Howdy GirdleyWorld!
Hope you had a great week. In today’s issue:
- The 11 questions I ask before partnering with anyone
- My one-page agreement
Let’s do it!
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I’ve got a new business in the works — it’s top secret for now, but you’ll love it. It’s had me thinking about how I choose the people I work with.
Success in a business partnership comes from two things:
- Who you partner with
- How it’s set up from the start
I solve the who by asking the right questions. Sometimes they’re questions I ask myself, and sometimes I ask them. But I want to feel sure of all of them.
I solve the how with a simple document called a Memorandum of Understanding. It’s less official than it sounds. I’ll walk through it below.
Questions I ask before partnering
- Does each partner bring complementary things to the table?
Partnerships are about 1+1=3. If you’re both good at the same things, that’s not helpful.
You need partners bringing what you don’t.
- Do we have aligned desired outcomes and lifestyles?
If one partner wants to get rich quick and the other doesn’t… it’s going to end poorly.
- Can we both put mission ahead of personal interests?
Every partnership I’m in has required me to give more than I wanted on occasion. You want a partner that’s ready to make the same sacrifices.
(Within reason.)
- Do I enjoy spending time with the person?
Business partnerships last longer than the average marriage. And splitting up a business is even harder than divorce.
Make sure you like this person enough to get through thick and thin.
- Are we comfortable planning for potential breakups?
I noticed a pattern in my long-time married couple friends: the ones who were comfortable talking about divorce had stronger marriages.
This reflected a “we’ll do the hard stuff” mindset. And that’s essential for business partners.
- Do I love this person’s work style?
I’ve learned that partnerships finish how they start. If the other person’s style turns you off a little right now… it’s going to be hell in a decade.
- Does each partner have skin in the game?
My “hit rate” with partners who put cash/time/status in to start a venture is 100%.
It’s a limited sample size, but enough that I look for this every time.
- Is my partner a missionary or a mercenary?
This is maybe just my style, but I’ll take a missionary every time. Mercenaries are in it for the money or the glory.
I care about the mission, and want partners to be the same.
- Have I planned for all the possible partnership outcomes?
What if they steal? What if we’re a wild success? A failure? A total “meh”? Do they have a crazy spouse? What if they have health problems?
- If I was hiring them, would they be a “hell yes”?
In practice, I’ll run a mini-hiring process with potential partners. Sometimes with trial periods.
At minimum, I do reference checks.
- Do I know this person well enough?
Are our values aligned? Do I understand their drive/motivation/desires?
If I don’t, I slow down to know them better. A business partnership is a big leap.
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Once I feel good about all these questions, I can be reasonably sure I’ve got the right person.
The next step is getting the plan down on paper.
The Memorandum of Understanding
I can’t stress it enough: get alignment on Day 1. Or you can end up in disaster later.
Making your MOU is super simple. You and your partner(s) put down in writing:
- What’s the idea/vision
- Who’s doing what
- What’s our plan
It’s not a contract or legal document. In fact, you usually write it yourself with no lawyers. And it gives you lots of benefits:
- Saves on legal fees later
- Reduces the chance of later disagreement
- Forces you to have a “tough” conversation early
- Moves super fast (save lawyers for later!)
- Avoids doing stuff that looks like progress but isn’t
Here’s a sample (see page 1, page 2)
Doing this has saved me millions by avoiding drama.
And while I’ve had partnership headaches like everyone else, I’ve never had one fail because of misalignment. (Last I checked, that’s at 15 and growing!)
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3 things from this week
- Appetizer: I was a guest on the Something For Everybody podcast - we had a great conversation about building great teams, luck, and the effects of failure. Give it a listen!
- Main: We’ve been having a blast making videos out of my content. We recently made one about the personal planning system I wrote about in January. Check it out on my YouTube channel — and subscribe for 2 new videos a week!
- Dessert: I love the reputation I’m building. (Not that it matters, but here’s the context.)
Have an amazing week!
Michael
