Hi Redditors, I wanted to share my experience running a business with friends. A few years ago, we launched a company in the entertainment production space. It lasted only two years. We started on a dopamine, but the cracks showed early.
Here is what I learned:
Never hire a friend's "+1": We had three employees aside from the four founders. The worst performer was one partner's girlfriend. Despite her "top-tier" education and his recommendation, she underperforms and received the most perks—frequent vacations and a higher salary than the rest of the staff. I questioned it, but I eventually yielded to keep the peace. That was a mistake.
Protect your reputation at all costs: I was in charge of investor relations. All four founders signed a pact: no salaries for the first three years to prove our commitment. However, after our first funding round from friends and family, one partner resigned from her day job and demanded a salary due to her "unemployment." I fought this request "violently," but the other three partners talked me into allowing it. We broke our promise to our investors.
Check your ego and listen to veterans: One of our investors was a partner’s father—an absolute legend in the industry. Out of some sort of pride, my friend constantly pushed to do the opposite of his father’s advice. I trusted my partner’s instincts, but ignoring the veteran's wisdom led us into one disaster after another.
The business will fail, and the friendship might go with it: Toward the end, receipts went missing and unknown deposits appeared in our shared account. When I started questioning the person in charge of those specific records, things turned ugly. Confronting a friend about "missing" money is a bridge-burning event.
Passion isn't always shared—especially during a crisis: About a year in, as we faced adversity after adversity, people started going MIA instead of stepping out.
I’m not saying you can’t succeed with friends, but I’ve learned my lesson. I will never again start a venture with friends unless they have reputable business minds and the discipline to match.