Ron Gilbert always knew he wanted to start his own company. He also knew that he didn’t have the marketing and budgeting experience that he needed. So for eight years, he deferred his dream and designed computer games for LucasArts Entertainment. He kept adding new skills, broadening his experience, waiting until he felt ready. Then, one day, it hit him: What on Earth was he waiting for? A colleague of his, Shelley Day, a producer at LucasArts, already had the business know-how that Gilbert was working so hard to acquire. Why not start a company together?
So in 1992, with $100,000 in loans and savings, they cofounded Humongous Entertainment in Woodinville, Washington and began developing what are now some of the best-selling children’s computer games on the market. Two years ago, in a stock swap worth an estimated $76 million, Humongous, now based in Bothell, Washington, agreed to become a wholly owned subsidiary of GT Interactive Software. Gilbert, 34, remains the company’s creative director; Day, 38, is its president and CEO. “The two of us complement each other perfectly,” says Gilbert. “We get along so well that sometimes our colleagues think of us as one person.”
Richard Masterson, 38, was running a small leasing business when he first met Larry Smith, 41, in the cafeteria at Prodigy Services Co. in 1989. He and Smith, then an executive at a leading New York City advertising agency, were each trying to set up electronic storefronts on Prodigy’s online service. Both had become fascinated with interactive marketing, and they hit it off immediately. “It was like finding a long-lost brother,” Smith remembers. “From that point on, we talked on the phone almost every day.”
Over the next five years, Smith, anxious to escape agency life, and Masterson, struggling to keep his business afloat, pooled their ideas for a joint venture. In 1994, Smith secured a $50,000 contract from Digital Equipment Corp. to develop a marketing plan for a new product. Then he called Masterson – and US Interactive Inc., an Internet-services firm, was born. Today the company has around 200 employees in five offices and boasts such high-powered clients as Unum, the American Stock Exchange, and Royal Caribbean International. “It just clicked for us,” says Smith.
Say good-bye to the Unit of One. More and more businesspeople are learning a lesson that Marvin Gaye and Kim Weston first sang about three decades ago: “It Takes Two.” Maybe you’re starting a new company. Maybe you’re leading change in a big company. Whatever your situation, your best resource is a great partner. If you want to go places, you shouldn’t try to go it alone.
“More and more of us are faced with having to achieve breakthrough goals and to solve complex problems,” says Robert Hargrove, a consultant based in Brookline, Massachusetts and the author of “Mastering the Art of Creative Collaboration” (McGraw Hill, 1998). “You can’t do that alone. The only way to meet these kinds of challenges is through collaboration.” Authors (and partners) Sarah and Paul Edwards studied home-based entrepreneurs for their book “Teaming Up” (Tarcher/Putnam, 1997). More than 60% of the entrepreneurs whom the Edwardses surveyed said that they were teaming up more often than they did five years ago, and 70% said that they wanted to do even more teaming up.
“It’s a matter of scale,” says Bill Rosenzweig, a cofounder of Venture Strategy Group LLP, a San Francisco-based venture-capital firm and consultancy that specializes in emerging companies. “If you want to make a real impact, you have to collaborate.”
Of course, for every partnership that makes waves, there are dozens that end up on the rocks of dueling egos, power struggles, or money squabbles. To explore what separates the successes from the casualties, we consulted leading experts on the power of partnerships – career coaches, venture capitalists, therapists, and counselors – as well as businesspeople who have forged productive and enduring relationships. We asked some basic questions: Do partners have to like each other to work together? How often do partners have to talk? How do you determine who does what? Must one partner be in charge? Can you avoid arguments? How do you know when a partnership is over? Their answers amount to a primer on partnerships: a how-to manual for creating and sustaining your most important professional relationship.
“Take away the sex, and partnerships are just like marriages,” says Azriela Jaffe, a business coach based in Lancaster, Pennsylvania and the author of Let’s Go Into Business Together: Eight Secrets for Successful Business Partnering (Avon Books, 1998). “You have to deal with power, money, and conflict. And that requires work.”
Do You Have to Be Friends?
From the day Kevin O’Connor, cofounder and CEO of DoubleClick Inc., an advertising company based in New York City, hired Wenda Harris Millard as the firm’s executive vice president of marketing, it was unlikely that they would ever be buddies. Millard, 44, the former publisher of AdWeek and Family Circle magazine, is a streetwise East Coast native who dresses in Armani suits and loves to dish media gossip. O’Connor, 37, is a down-to-earth Midwesterner who built his career by running software companies. In meetings, O’Connor is apt to draw diagrams on whiteboards and to use words like “granular” and “productize” – words that don’t roll trippingly off Millard’s tongue. “We come from completely di/erent worlds,” she says. “Sometimes we don’t even speak the same language.” Two years after their partnership began, they still socialize only “on a limited basis,” according to Millard. Their relationship, she says, “is built on trust rather than friendship.”
Yet the odd-couple partnership between O’Connor and Millard has made DoubleClick one of the hottest companies in Silicon Alley. Its IPO in February 1998 was such a success that New York magazine dubbed it “the day Silicon Alley became real.” This kind of relationship may not be the rule among partners, but it’s hardly the exception. Many partners who work in demanding environments separate their work lives from their social lives – even if they started out as friends. “I work hard during the week,” says Jon Ferrara, 38, executive vice president at GoldMine Software Corp., a contact-management software firm based in Pacific Palisades, California. “So I like to spend weekends with my wife and baby.” Although his partner, Elan Susser, 34, has been a pal since college, Ferrara rarely sees or talks to him away from work.
Most experts agree that it doesn’t matter whether partners share interests, go to the same parties, or chum around after work. What does matter is that they support each other on the job — particularly during the tough times. Susser, GoldMine’s president, puts it this way: “You need someone who lifts you up when you’re down.”
If partners don’t have to agree to be friends, what do they have to agree on? The answer: core goals and values. The most successful partners spend long hours together – often before they actually get down to business – hashing out what they’re trying to create and how they will collaborate. During this phase, which Sarah and Paul Edwards call the “forming” or “honeymoon” stage, the partnership may seem to be in danger of never moving beyond talk. But it’s this communication that lays the foundation for future action; it’s at this critical time that partners define the ground rules of their relationship.
“Today, more than ever before, people bring their hearts – not just their heads – to work,” says Rosenzweig. “They want to see that the company they’re creating embodies shared cultural values. Even a partnership that starts off as a kind of love affair will go awry if it doesn’t have certain guiding principles, which include not just a goal but also a shared sense of how to get there.”
By the time Gilbert and Day quit their jobs at LucasArts, for example, they had agreed on a vision for their company. First, they wanted to make games of high quality. Each character would be hand-drawn and then scanned into a computer – a labor-intensive process that allows characters a much-wider-than-average range of expression. They also agreed that they would maintain control of their company, even if doing so meant it would grow more slowly than it would if they accepted venture capital unconditionally. Finally, they wanted a “noncorporate” atmosphere. “We wanted work to be fun and free of office politics,” says Gilbert. “We were in total agreement on these principles.”
Naturally, this forming process is a lot easier when partners have developed a rapport and when they have time to hammer out their differences – as was the case with Gilbert and Day. But many partners, particularly those in larger, more corporate settings, find themselves in the equivalent of a shotgun marriage: They’re thrown into a close working relationship with someone they barely know. How do you build shared values with a stranger, especially when you’re working under tight deadlines?
You work closely – literally. Millard says that her first three months at DoubleClick were memorably intense, in large part because her relationship with her new partner was so close. She, O’Connor, and two other executives shared a single conference table in a windowless room and had just three phones among them. As uncomfortable as these tight quarters were for Millard (who was accustomed to a corner office with a secretary outside the door), the proximity helped her and her partner to bond quickly. “If we hadn’t had that time together – when I’d hear Kevin on the phone, and he’d hear me – I don’t know how things would have turned out,” she says. “Each of us got to see how the other worked.” By the time DoubleClick had the resources to move into a new space with individual offices, O’Connor and Millard had built a strong foundation for their relationship.
How Often Should You Talk?
Some of the closest partnerships are between people who rarely talk to each other. It sounds counterintuitive: How can you collaborate without communicating? But it happens every day. Many partners who have created healthy, mature relationships don’t feel the need to confer on every decision. In fact, they can go days without seeing each other and still feel confident about their collaboration.
“If you’ve done the hard work” of building a partnership, says Paul Edwards, “you reach a point where you don’t need to discuss how certain things will get done. You already know how your partner will do it.” In Teaming Up, he and his wife, Sarah, argue that successful partnerships pass through four stages. During the first three phases, partners sort out goals and responsibilities. Then they reach the “performing stage,” when decisions get made quickly and when the partnership functions without a great deal of discussion. “By this stage, you don’t need to talk so much,” Edwards says, “because you’ve gotten over the early hurdles.”
And you probably won’t have time to talk anyway. Since Smith and Masterson founded US Interactive, Smith has been based in New York City and Masterson has worked out of Medford, New Jersey. Early on, the two partners spent three days a week together, taking turns making the 90-minute commute. These days, they see each other less than once a week – and most of that time is spent with the entire executive team. “There is a lot less collaboration now, and a lot more trust,” says Smith. “We’re working 12 hours a day. We can’t bounce everything off each other.”
Of course, when the pace is so fast, there’s a danger that partners will drift apart. That’s why most successful partners establish simple rituals to ensure regular communication and to prevent serious issues from festering. At US Interactive, for example, Smith, Masterson, and the executive team conduct a conference call every Friday at noon and convene for a half-day, face-to-face meeting every two weeks. Everyone knows not to schedule conflicting meetings at those times, since these are the periods when internal communication takes priority.
The three founding partners at UpStart Communications, a high-tech public-relations firm based in Emeryville, California, go a step further. They organize not only a two-hour meeting of the “principals committee” every Friday morning but also a three-day retreat every three months. On these retreats, the partners bring along Pamela York Klainer, an organizational consultant, who acts as a kind of group therapist. “She helps us sort out whatever issues we have as an organization,” says Kimberly Fox, 36, one of the partners at UpStart. Fox emphasizes that although the retreats are serious business, the partners try not to be too serious. They always include at least one night out on the town: “We don’t ever want to forget that work should be fun.”
Still, prescheduled communications can’t capture the magic that inspires many great partnerships – the brainstorming, the improvisation, and the accidental creativity that come from working closely and talking frequently. Rodgers and Hammerstein didn’t write their music during quarterly retreats; Penn and Teller don’t invent new routines in conference calls.
Which is why, at Sapient Corp., a fast-growing technology-consulting firm based in Cambridge, Massachusetts, cofounders Jerry Greenberg, 33, and J. Stuart Moore, 36, share an office and sit at desks that are exactly eight inches apart. They also require each senior manager in the company to share an office with a peer from another department. The rest of the staff sit in open spaces. These arrangements “make it easy for people to take five minutes between phone calls to talk,” says Moore, who notes that his partner is out of the office on business about three days a week. “They also send a message about how important we believe teamwork is.”
Who Does What?
When Moore and Greenberg founded Sapient, Moore was responsible for internal operations, such as creating and delivering the software, while Greenberg focused on external matters like sales and finance. This division between front-office and back-office operations is typical, according to Sarah Edwards: “People usually team up with a partner who possesses complementary skills. Often one is the inside person, and the other is the outside person.” Making that division explicit, she says, “avoids ego issues and keeps people from stepping on each other’s toes.”
But in the most successful partnerships, she adds, boundaries remain loose, so that partners have the freedom to take on new duties, to drop old ones, and otherwise to grow and stay fresh. At Sapient, for example, Moore says that he and Greenberg often divvy up responsibilities for hiring or marketing according to “who has the passion and energy for it at the moment.” And when Greenberg, who is responsible for relations with investors on Wall Street, just can’t bring himself to get on another plane to New York, Moore happily fills in for him.
“That’s the advantage of having a partner,” notes Mary-Ellis Bunim, who partnered with Jonathan Murray to create and produce MTV’s hit series “The Real World” and its spin-off, “Road Rules.” “You share the burden.”
Longtime collaborators like Bunim and Murray usually make subtle divisions of labor that are based as much on their personalities as on their skills. Bunim, who is more quick-tempered and emotional than Murray, often leaves difficult confrontations to her partner. Last summer, when MTV accidentally preempted a “Real World” episode with other programming, it was Murray who made the phone call to a network executive. “He’s a natural salesman,” says Bunim, who marveled at how Murray kept his cool while he chewed out the executive. “He can give the worst news with a smile, and everyone likes him.”
To agree on a sensible division of labor, partners must recognize each other’s strengths and weaknesses, says Azriela Jaffe, who interviewed 120 current and former partners for her book. And that can be easier said than done. “Too often, people kid themselves about what they’re good at, and they get into areas where they shouldn’t be,” she says.
At some point, though — as personal or corporate objectives shift — at least one partner will push for his or her role to change dramatically, says Klainer, a specialist in partnerships based in Rochester, New York. “A person might start with one goal, but a year later, priorities may change,” she says. “Or the business context may change, and suddenly the company has to adjust its goals.” This is when the partnership is most vulnerable, as the partners – now with entrenched habits – are forced to redefine how they work. And this moment often comes when the business is becoming a success.
About two years ago, for instance, UpStart was beginning to take off, attracting A-list clients like Tandem Computers Inc. and SunSoft Inc. (a division of Sun Microsystems). But the founders were feeling overwhelmed by work. “We were successful, but everything felt like a burden,” says Fox. “We had to do something so that we could continue to grow without killing ourselves.”
So the founders began bringing Klainer to their retreats. They resolved to stop thinking as though they were running a small shop. They delegated more responsibility and authority to their staff. They created a new management team to handle staffing issues, such as training, workload, and salaries. The result: Fox alone cut 5 to 10 hours from her work week. “It was difficult for us to let go of some of the control,” she admits. “But we realized that we had to – if we wanted to continue to grow the business.”
Must One Partner Be in Charge?
In a word, yes. But leadership need not be unlimited or unconditional. When Joe Kraus and five of his friends from Stanford University founded Excite in 1993, they took it for granted that they couldn’t make every decision by consensus. “Someone has to have the final say,” says Kraus, now 27, who served that function until Excite hired George Bell, 41, to be CEO of the Internet search-engine company. Kraus had no problem with handing over the reins. “George had so many years of experience in media,” he says. “I knew that he could take Excite where it needed to go.”
What executive worth his or her stripes would abdicate leadership? An executive who understands that for a partnership to work, the right person has to take the lead. At the same time, one reason why Kraus willingly defers to Bell’s judgment is that Kraus can still exercise his prerogative in areas where – because of his background and experience – it makes sense for him to do so. Partnerships almost always involve a form of hierarchy, but the hierarchy is usually one of expertise rather than of raw power.
“In genuinely collaborative relationships, people focus on who has the relevant knowledge and expertise, not on who has the title,” says consultant Robert Hargrove, who is also founder of the Institute for Creative Collaboration, a nonprofit research group. “It doesn’t really matter who is technically in charge. What matters is who’s right.” Such partnerships, says Hargrove, are built around “the authority of knowledge,” not “the authority of position.”
That’s how the partnership between Bell and Kraus works. There’s no doubt that Bell is Excite’s leader, but he says that he openly relies on – even defers to – Kraus when it comes to deciding how to make Excite “a better experience” for users. At Kraus’s recommendation, for instance, Excite underwent a major face-lift: The search engine reorganized its content according to function and introduced television-style channels. “Joe has spent a lot more time online than I have,” says Bell. “And he saw that we had allowed the technologists to organize the search engine, rather than building it around the consumer.”
A few notable partnerships have thrived with something close to 50-50 power sharing. Since Moore and Greenberg founded Sapient, in 1991, they have been equal partners – to the point of sharing the title of CEO and chairman. All major decisions require their agreement. “By making sure that we are both comfortable with the big decisions, we cover all of our bases,” says Moore. “We make better decisions together than we would on our own.”
Sapient’s recent reorganization is a case in point. As of early 1997, its staff was organized geographically: Employees were assigned to clients according to region. Moore proposed restructuring the staff around six key industries. “I thought we needed to deepen our industry expertise,” he says.
Greenberg, concerned about the repercussions of such a fundamental change, suggested that the company try a pilot program first. It did, and Moore and Greenberg discovered that many employees didn’t favor the new arrangement. Some had developed technical specialties that they were able to apply across various industries. Realizing that Sapient needed both transferable and industry-specific expertise, Greenberg and Moore decided to regroup only the company’s vice presidents around industries, leaving the rest of the staff free to choose their own specialties.
“I’m good at seeing what we need to do to grow this company,” says Moore. “But Jerry is good at seeing how much change the organization can assimilate. We regulate each other.”
Can You Avoid Arguments?
In a word, no. “Disagreements are inevitable,” says Klainer. “If you run from them or push them under the rug, eventually they’ll just cause bigger problems.”
In fact, the most successful partners actually make it a point to cultivate disagreement. The real question is, How do you disagree without being disagreeable? When Susser and Ferrara faced the dilemma of whether to move their office to Pacific Palisades, a high-rent district on a beach in Southern California, they held a kind of Socratic dialogue. Each partner would challenge the other’s position in an effort to arrive at the best answer. Susser argued that the move would put their company on the map; Ferrara objected that rent for the new office would be too expensive. Back and forth they went, until they finally convinced themselves — and each other — to go ahead with the move.
“The truth is, we were both very ambivalent,” says Susser. “But we always test each other’s positions, and force the other person to think through and justify his point of view. I think that’s what has made us successful.”
To be sure, a disagreement about the location of an office, however intense at the time, is ultimately an issue of modest importance. More basic disagreements – for example, over a company’s direction and strategy – can test the very essence of a partnership. And given how quickly and radically the competitive landscape can change, the occasions for such disagreements are difficult to avoid.
Take the case of Smith and Masterson at US Interactive. When they founded the company, in 1994, both wanted to build what Smith called “a lifestyle company” – one that would be successful, but not so hell-bent on success that it would take on all the headaches of a large company. Less than two years later, the partners realized that they had the potential to develop US Interactive into a major company – if they moved quickly to bring in outside investors. Masterson was excited by the prospect. “He saw this window of opportunity and said, ‘Let’s go for it,’ ” Smith recalls. Smith was more cautious, wanting to stay on their current course.
They recognized that this was the kind of conflict that could end their partnership. So they committed themselves to resolving it through a process that Smith calls “violent agreement.” “We battle, but we always keep in mind that, at the end of the day, we’re on the same side.”
So they talked. Then they talked some more. How would their roles change if they were part of a big company? Who would handle day-to-day finances? How would the culture of the company change? Was the opportunity worth it?
Finally, after two months, Smith reversed course: “The more we discussed it, the more I realized that there didn’t have to be such a big difference between the culture of a small company and that of a big company. I guess I caught Rich’s enthusiasm too.”
And he’s glad that he did. Not only has the company become a major Internet player, but Smith, like most members of a winning partnership, can’t imagine what life would be like today if he and Masterson had gone their separate ways. “Could either of us have achieved this much alone?” he asks. “Perhaps, but we definitely wouldn’t have had as much fun.”
Pamela Kruger (email@example.com) is a Fast Company contributing editor based in Milburn, New Jersey. Her colleagues consider her a great partner.