Thursday, June 30, 2011


Is it OK to start a company with your best friend? This topic seems to come up a lot, as though it is a litmus test for whether a company will be successful.

Last night I was at Unreasonable Institute and heard Daniel Epstein* interview David Kyle. This topic came up, and while I can't remember the exchange verbatim, it went something like this:

David: "you need to be careful about starting a venture with your friends. Sometimes the things that need to be said, don't get said because of the friendship. And you want diverse viewpoints and experiences, which may not happen with friends. If you do start a company with friends, get the roles defined. A lot of companies that get started by friends end up not being companies and not being friends."

Daniel: "well you know Unreasonable Institute was started by 3 friends, and I don't think we would have started it, or kept it going, without each other."

This month's Fast Company features some famous "best friend founders," listing Bill & Dave, as well as Cohen & Greenfield.** And there is also the case of starting companies with people you don't know real well, but with whom you become friends by virtue of starting and building things together (these often seem to become very strong friendships).

Who's right? Both. Neither. It depends.

The conventional wisdom (be careful about friends) is good advice if you want to solve a problem, get it funded by outside investors and sell. Perhaps some expertise is really critical, and you don't have friends that have it (or can develop it in time). On the other hand, if you are the kind of people that do well by making commitments to people you care about, can sacrifice somewhat equally in the early days, are willing to learn on the job, and think it would be cool to work with these people for many years (why sell the company when we are having so much fun together?), then go for it.

I can't think of a more important question to ask when starting a start up than "who am I starting it with?" There are some of my friends who would be great to start companies with, and others, well, not so much.

I think it is fine to start a company with a good co-founder that happens to be your friend. Just be sure they meet the test for being a good co-founder, not just the test of being a good friend. Start with character- are they honest, passionate and hard working? Then look at results- have they produced, and are they demonstrably good at things they care about? Next- do you work well together? Ask yourself- what challenging things have we done together, and how did that go? Is your potential co-founder friend still making the cut? Want more?

As with many of these issues around start ups, there are multiple "right" ways (and wrong ways) to do it.*** Despite many attempts, there isn't a cook book that guarantees a successful venture. As with the many early, important issues you face, I think the best approach is to think of them as design constraints. If you found a company with friends, what are the pros and cons? How can you work through them? These are definitely worth thinking through and discussing with your co-founders and mentors, and that may help you with the decision, too.

If you do it well, you might just get a BFFF (best founder friend forever).
* btw, Daniel is getting to be a pretty smooth interviewer (at least if he has good material to work with), what with practicing every night. Charlie Rose better watch out.
**bet you clicked the link just to check.
*** personally, I think it's unlikely I'd be a co-founder of another company unless it is with a friend (or at least long time acquaintance). But never say never.

Saturday, June 11, 2011

Funding Ob-Seth-sion

I had been working on a post about building companies vs. "getting funded." Entrepreneurs sometimes get confused about which is the goal, and which is a side-benefit. They confuse correlation with causation. When I ask "what do you need?" or "what are you working on?"... I often hear about funding.*

Building a company sometimes requires outside funding.** For these, funding is one of many activities that founders need to pursue. But the focus needs to be on fixing what sucks. That is the purpose of your enterprise, not getting funded. It is finding something that needs fixing, and building an enterprise to do that, that results in funding. Not the other way around.

But I don't need to write that post anymore, because Seth Godin did. Right here.
* So I just ask a second question- what will you use the money for? Then we can discuss the many options they might use to obtain those resources.
** This depends on your business model design. Many good companies get built without outside funding. I'd encourage you to prototype several bootstrapped business models for your venture so you understand your options.

Thursday, June 02, 2011

Happy Fifth Anniversary to my Blog or... JULIA ROBERTS, SEX! AND 8 THINGS EVERYONE SHOULD KNOW!

Wow. I just realized on Monday that my blog is now 5 years old (not all blogs have this staying power). To celebrate, I have actually gone back and separated out the posts in the early years (blogger in the early years didn't do this easily), so that it is easier to find old posts (though I should have started this blog on wordpress, which would have been more user friendly*). I also reread a number of my old posts as I did this.

This has led me to the following THINGS EVERYONE SHOULD KNOW about me and this blog:

1) I still mostly agree with myself and find my early naivete and optimism to be amusing and refreshing. I also laugh at my own jokes.

2) The fields of BOP focused business and social entrepreneurship are progressing. In the early days, there wasn't much written and there were few conferences. Now it is hard (e.g., impossible for me) to keep up with the many books, articles and events.

3) I still have little idea of who the thousands of people are who read my blog every month. Commenting on blogs seems to be "so 2007." In any event, thank you. I hope my thoughts are useful to you. And I hope that many of you are "BOPreneurs" (or at least proto-BOPreneurs).

4) If you want to increase your readership, use titles such as "10 steps to...", "Ten Tips on...", "8 Things Everyone Needs to Know about... " or make references to sex and/or celebrities (I never anticipated that Julia Roberts would become the spokesperson for clean cookstoves).**

5) The way people come to my blog has changed. Used to be google and RSS. Now it is twitter and facebook.

6) I don't post as often as I used to. Part of this is that I have said what I have to say on what I view as key topics. And part of this is that I have less time. And part is I am now exploring impact investing more deeply... my guess is that more future posts will be on this topic. But I will leave BOPvestor blog to someone else (Ross? Rob?).

7) I started this blog to share my thoughts and learnings about my core belief that entrepreneurship is a powerful force for positive change in the world. From the beginning, my focus*** has been "to share experiences and opinions about the BOP, entrepreneurship, investing, philanthropy, sustainability, teaching, innovation, design or whatever I feel like." This focused approach seems to be working so far.

8) I still plan to write "longer than average" posts. Sorry, Nathaneal. I also hope to have more guest posts. (Ben Lyon, if you are reading this, you still owe me).

For twitter followers and facebook friends, this week I will be bringing back a few of my posts from the vaults. Looking back, some seem prescient, some misguided... and most unrepentantly optimistic.
*Except I had no clue what I was doing. As in many things, I just started, and figured it out as I went.
**The title of this post could have worked in a sex theme too, but I just won't stoop that low on the 5th anniversary.
*** Use of intentional irony. Times two.