I partnered out of insecurity with someone who talked a good game and seemed strong in the areas I felt weak.
This insecurity cost me $$$
Choosing a business partner could be the 2nd most important relationship you ever choose (after who you marry.)
I just got out of a 5-year partnership that had become toxic.
Here's where I went wrong.
👇🏼👇🏼👇🏼
I partnered out of insecurity with someone who talked a good game and seemed strong in the areas I felt weak.
This insecurity cost me $$$
- What are my goals for this business?
- What are my strengths and weaknesses?
- What parts of starting/building this business am I the most unsure about?
- What might my perfect partner look like?
✅ Financially sensible & secure
✅ Shared vision & goals
✅ Emotionally intelligent (high eq > high iq)
✅ High integrity
✅ Similar work ethic
50/50 isn’t a business decision, it’s a settlement.
It’s a common way to decide equity splits because a down-the-middle split seems 'fair'. However, it's also lazy and more often than not is a bad deal for one person, and gets worse the longer it goes on
💰 Money
🎯 Skills
👥 Network
💡 Original idea
⏳ Experience
💪🏻 Sweat equity
Vesting is a term I wasn’t even aware of in 2015, but it’s essentially a way to accrue your equity over time instead of all at once. Common in the startup world, but not in the bootstrapped world.
My mistake: We both got our full 50% equity up front 🤦🏻♀️
Had we vested, he may only have been able to walk out with 20-25% equity.
😩😩😩
You must have an operating agreement! The purpose of this is to govern the internal operations of the business in a way that suits you - the owners.
Do NOT use a template or try to save money by avoiding using a lawyer.
This is one way I screwed myself and it became an enormous (and expensive) problem later.
Reenactment of me fixing later:
In marriage, the general statistic is that 50% of marriages end in divorce.
Well, 100% of businesses are going to end at some point and should be planned for at the beginning. Think of the buy-sell agreement as the prenup for your business.
- How should the business be valued?
- How quickly am I going to get paid out?
- Who can I/can I not sell to?
- Does my spouse have to sell back to the business if I die?
- What happens in a divorce when assets are split?
Owners should have fiduciary responsibility to the company.
Financial stress is one of the biggest reasons for divorce, and it’s no different in a business partnership — you need an explicit policy and it should include reward points.
In my case, my choice almost broke me and the business by the end.
Official announcement here: https://t.co/CzbrXkUcex
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There are a *lot* of software shops in the world that would far rather have one more technical dependency than they'd like to pay for one of their 20 engineers to become the company's SPOF expert on the joys of e.g. HTTP file uploads, CSV parsing bugs, PDF generation, etc.
Every year at MicroConf I get surprised-not-surprised by the number of people I meet who are running "Does one thing reasonably well, ranks well for it, pulls down a full-time dev salary" out of a fun side project which obviates a frequent 1~5 engineer-day sprint horizontally.
"Who is the prototypical client here?"
A consulting shop delivering a $X00k engagement for an internal system, a SaaS company doing something custom for a large client or internally facing or deeply non-core to their business, etc.
(I feel like many of these businesses are good answers to the "how would you monetize OSS to make it sustainable?" fashion, since they often wrap a core OSS offering in the assorted infrastructure which makes it easily consumable.)
"But don't the customers get subscription fatigue?"
I think subscription fatigue is far more reported by people who are embarrassed to charge money for software than it is experienced by for-profit businesses, who don't seem to have gotten pay-biweekly-for-services fatigue.
On a serious note, it's interesting to observe that you can build a decent business charging $20 - $50 per month for something that any good developer can set up. This is one of those micro-saas sweet spots between "easy for me to build" and "tedious for others to build"
— Jon Yongfook (@yongfook) September 5, 2019
Every year at MicroConf I get surprised-not-surprised by the number of people I meet who are running "Does one thing reasonably well, ranks well for it, pulls down a full-time dev salary" out of a fun side project which obviates a frequent 1~5 engineer-day sprint horizontally.
"Who is the prototypical client here?"
A consulting shop delivering a $X00k engagement for an internal system, a SaaS company doing something custom for a large client or internally facing or deeply non-core to their business, etc.
(I feel like many of these businesses are good answers to the "how would you monetize OSS to make it sustainable?" fashion, since they often wrap a core OSS offering in the assorted infrastructure which makes it easily consumable.)
"But don't the customers get subscription fatigue?"
I think subscription fatigue is far more reported by people who are embarrassed to charge money for software than it is experienced by for-profit businesses, who don't seem to have gotten pay-biweekly-for-services fatigue.
From day 1, I intended to build @shoutoutso_ in public, and part of it is to be transparent with numbers, talk openly about our highs and lows, and share lessons as we grow!
I have been doing individual posts on numbers every week so wanted to one big thread with all updates 👇🏽
Week
Week
Week
Week
I have been doing individual posts on numbers every week so wanted to one big thread with all updates 👇🏽
Week
Transparency time:
— Sharath \U0001f4e3 (@5harath) February 12, 2021
It's been 24hrs @shoutoutso_ went to public launch \U0001f525
Some numbers:
\U0001f4b0 6 rockstars bought Pro, Pro Annual plans.
\U0001f4aa\U0001f3fd 168 signups.
\u2665\ufe0f 182 Shoutout walls created.
\U0001f465 160K Twitter impressions on launch thread.
Thank you for making it a huge day for us \U0001f64f\U0001f3fd pic.twitter.com/is9Z53trIh
Week
Transparency time: It's been 2 weeks since @shoutoutso_ launched to the public \U0001f525
— Sharath \U0001f4e3 (@5harath) February 25, 2021
Here are some highlights:
\U0001f451 18 rockstars paid customers
\U0001f4b0 $240 MRR
\U0001f4aa 426 signups and counting
\u2764\ufe0f 140 walls published
\U0001f3c6 #3 product @ProductHunt
Appreciate this community so much\U0001f64f\U0001f3fd pic.twitter.com/KmKCZdHqlJ
Week
Transparency time: Week 3 @shoutoutso_ \U0001f525
— Sharath \U0001f4e3 (@5harath) March 4, 2021
Here are some highlights:
\U0001f451 29 rockstar paid customers
\U0001f4b0 $460 MRR
\U0001f4aa 475 signups and counting
\u2764\ufe0f 163 walls published
\U0001f3c6 Launched on @ProductHunt(#3) @IndieHackers
Grateful for this amazing community for all the love and support \U0001f64f\U0001f3fd pic.twitter.com/MVGo0cfZJj
Week
Transparency time: It's been a month we launched @shoutoutso_ \U0001f525
— Sharath \U0001f4e3 (@5harath) March 11, 2021
Here are some highlights:
\U0001f451 36 rockstar paid customers
\U0001f4b0 $610 MRR
\U0001f4aa 516 signups and counting
\u2764\ufe0f 191 walls published
\U0001f3c6 @ProductHunt Maker Grant Award
Grateful for this amazing community for all the love \U0001f64f\U0001f3fd pic.twitter.com/1i7LxLU4Ap
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