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August 05, 2011

Arranged Marriages

My wife and I have picked out the perfect spouse for my son.  They have developed a wonderful relationship together over the years, with great chemistry and warmth.  She comes from a family that has identical values and priorities to ours and would make wonderful in-laws.

They are both 9 years old.

This example - admittedly absurd (although we still do talk about it!) - got me thinking about the challenge of arranged marriages in the world of entrepreneurship.

Many entrepreneurs come to us and say "I have this great idea, all I need is a technical co-founder" or "I have a killer technology that I'm developing, all I need is a business co-founder."  They look to us to help make the match in the hopes that they will complete their team and live happily ever after.  

Unfortunately, arranged marriages are hard to execute.  You can't force a partnership.  It has to come naturally and evolve organically.  When two partners have worked together already and come to us, we know that "team risk" has been meaningfully mitigated.  But even when a founding team has a long personal history, if they don't have a professional history together it can be hard to predict whether things will work out harmoniously.

We have had a few examples in the Flybridge portfolio where we have been able to make matches between business builders and technical founders that have really worked.  In particular:

  • Virtual Computer, where we were able to match the late Alex Vasilevsky (RIP) with CEO Dan McCall to build a successful desktop virtualization company.
  • Cartera Commerce, where we were able to match technical founder Dave Andre with CEO Tom Beecher to build a successful e-commerce and performance marketing company.
  • Digital Lumens, where we paired a data communications veteran, CEO Tom Pincine, with a lighting guru, Brian Chemel, to start the leading LED-based solid-state lighting company.

But we have also seen plenty of examples where it has not worked - where putting two strong personalities together to build a venture leads to disaster.  Here are a few tips based on lessons learned in trying to make arranged marriages work:

  1. Sign a pre-nup.  Two founding team members may think they have a clear agreement as to how they are going to divide up responsibilities, but unfortunately humans have a tendency to listen to what they want to hear.  To avoid misunderstanding, write it down.  Write down the roles and responsibilities, the mechanisms by which you will resolve disputes, and what the financial deal is (equity split, deferred compensation, etc.)  between the two of you.  HBS Professor Noam Wasserman wrote a good blog post on how to think through the initial equity split that I highly recommend.
  2. Celebrate diversity.  I have found that it's best to have two founders who are really different - different skills, backgrounds, different perspectives on the world.  Otherwise, there is a risk that they step on each other's toes by inserting themselves into the same set of issues.  Which founder will be Ms. Outside vs. Ms. Inside?  Which founder will handle fundraising vs. product development?  These questions should have obvious answers based on skill set and experience, rather than coin-flipping.
  3. Don't rush it.  Having a year long engagement period is a good practice in marriages - it allows the newlweds to "try on" the whole marriage concept over a long period of time.  Similarly, allowing a founding team to have some hang time together and not rush into a relationship is an important practice.  With a fast-moving industry, a year is typically not practical, but take a few months to "try it on" before you jump in to a founding partnership.
  4. Talk it out - in private.  I believe it was President Bill Clinton who began the practice of weekly lunches with his Vice President, Al Gore (cute joke on that here).  That cadence of private 1 on 1 sessions is a valuable mechanism to set up between two founders to make sure they remain in synch.  If employees sense even slight disagreements between founders, it can lead to confusion and misalignment.
  5. Seek a counselor.  I am a big fan of busines coaches and would advise founding teams to consider hiring a professional coach or nominating an advisor to help them resolve disputes - before any disputes arise.  There's a good reason complex business contacts have a built in agreement on the dispute resolution process.  In the heat of the moment, that's the last thing you want to negotiate.  Similarly, founders should setup a neutral party and process to assist them in resolving issues so that when they inevitably arise, it's an orderly, rational process.

My wife and I will keep a close eye on my son's evolving relationship with his nine year old girlfriend.  In the meantime, I'll keep looking to make more great entrepreneurial matches.

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Jeff, fantastic post. I also think the entrepreneurial arranged marriage services are a bit nuts, but they potentially could work. Your post was great not because you highlighted that these services/accelerators are around, but because you listed a few tactics that you should follow if you are looking into these. Specifically, #3 is important: Don't Rush It. I wholeheartedly agree. - Darren

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Thanks, Darren.  It’s a fine art to be a good “yenta” – and we’re all still learning! 

And what an absurd signal these founders are sending as well. If getting a cofounder is difficult, recruiting and user acquisition are sure to follow.

Great post.

Wonderful post. Thanks. I'm starting a business and this is one of my top concerns now. I totally agree how important this decision is. About #3 Don't Rush it, how would you do it more specifically? (a) Spend time together with the 'candidate' and postpone the project start by some months, but then risk delaying and delaying while looking for the right one... and what joint activities would you suggest? Or (b) start the project by yourself with some light involvement by the 'candidate', so get to know each other in the real thing, but then... what kind of 'involvement'? Some sort of advisory? Thanks!

Many entrepreneurs come to us and say "I have this great idea, all I need is a technical co-founder" or "I have a killer technology that I'm developing, all I need is a business co-founder." They look to us to help make the match in the hopes that they will complete their team and live happily ever after.

As a home business entrepreneur I can safely say I am happy having a solo gig, I love having to touch who I work with or not work with. As for arranged marriages, it can probably work..

Jeff, I think you shortchanged the value the arranged marriage philosophy brought to the question. The fact is arranged marriages work in many parts of the world (and through much of history). They certainly don't have higher rates of divorce than that in countries where "love marriages" are more common. You could argue that that's because divorce is not acceptable and people are unhappy, but my informal observation is that within intact marriages people are similarly happy or unhappy.

This isn't a defense of the arranged marriage or a rant about ethnocentrism. Rather, having come from a culture in which arranged marriages are common but having been raised in a culture where love was prized, I've had philosophical conversations with friends about arranged v. love marriages, arguing that the best case perhaps was in the middle where there was some degree of selection for compatibility but that there was also the overarching belief that once married you'd just have to make it work.

So extending this to cofounders, I think it actually works. Context matters. Many people who have worked together previously have worked in contexts that don't accurately reflect the conditions of a startup. So their relationship still may fail if they don't have the right mindset and "pre-marriage" understanding. Conversely, many people who haven't worked together before but took the time to get to know each other and have honest and detailed conversations about what was expected (and realistic) of them in their chosen endeavor could have a high likelihood of success.

The truth is organized weddings perform in many components around the globe (and through much of history). They certainly don't have greater prices of separation and divorce than that in nations where "love marriages" are more typical.

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