robert’s feelings. After all, they were close friends for a number of years and he didn’t want to damage the friendship — but Robert’s behavior was having a toxic impact on the company culture and the performance of the sales team.
In near-constant communication with one another straddled between time-zones, Chase woke up feeling overwhelmed to multiple calls and texts from Robert, who was two hours ahead.
This led Chase to feel burned at both ends: He didn’t feel supported by his partner — he felt overwhelmed — and he felt unable to say anything about Robert’s poor performance.
Their lack of boundaries and poor communication had a negative impact on both individuals and a negative influence on their entire organization.
Employees felt that Robert detracted from their happiness, which contributed to back-channeling about Robert’s behavior. Chase felt even more worried about their wellbeing, but was afraid to give feedback.
Internalizing these feelings increased his anger, and as this resentment built, he felt less and less able to share it because it felt dangerous to his friendship.
The solution was straightforward:
Chase needed to give Robert feedback about how his behavior was impacting the team rather than back-channeling
Robert needed permission to share his frustration with the business not meeting his expectations of a lofty exit, which contributed to his discontentment
Each needed to clarify their expectations for the company’s long-term goals and exit strategy
Both needed to add structure — limiting the windows of communication so that Robert can feel supported andChase can have a sustainable morning routine
Robert needed to develop greater support systems outside of his relationship with Chase
Both needed to reduce near-constant communication that intermixed their personal and professional relationships into separate, contained times
And both needed to express appreciation: They chose to partner with each other for a reason — and that reason was often getting overshadowed by conflict
Over a period of nine months, we were able to make those changes. And, despite downsizing the company, their friendship is stronger than ever.
Friendships that develop into cofounder partnerships are complicated. They often involve balancing emotional and business-related needs, which leads to tension in difficult moments.
Use the list above to generate meaningful conversation and contact a cofounder psychologist to prioritize maintaining this most important relationship.