Start astartupIt is a challenging journey that requires not only an innovative idea but also the collaboration of people with complementary skills. Throughout your startup's journey, employees will be essential for developing the value proposition that your company intends to offer to the market.
However, besides the collaborators, there are other indispensable people in the growth of your startup: your partners. The choice of partners may seem simple, often intuitive, sometimes just convenient, but don't be fooled: the partner is a determining factor in the success or failure of a startup.
Data from the PitchBook platform,They highlight that 90% of startups launched last year failed. With that, just over $27 billion in venture capital was invested in 3,200 startups that failed in 2023, according to the study. So, to prevent your startup from becoming part of this statistic, choosing a good partner is essential.
- Complementarity of skills
The choice of partners with complementary skills is essential for the success of any startup. While one partner may be a tech genius, the other may have exceptional skills in marketing or finance. This complementarity allows the startup to address different aspects of the business with expertise, increasing efficiency and effectiveness in operations.
Consider a technology startup. One partner can be responsible for product development, while the other focuses on market strategies and fundraising. This division of responsibilities based on specific skills ensures that all critical aspects of the business are managed effectively.
An example of this is the case of Airbnb. Co-founders Brian Chesky and Joe Gebbia brought complementary skills to the company. Chesky, with his background in design, and Gebbia, with his expertise in marketing and user experience, complemented each other perfectly. He joined them Nathan Blecharczyk, a very skilled software engineer. This combination of skills was crucial for the development of an innovative platform and for creating a globally recognized brand.
- Alignment of values and vision
For a partnership to be successful, the startup's partners must share similar values and vision. Substantial differences in work ethic or strategic direction can cause conflicts harmful to the startup.
Partners with aligned visions tend to work better together, make more cohesive decisions, and navigate all the challenges involved in launching, growing, and expanding the startup. A clear alignment helps define the company's culture from the beginning, which tends to attract talents and investors who share the same vision.
A startup Quirky, founded in 2009, is an example of how lack of alignment among partners can lead to failure. Quirky was a platform that allowed inventors to submit product ideas, which were then developed and sold by the company. However, the partners had divergent views on the strategic direction of the business. While one partner wanted to focus on rapid growth and product diversification, the other believed that the organization should concentrate on a smaller number of high-quality products.
- Trust and transparency
Trust is the foundation of any successful business relationship. Therefore, for your startup to grow, the partners need to have trust. Partners who trust each other can delegate tasks more effectively, focus on their respective areas of expertise, and feel confident in their decisions.
Transparency in communications and operations is essential to build and maintain that trust. Regular meetings and open discussions about the company's state, challenges, and opportunities are recommended practices to foster a trusting environment.
A successful example where trust among partners was essential for the company's growth is the case of WhatsApp. A startup was founded by Jan Koum and Brian Acton in 2009. Koum and Acton had worked together at Yahoo! for nearly a decade before founding WhatsApp, which gave them a solid foundation of mutual trust that helped the startup grow and become one of the world's largest messaging apps.
- Resilience and mutual support
The path of a startup is full of challenges and twists. One hour your business might be on the verge of taking off, and the next on the verge of closing. Resilient partners who offer mutual support are more likely to overcome these obstacles. Team resilience strengthens the startup's ability to adapt to changes and continue growing.
In times of crisis, partners who support each other can make the difference between overcoming an obstacle or the collapse of the enterprise. This strong partnership provides the necessary strength to persist and find innovative solutions.
The history of Netflix is an excellent example of how resilience and mutual support among partners can lead to success. Founded by Reed Hastings and Marc Randolph in 1997, Netflix started as a DVD rental-by-mail service. In the early 2000s, the company faced significant challenges, including the dot-com bubble and intense competition from Blockbuster, the industry giant at the time.
Hastings and Randolph demonstrated incredible resilience and adaptability. In 2000, Hastings suggested selling the company to Blockbuster for $50 million, but the offer was rejected. Instead of giving up, they pivoted Netflix's business model to video streaming in 2007, anticipating a technological shift that would transform the way content was consumed.
The resilience of the founders was crucial in times of adversity. They kept their focus on innovation and adapting to market changes. This ability to overcome obstacles and continue to evolve was a key factor in the company's explosive growth.
Furthermore, Hastings and Randolph provided mutual support in strategic and operational decisions, strengthening the team and ensuring that the organization remained united during periods of crisis. Today, Netflix is one of the global leaders in video streaming, with millions of subscribers worldwide.
- Networking and Resources
Connected partners can bring valuable contacts and resources to the startup. This includes access to potential investors, clients, mentors, and strategic partners.
Partners with complementary networks can significantly expand the startup's reach. One partner may have significant connections in the technology industry, while another may be well-connected in the marketing or sales sector, creating a robust ecosystem of support and opportunities.
PayPal, co-founded by Peter Thiel, Max Levchin, and Elon Musk, is a perfect example of how the union of partners with an extensive network supports the growth of a startup. Peter Thiel brought an extensive network of contacts in the financial sector and venture capital. He is well-connected in Silicon Valley and has experience in investments and financial strategy, which helped PayPal secure funding and credibility in the market.
Max Levchin, on the other hand, is a tech genius with a deep understanding of cryptography and security. Your network of contacts is centered around technologists and developers, which was crucial for building PayPal's robust technical infrastructure. Elon Musk has a strong network of contacts in the tech industry and an exceptional ability to attract media and investor attention. Your ambitious vision and ability to create buzz helped position PayPal as an innovative and high-growth company.
- Workload distribution
The choice of partners allows for a balanced distribution of the workload. Starting and running a startup is a monumental task, and sharing responsibilities can prevent burnout and increase productivity.
Partners who share the workload evenly are able to focus better on their specific areas, ensuring that no aspect of the business is neglected. This results in a more efficient operation and more sustainable growth.
Zirtual was a company that offered virtual assistant services for busy clients. However, the division of responsibilities between the founders and the management team was not balanced. Maren Kate Donovan took on many of the critical responsibilities alone, including financial management, daily operations, and strategic leadership. This led to an overload of work and a lack of focus on essential areas such as finance and cost control.
In 2015, Zirtual had to abruptly suspend its operations due to serious financial problems and only continued operating because it was bought by Startups.co. The lack of a balanced workload division resulted in management errors and operational failures that could have been avoided with a more structured leadership team and responsibilities distributed more equitably.
Therefore, the choice of partners is one of the most critical decisions in the formation and growth of a startup. Partners with complementary skills, aligned values, mutual trust, resilience, and strong networks can significantly drive the growth and success of a startup. In a highly competitive business environment, the right partnership can be the difference that propels a startup to market leadership.
