When starting a business, a critical key to success are the people involved¹. It may be the single decision that has the highest likelihood of determining huge success, moderate success, or failure.

If it's that important, you want to make the best decision that you can. So, what makes a good business partner? Well, it depends on your situation. But it is worth thinking about what you want in a business partner before you make the leap.

In my experience, there are 3 mains things that you can look for in a business partner:

1. Skill Matching
2. Extra Hands
3. Vision & Leadership Partner

Skill Matching

This is one of the most common reasons for selecting a business partner. And it's common advice when selecting a business partner.

And for good reason: this is a good trait to have in a business partner.

If you are strong in technology but weak in sales, bring on someone who is great with people and selling-and don't worry about the fact that they can't code their way out of a "Hello World." in javascript. even if copying code from Google.

Having someone who offsets some of your weaknesses is a great idea. Whether they be marketing, product definition, or business planning. You want business partners, like vendors, to fill a gap in your skills.

This is a pretty natural fit. You find yourself working with people who help you complete your work better and you reach out to them because you need help.

Extra Hands

Sometimes, this one just happens. You know lots of people who are in the same line of work - some of these people are your friends. When it comes time to launch your startup, you naturally look towards your friends. And often, your friends really understand your startup idea for delivering custom-made bath soap to your door, while ordering using your mobile phone and an image of a QR code.

This can be a good thing. But the important part is not to confuse it with rounding out your skillset. Don't try to pretend that 2 programmers can just "focus on different areas"-areas where you have no skills. If these people do have other skills, then that is the above partner: someone with other skills. But don't kid yourself, that can lead you into trouble later.

The other dangerous part of doing this is that you can get a bit of an echo chamber. Suddenly every new feature sounds super cool-even if it's completely early adopter-only. Having a very pragmatic & grounded sales person can help solve this (or having less-techno-savvy business who has no ideas what twitter or plurk or RSS is).

Don't get me wrong, I'm not against getting "extra hands" business partners in a startup. Just recognize that you aren't rounding out your skills or offering and you sure aren't bringing in dissenting voices (at least not on the non-technical side). You're getting some much-needed extra hands&8212;and that can be useful.

Vision & Leadership partner

This one sounds simple: of course your business partner shares the visionary & emotional weight of the company. But some do better than others. Sometimes they just aren't that kind of person, sometimes they don't know the market as well.

Does it matter? It depends.

It matters if you want someone to help map out the future of the company. If you don't want that weight and responsibility all by yourself. It matters if you want someone to tell you that your plan is wrong - don't underestimate the importance of having someone who isn't afraid of saying: "you're retarded" when necessary. It beats the alternative of building a product that that market doesn't want. The market doesn't tell you that your idea is dumb as kindly (or as early) as a good business partner who understands the industry you are working in and is willing to trumpet their convictions (even when they are in contradiction with yours).

You don't have to have this business partner. But you definitely need to know what resources (advisors, mentors, early testers) you have available to help you steer the course to startup success.

More

What other good kinds of business partner are there? What has your experience been with having partners in your startups?

Links & Further Reading

1. As Joel Spolsky puts it: http://www.joelonsoftware.com/articles/GuerrillaInterviewing3.html, if you had to code a GPL implementation of WATFIV in 7 days (in order to save a cruise ship full of tourists), your success would greatly hang on the quality of the people involved.
   
   You're probably doing something other than WATFIV and there is no hijacked Love Boat but the point is no less pertinent: the people involved - coders, designers, planners, and business partners - will, to a large extent, determine the success or failure of your startup.

• Tech Republic: Answer these five questions before choosing a business partner
  http://articles.techrepublic.com.com/5100-10878_11-1038993.html
  These are good questions. Especially the point about having a shared vision. I think that you need to expect change in the vision (many successful startups change course more than once), but you need to have some understandings & shared plans. Some areas that you probably want to have aligning vision:
  • Funding Approach (VC, angel, bootstrapped)
  • Equity Sharing - are you going to keep a larger portion of a smaller pie or a smaller portion of a larger pie?
  • Roles - who is responsible for making sure each business-critical thing works?
  • What is success for this startup? For you?
• The GlobeAndMail: ReportonBusiness: Wise Words
  http://www.theglobeandmail.com/servlet/story/RTGAM.20060616.wwisewords0616/BNStory/specialSmallBusiness/home/?pageRequested=1
  I like his idea of getting someone loosened up with alcohol to see how they behave. You need to know how your potential business partners will react when chips are down or thing rattle them. Good tips here for selecting a business partner.
• TechBizMedia: Startup 101: Selecting your business partner(s)
  http://www.techbizmedia.com/entrepreneurship/2007/06/27/startup-101-selecting-your-business-partners/
  He echos some Paul Graham (you do read Paul Graham, don't you?) thoughts and suggests a role breakdown that is a reasonable template for some many startups.
  He has a previous article about some of the perils of solo startups: http://www.techbizmedia.com/entrepreneurship/2007/06/17/startup-101-never-start-alone/ - where he raises the problem of having someone to call your bad ideas on you. I think it is important to have this "service," but it's not automatically fixed by having business partners.
• Voices.com: Words of Wisdom: Choosing a business partner
  http://blogs.voices.com/voxdaily/2006/06/words_of_wisdom_choosing_a_bus.html
  I disagree that a business partner needs to be a friend. You do need to know them and be able to work with them well - but that does not equal friend. Although, I'd suggest that if a business partner that doesn't end up as a friend through the course of working on the startup then you're doing it wrong.