What will create a good partnership?
My thoughts on Partnership:
This has been on my mind for a very long time.
Whenever I look for a business partner, I used to think of the utility function.
The other partner must have a skill that I do not have.
That is the usual way of thinking about partnership, isn’t it?
This type of partnership could be seen as a Complementary Partnership where the usual business guru will say you must have a partnership where A+B will be definitely more than 2. The problem is that we are using the wrong mathematical construct here. 1+1 can never be larger than 2…
If we set all the average skills at 1, then we are definitely selecting partners whose skill is above the average. To be exact, their skill level has to be way above the average skill level to make this partnership work.
The correct mathematical construct for such a partnership is A x B > 2.
If both A and B are average, then there is no net benefit to this partnership even if A and B works together.
If both A and B have a different set of skills and are much above the average crowd at 1.5, then there is a benefit for A and B to come together as partners.
But if either A or B becomes a zero, then the partnership becomes worthless.
You could see how this is the right/wrong formula for a company. As we add on more partners into the company, some partners do not contribute but instead subtract from the result.
In the event that a partner is critical to the partnership and invertedly turn into a zero (due to death or incapacity) then that could spell the end of the company.
I am unsure about you but that seems like an awful way to run a business. There is a key man risk which you cannot ignore, and it is always hanging over your company’s head.
This is what I termed as having single leg syndrome.
For a thought exercise, just imagine that the purpose of creating a company is to form a whole body. You are a single leg here and your first idea of looking for a partner is that you should look for a hand?
I am so very sure one hand and one leg form a complementary set.
Hope that you are starting to see the irony… Instead of looking for a hand, we should be looking for another leg. Someone who has above average skill set and is willing to work and grow with you. Adding a hand is not the solution for now.
By coming together and bringing the same above average skill, the two legs could start to learn to work efficiently together. As time goes by, they could start to understand who the master leg is, and the other leg could learn to support the other. They may even start to enjoy working seamlessly with each other like coordinating on how to jog and enjoy the ride. If both of them are indeed world class, this pair of legs could soon be gunning for world records. This is what I term as the Focused Partnership.
This mathematical construct is slightly different. The partnership could be seen as (A1+A2) ^ X (where X is the power function of their combined above average skill).
This is an interesting thought exercise on business growth. By creating a partnership which has an above average skill set means that this partnership is highly focused, productive and valuable. If we look into successful early-stage business partnership, it is often made up of partners with a similar skill set. The reason is simple: similar people are often drawn to each other's skills and capabilities. I would argue that this is the partnership that is ideal for an early-stage business.
In recent years, there have been an increasing number of platforms to link businesspeople with technology people. I have not really seen any of that type of partnership working really well. Instead, it is often the same type of people who form the best partnership. They could be the creatives, the technologists or the business type of people. They work on their core strength and only subsequently bring in partners of different stripes to form the core of the business.
So, focus on getting the right type of partnership (similar above average skills) and soon the two legs will be getting your torso and your hands and possibly a head too.