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Why friends make terrible business partners

September 12, 2015, 3:40 PM UTC
Okta CEO Todd McKinnon
Todd McKinnon, CEO, Okta.
Courtesy: Okta

The Leadership Insider network is an online community where the most thoughtful and influential people in business contribute answers to timely questions about careers and leadership. Today’s answer to the question “What do you look for in the ideal business partner?” is by Todd McKinnon, CEO of Okta.

When I was searching for a co-founder to help me run Okta, I came up with three rules: (1) don’t go into business with a close friend (2) don’t settle for a stranger and (3) choose someone you don’t mind spending as much time as you do with your wife (sorry, Roxanne). These three guidelines eventually led me to my co-founder and Okta COO, Frederic Kerrest. Frederic and I had both worked at for years, but not together — I was the head of engineering and he worked in various roles across the sales and business development groups. We had a similar list of references and, after insisting we go out to dinner, my wife approved. The rest is history, more or less.

Don’t put your friendship to the test
Running a company with a friend is a surefire way to end a friendship. When I first had the idea for Okta, I briefly considered bringing on one of my close friends from, but I knew that when we ran into issues — if we couldn’t raise funding, if we disagreed on how to build the product, or most importantly, if we foresaw different futures for the company — the pressure would be too much for us to withstand. On the other hand, if things went well, our friendship would evolve into an entirely professional relationship.

See also: What you need to know before choosing a business partner

Frederic and I started as business partners, and because of that we’re able to approach issues and important decisions with fewer emotions. For example, when we raised our first round of funding, we had to pick between two attractive offers — looking back, it was one of those “every decision is a good decision” situation, but realistically, we knew it would have a huge impact on the future of the company and we could feel the pressure. Instead of feeding off each other’s emotions, we looked at the offers rationally and based our decision on hours of thoughtful deliberations. That dynamic wouldn’t be the same among good friends.

Make sure you complement each other
The most successful business partners come to the table with varying yet complementary talents, perspectives and experiences. Frederic and I have plenty in common. We share a network, engineering degrees, experience as competitive athletes and supportive spouses, and we’re both keenly focused on satisfying our customers.

Our areas of expertise — his in sales, operations and marketing and mine in product — cover different grounds, and our personalities are mismatched in a necessary way. Frederic’s extroverted and optimistic, whereas I’m naturally more introverted and stoic. Back when we were first fundraising (before we had those two attractive offers), I woke up everyday worried we would never be able to raise money and it was Frederic who always got me to calm down and keep moving forward; we balance each other out.

See also: Never pick a business partner based on their skills alone

Foster your relationship
Nowadays, Frederic and I spend a significant amount of time together and we put a lot of work into maintaining our relationship – almost like a married couple. We have a Monday routine where we meet up for breakfast and discuss what we did with our families that weekend before transitioning into priorities for the days ahead. Outside of breakfast, we’re in almost constant communication. Because of that, I’ve actually learned a lot from Frederic about communicating. More communication is always, better, and understanding the intentions of the person on the other side is half the battle.

I tell aspiring founders to look for someone you respect and want to learn from; someone you’ll be comfortable talking to about difficult decisions and frustrating finances; someone you’ll want to invite to family barbeques, but also understand when they can’t make it. Your business partner be a huge part of your life and although it’s crucial you don’t start as friends, you should embrace the companionship that naturally should come with founding a company together.

Read all responses to the Leadership Insider question:What do you look for in the ideal business partner?

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Dolby CMO: What Star Wars taught me about finding business partners by Bob Borchers, senior vice president and CMO at Dolby Laboratories.

The quickest way to sabotage your new business by Jim Yu, CEO of BrightEdge.

How to avoid picking the wrong business partner by Ryan Harwood, CEO of PureWow.

3 signs you need to ditch your business partner by William Craig, founder and president of WebpageFX.

The most important relationship you will make in your career by Nirav Tolia, CEO of Nextdoor.