Building an Ecommerce Business, Part 1: Choosing Partners
Practical Ecommerce’s publisher asked me to host audio interviews for the provider’s”Ecommerce Conversations” podcast. The subjects, he said, could be anything that helps fellow merchants.
I’ve opted to create a protracted series on launch, growing, and selling an ecommerce company. For every episode, I will interview an entrepreneur or business colleague. I’ll explore topics like raising money, selecting a platform, hiring workers, marketing tactics, and, finally, selling the company — roughly 20 episodes in all.
This initial installment will deal with the process of selecting business partners. My two partners in Beardbrand are knowledgeable and supportive. Our connection has been crucial to the corporation’s growth. I asked one of these, Lindsey Reinders, to provide suggestions and ideas for selecting partners.
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What follows is the complete audio interview and a transcript of it, edited for clarity and length.
Eric Bandholz: Please speak about my connection with you as a business partner.
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Lindsey Reinders: We met at a networking event. We had our own companies; we’re there to meet prospective clients. We had the drive to make our company successful. You’re doing some freelance graphic design, and I had a little business I was in the process of rebranding and constructing a site for. We talked, told jokes, enjoyed ourselves, and then attached over Twitter.
You ended up helping me redesign my site. We did a nonprofit beard and mustache club together. It had been eight or nine months after we ended up at that startup weekend event, where we came together to lead a group. That was when we decided we wanted to work with one another and with another business partner, Jeremy McGee.
Bandholz: What characteristics were you searching for in a business partner?
Reinders: there are a number of objective things which you need in a business associate, irrespective of your personality. For me, one of these traits is honesty. 1 thing that was clear in that media event was that you’re actually offering your help and did not have ulterior motives. It was clear that you were honest and generous with your time. That honesty, once you’re interacting with a person who is ready to give you what they must offer with no expectation of something in return, is really important when it comes to searching for a business partner. You need to be able to trust that the person you’re speaking to isn’t motivated by his own profit.
Bandholz: Have you had experience working with partners?
Reinders: I worked with small teams in companies, for new jobs and similar things. I had experience with people not pulling their weight or not showing the same initiative. And that is another thing that is important [in picking a partner]. You want to find somebody who matches your devotion to the job you are doing, to push the company forward.
Bandholz: I have had many failed solo projects that never got off the ground because I had no one to lift me up when I hit the doldrums. In those circumstances, business partners can be enormously useful. What makes for a poor business partner?
Reinders: there are a number of philosophical things to be aware of. If you are keen on construction, system, and process, it is ideal to get a business partner with the same regard for those characteristics. Conversely, it can be frustrating if you are more philosophically aligned with actions and a spouse should devote plenty of effort preparing the game board before you begin making moves.
Your goal to construct a company and run a firm should align with the sort of company your partner wishes to build. If her ambition is to create this multinational corporation with a corporate sort of environment and yours would be to just stay lean and produce a fantastic lifestyle for yourself, there is a fundamental difference in what each of you needs in the venture.
Bandholz: Pundits often imply that business partners should be complementary, with different skill sets and outlooks. Do you agree?
Reinders: I agree that you need complementary skill sets in the combination. We have addressed that early on by hiring people who are different than us. However, I’ve appreciated spouses with similar characters. There’s such a need to port and support that’s inappropriate to do with workers, even if they have the same personality. Nevertheless, it’s healthy and okay with your co-owners.
Bandholz: How should business partners tackle conflicts with one another?
Reinders: The healthiest thing that we have done is to handle conflicts immediately. We agreed early on to provide each other the benefit of the doubt. I think you and Jeremy are great men and that you have the best intentions for Beardbrand and for us as individuals. Misunderstandings are usually in the heart of issues. If you are willing and dedicated to getting those hard conversations with one another, knowing that you are coming from the area of mutual respect, you get conflicts from the way quicker.
Bandholz: How should founders decide equity proportions?
Reinders: This varies from company to company depending on the conditions. We had a generous approach with an upfront agreement on how the equity could be structured, and how it could be got, and when it could be faulty. We all had an opportunity to test on the connection prior to the company incorporated with a bank account and all that.
Bandholz: We as a team have contrarian views on this issue. Most external advice is all about contracts, getting it in writing, getting the lawyers involved, and signing everything. To put it differently, you are getting married before you are going on dates. But we think in such dates, so talk, when choosing business partners. We all discussed our views of the company relationship. We wrote it in a Google Doc and set it in an email. We can return to it as needed.
Reinders: I recall vividly the conversation. It was honest and frank about how we all perceive the value to be as it stood then, and what we think the possibility was. It is a healthy way to test on the venture and to proceed.
Bandholz: We did have a fourth partner at Beardbrand. We have split ways. What is your advice for breaking up with a business associate?
Reinders: He’s someone I have a whole lot of respect for. I remain in touch with him. However, it became apparent to all four people that we did not align. We weren’t inclined to put the same energy and passion into Beardbrand. We had several conversations that addressed it. We decided that it was better to separate. Having those discussions face to face, however uncomfortable, is vital. Because you may get caught up in subtext and minutia if you are looking for those discussions over email.
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Bandholz: Where should early entrepreneurs find business partners?
Reinders: Where they are comfortable. You and I met at a young professionals networking event. I met Jeremy in a beard and mustache media occasion.
Bandholz: Anything else?
Reinders: a great deal of good businesses do not make it off the floor because the partners do not put the energy into their relationships. The major reason businesses fail is their service or product. But having great business partners is instant. That connection is what makes or breaks your business.