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When you think of the gold standards of business partnerships, several come quickly to mind: Hewlett and Packard, Jobs and Wozniak, Gates and Allen, Cuban and Wagner, Larry and Sergey, Ben and Jerry. All were forged in various ways by shared passion, skill, vision, planning, effort and—sometimes—opportune timing.
While it may be difficult to find that diamond-in-the-rough alter ego to help launch a new technological era or establish an ice cream empire that sets the bar for socially conscious business, it’s likely that you can find the right person to help you craft a successful business. It just takes a plan, time and due diligence.
Lawrence Gelburd, a “recovering entrepreneur,” consultant, and lecturer at the Wharton School at the University of Pennsylvania, has seen successful partnerships forged time and again. Gelburd has had an extensive career in the technology and music sectors (The Huffington Post christened the part-time record producer “The Rock ’n’ Roll Professor”—although he’s quick to note he is not a professor—when it added him to its well-sourced AOL Small Business Board of Directors).
He says an entrepreneur may need a partner’s help in various content areas—strategic management, finance, marketing, sales, legal and day-to-day operations. This talent may be in the entrepreneur’s existing contact pool—part of a methodical planning approach should be writing down a list of all potential resources—but the right partner may not be a single individual or a traditional business partner at all. “You may have people who have overlapping skills; you need to cherry-pick the talents of the right people,” Gelburd says. “Some of these people can be spouses and other relatives. I’m also a huge fan of advisory boards, because they generally have no legal liability for what the company does and may feel that they are freer to participate.”
While taking advantage of the wisdom of all your connections, you want to be cognizant of boundaries. “For all your mentors and mentees, including friends and family members, give them control of an emergency brake where they can stop the conversations and be respectful of their time. The permission to interrupt empowers them,” Gelburd says.
You also want to be on the lookout for potential partners—whether you are pursuing your first entrepreneurial effort or are a veteran. Every time you meet with someone who could be a mentor or mentee, ask yourself what you can do for that person, even if he or she is way ahead of you professionally, Gelburd says. “What can happen is, you can start off being a mentor or having someone mentoring you, and the roles can be reversed.”
The entrepreneurial success stories that have become American business lore show there is no one partnership shoe that fits all, although each has common laces that trail back to the fundamentals Gelburd espouses. Gelburd, who helped launch the custom engineering and consulting group American Auto-Matrix in 1979, says most successful founder relationships feature complementary skills rather than unanimity.
“My best friend and I started my first company [American Auto-Matrix]—we have known each other since we were 5, and we are still best friends. We knew almost everything there is to know about each other before we went into business together—all the weaknesses and strengths. We were both nerds, but I was better socially and he was better privately. I was more of a schmoozer in presentations or during social events. Instead of making us both into something we weren’t, we divided and conquered using our best skill sets.
“If you both have all the same skill sets, it can work but I’ve seen it more often the other way,” he says. “The perfect partnership is one where there is earned trust, valuable expertise and flexibility.”
The HP Way
Certainly the most famous of the many notable Silicon Valley success stories involves William Hewlett and David Packard, who founded Hewlett-Packard in 1939. Although the largest personal computer maker now struggles with slumping sales and a sagging stock price in a shifting technology market, the “HP Way” laid the groundwork for high-tech innovation synonymous with the Northern California tech hotbed.
Hewlett and Packard met at Stanford University and forged a fast friendship that included a shared love of electronics and the outdoors. Their visionary management style showed sensitivity to their employees’ needs and gave their workers the chance to be creative in solving technical and business problems. The duo set up shop in a now-famous Palo Alto garage and flipped a coin to see whose name would come first in the company papers (Dave actually won the flip, and elected to defer to Hewlett-Packard).
“Dave and I recognized from the start that invention was the lifeblood of our community,” Hewlett said in accepting an MIT-sponsored Lifetime Achievement award in 1995. “We tried to develop an atmosphere that encourages creativity and innovation—a place where people are enthusiastic about their work, where they are unfettered by bureaucracy and where their contributions are recognized.”
The well-documented history of their careers illustrates the respect they had for each other and how they leveraged their individual strengths. They often remarked that they almost knew what the other was thinking.
“Hewlett and Packard were a great pair,” Gelburd says. “They created a wonderful corporate culture because they hated the culture at GE [where each had previously worked]. They created this place that was the opposite of the one they didn’t like.”
Turning Complementary Skills into Billions
Mark Cuban and Todd Wagner became poster boys for the anything-is-possible technology explosion in the late 1990s.
The story is so familiar today, about how the fervent Indiana University transplants to Dallas created a way to listen to Hoosier basketball games over the Internet and turned streaming audio and video into a billion-dollar payday when they sold the resulting company, Broadcast.com, to Yahoo for $5.7 billion in common stock and options.
The partnership has continued in various successful enterprises—HD-Net, 2929 Entertainment—although each has his own pursuits as well. Cuban says they work well together because they “have completely different skill sets.” Wagner, the lawyer, is bottom-line- and detail-oriented, and prefers not to be in the spotlight. Cuban, the gearhead, marketer and National Basketball Association franchise owner, is high-profile. What they share is a competitive fire.
“Our relationship hasn’t changed all that much beyond the fact that we typically aren’t involved with day-to-day operations” anymore, Cuban said in a recent email exchange. “We still trust each other’s opinions and recognize each other’s unique skills.”
Cuban says his involvement with ABC’s Shark Tank (a panel of five “sharks” evaluates and bids on pitches from contestant entrepreneurs) has affirmed in his mind that “the entrepreneurial spirit is alive and well, and that anyone still can be a successful businessperson in our amazing country.” He says there are three crucial things an entrepreneur should consider when searching for a partner: “What will each partner bring to the table? How will you deal with issues that you have polar-opposite opinions on? And how will you walk away when you want to rip each other’s throats out?”
Moving the World Forward
An odd couple if there ever was one, Steve Jobs and Steve Wozniak were bright yet scruffy Northern California kids in their 20s who lacked any business training or college degrees when they kicked off a technological revolution on April Fools’ Day 1976 by signing papers forming Apple Computer. Sometimes lost in the telling, however, is the lot of the third April Fools’ partner, Ron Wayne, a former Atari colleague of Jobs, who fled the deal 12 days later because he decided the financial risk was too great.
Wozniak’s brilliance and Jobs’ dogged determination were the engines that made Apple.
“I was turned on that little guys were going to do something of more value than the big corporations,” Wozniak recalled in January 2010. “My friend Steve Jobs… he was always interested in doing things that would change the world. He was a move-the-world-forward kind of guy.”
Woz ultimately realized he wasn’t as fanatical as his partner and left the company in 1985 (less than two weeks later Wozniak and Jobs were jointly awarded the National Medal of Technology by President Reagan). They remained friends who consulted with each other often as Jobs left and returned to Apple. Jobs died this past year, but their legacy lives on as founders of the largest company in the world.
“When you can have a partnership that can last that long and have that kind of impact, it’s very exciting,” Gelburd says. “And a partnership like that of Jobs and Wozniak doesn’t have to last forever; it just has to last until the right time. You just have to be open and honest with your partners.”
A Basic Drive to Succeed
Bill Gates and Paul Allen reportedly first encountered each other at a computer club meeting about BASIC programming at Seattle’s private Lakeside School in 1968. Six years later, Gates was enrolled at Harvard University and Allen was working for Honeywell when they came up with a BASIC platform for the Altair 8800 computer in Gates’ dorm room. A year later, Gates dropped out and the two men established Microsoft.
Because most of Microsoft’s meteoric growth occurred after Allen left the company in 1983, he’s sometimes seen as the lesser partner in Microsoft lore. But both men were extraordinarily driven, competitive, creative and brilliant.
In his book, Paul Allen: Idea Man (Portfolio/Penguin, 2011), Allen describes how he and Gates would get so excited when they talked, leaping from one subject to another in conversations they called “popping up the stack,” that outsiders probably thought they were speaking gibberish. They also had combustible exchanges. “I was Mr. Slow Burn, like Walter Matthau to Bill’s Jack Lemmon,” Allen said in a 2011 Vanity Fair article adapted from his book.
Spreading the Wings to Fly
Colleen Barrett was a Houston legal secretary when her boss, Herb Kelleher, took a leave of absence in 1971 to help launch a Texas-based airline in a deal conceptualized with a sketch on a cocktail napkin several years earlier. That leave of absence never ended for either of them, and their evolving partnership built the textbook servant leadership corporation (Kelleher would become preseident and CEO by 1982).
“Herb was raised by a strong mother who pounded into him the golden rule: Treat others as you would like to be treated,” Barrett would say years later. “I was raised the same way. When I went to work for him as a secretary at his law firm, that’s how he ran his firm and that’s what we took with us to Southwest. It’s very basic and simple.”
Herb was the outrageous spokesman, the visionary thinker, passionate for the cause. Barrett was the people person, the keeper of the Southwest culture. “Herb was our co-leader, the genius thinker,” Barrett told a Wharton School conference in 2008. “I was the plodder, the completer, finisher.”
Barrett moved through a series of titles before becoming company president. In 2008 Kelleher was named chairman emeritus and Barrett was named president emeritus, formally turning over the reins of the company.
How to Get to Sesame Street
Children’s Television Workshop pioneer Joan Ganz Cooney began creating TV programming while working as a documentary producer for public television in the early 1960s. She thought television could succeed as a teaching medium, establishing CTW in 1968.
During preparations for an educational show called Sesame Street, she spotted puppeteer Jim Henson and his puppets on local television ads and decided “if we can’t get Jim Henson, we won’t use any puppets at all.”
Henson had started his television career while still in high school, performing puppets on a local Washington, D.C., Saturday morning program on WTOP-TV. He had gone on to do projects geared toward adult audiences and was initially reluctant to return to children’s subjects.
But Cooney persevered and won Henson over. The characters he created—Ernie and Bert, Oscar the Grouch, Grover, Cookie Monster, and the 8-foot-2 Big Bird—continue to entertain and educate more than 40 years later.
Success by the Scoopful
Ben Cohen met Jerry Greenfield in 1963 during a seventh-grade gym class. The Merrick, N.Y., youths cemented a fast friendship and followed a number of life detours long before they paid $5 for a correspondence course in ice cream making.
Their search for a warm-weather college town without an ice cream parlor proved futile, so they settled on Burlington, Vt., home of the University of Vermont. They opened their first Ben & Jerry’s Homemade store there in a renovated gas station. Their wild flavors and big portions were a hit, and it was not long before they started expanding. They sold their company in 2000, but not before building a model corporate citizen. Early on, Ben & Jerry’s donated 7.5 percent of its annual profits to small community projects and incorporated political stands into its product offerings through the use of hormone-free milk and selling products such as chocolate-coated Peace Pops. As the company grew, it broadened its scope. In 1985, Ben & Jerry’s formed a foundation that awards about $1.8 million annually to eligible organizations across the country and in Vermont. The philanthropy is “employee-led by non-management employee advisory groups who consider proposals and recommend grants.”
“We measured our success not just by how much money we made, but by how much we contributed to the community,” Greenfield likes to say. “It was a two-part bottom line.”
Searching for Common Ground
The “Thomas Edisons of the Internet,” Larry Page and Sergey Brin came from different spots on the globe but from similarly educated, tech-oriented families.
They met in 1995 when Moscow-born Brin showed Michigan native Page, a prospective grad student, around Stanford University. They reportedly found themselves at odds during the tour. It wasn’t until later, when they worked on a research project together, that they found they had similar tech backgrounds and interests, and worked well together.
Both born to university professors, they excelled with computers while very young. In college, they found a common interest in mining data. Their personalities balanced each other—Brin was more gregarious and outgoing, while Page was measured and quiet. The proprietary algorithm for a search engine they created in a college dorm room was registered in 1997 as Google.com, which a Portfolio columnist aptly named “the Swiss Army knife of information retrieval.”
Back to the Future
So how does an entrepreneur find his or her own Sergey, Woz or Todd?
Gelburd is a firm believer in being a resource for people, and the good will it can foster. Among his resources today are two former students whom he nurtured at the beginning of their careers—successful Broadway producer Vivek Tiwary and Jason Kothari, who helped bring the Valiant comic book library out of bankruptcy and into strong sales and movie development.
“I never [helped] either of them because I expected them to be successful and hoped to benefit from it,” Gelburd says. “I did it because it was the right thing, but it proved to be a big boon for me because they became so successful. The time you invest in people can later be very valuable back to you.”
Gelburd says he encounters a lot of students and clients who are looking for people to help them write their business plans and invest in their ideas but are paranoid about getting ripped off.
“It’s a healthy paranoia. Trust is something that can’t be gained overnight, and if you give it overnight, you can put yourself in a high-risk situation. I’ve spent my adult life trying to stay away from cynicism while being skeptical. There’s a difference. The world keeps pulling me toward cynical, and that’s why I think we need young people. I used to be one,” he says with a laugh.
“At some point, the risk of letting someone know about your work is less than not having them on board. There is no right answer. It’s a real challenge.”
Gelburd notes that if he’s considering going into business with a new acquaintance, he will include his spouse in a casual coffee or lunch meeting with the person. “It gives me a tremendous perspective, because she is seeing all the things I am missing by looking at them only in a certain way.
“Sometimes you are going to make the wrong decision. That’s part of living, part of being an entrepreneur. Do your due diligence, and at some point pull the trigger. If it doesn’t work, you did your best; move to the next thing.”
It’s in the Details
Early-Venture Decisions All Partners Should Make
Lawrence Gelburd, a Wharton School lecturer, offers this advice:
1. How should partners agree to split things up?
It’s an art and not a science. There is a natural negotiation. If one side has everything and the other nothing, the latter is demotivated. What you have to do—and here is my nerd side coming out—is optimize the point at which both people feel they are adequately being taken care of. For some people that is cash; for others that is equity, or being high-profile. Figure out that balance, and be honest about your hot buttons. 100 percent of nothing is nothing. A number of my students or clients err on the side of stingy and end up with 100 percent of nothing, and if they had opened themselves up to someone with the necessary skills, capital and relationships, they would have been successful. If you give someone else a piece of the action, he or she has added motivation to get it done.
2. How detailed should the written agreements be?
Everyone should have written agreements. It’s difficult with most relationships, and most people don’t get enough written down, and there have been problems once the honeymoon is over or the glow is gone and nobody has dealt with the tough questions. I’m a big get-it-in-writing advocate, but I realize that 80 percent of people don’t, and unfortunately the ones who don’t get more press than the ones who do. And the number of ones who don’t have partnership agreements and end up having horrible, miserable lives is much greater than people think it is.
Of course, you can save yourself $10,000 in legal fees if you bang out some of these issues in writing before taking it to a lawyer—reach consensus on things like what happens if one of the partners get sick, dies, leaves, get charged with a felony, works for a competitor, wants to enter other businesses. These are things that you and I can think of in 10 minutes and write them down. It’s irresponsible not to take that time to at least talk through them.
3. Is the idea man worth as much as the guy who brings the money?
People with the idea and people with the money can’t live without the other one, so I tell them they start out at a natural 50-50 position. But the reality is if the person is putting up only the money, then the position is more like 20 to 50 percent. If the person is putting in only the idea and none of the money or business expertise, it is still hard to give them less than 50 percent. There is a certain bias there.
If you have two people willing to give you $1 million, but one has nothing to offer but the money and the other has expertise in what you are doing and contacts that will help, then I’m much more willing to give the second guy a bigger piece of the pie.