sticky situation: my promising start-up and my incompetent business partner

Discussion in 'Starting a Business' started by FredBrown, Sep 4, 2014.

  1. FredBrown

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    Sep 4, 2014
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    18 months ago, my friend came to me with a good idea. We agreed which half of the work she would do and which half of the work I would do to create the product, and we'd be 50/50 partners.

    Fast forward 18 months, and I've done 95% of the work to create the product. I quickly found that not only is her skill-set and relaxed personality type ill-suited to product creation (insufficiently critical, too relaxed, doesn't push hard enough, think deeply enough, bad language skills, etc etc,), but she is completely hopeless at marketing (extremely bad ideas, extremely bad at executing them), and furthermore, I wouldn't even want her writing someone important (says things that shouldn't be said, doesn't say things that should be said, poor use of spelling and grammar), or calling someone important (from what i've heard, plus she has no sales experience). She doesn't recognise the limits of her abilities. When she receives negative feedback from me, her feelings get hurt and she lashes out. Containing her incompetence is an extra job for me. I would not hire her to be my assistant, if she came to me as a stranger.

    I am extremely confident my start-up is going to make tens of millions of dollars, maybe over a hundred million dollars over the next couple of years.

    I have no contract signed with her yet but her face is all over the content of my first product. She is therefore protected by her face being all over it. Right now I am protected in that I have allowed her no access to 90% of the content (the important 90%), explaining to her that a contract must be signed first to protect myself. The company has not been incorporated yet.

    She is a lovely person and a good friend, but this start-up has been built on my sweat, blood, and love, and thousands of hours. She is well-intentioned and always wants to do as much work as possible but as I said, I am trying to contain her.

    I am not happy with this 50/50 deal and am trying to decide how to move forward.

    Least aggressive idea: make millions off of my first product on a 50/50 basis, and walk away after the translations have been made. This would involve at least a year of around-the-clock toil for me, doing close to 100% of the work for 50% of the money, assigning her menial tasks that will no impact on anything important. This also includes hiring national managers and sales teams and overseeing them. Building infrastructure. But since I don't want to spend my adult life working 100% and getting 50% back, I would then walk away from the company, and start from scratch again. This would immediately leave me with concern of competition from her: she knows all my ideas and she can beat me on one, and only one area: speed. She could potentially beat me to the markets with my ideas (which include extremely strong internet marketing innovations). Her products will be poorly executed but she could make more money than me potentially through the speed gained by her lack of quality control.

    Moderately aggressive idea: I suggest a 70/30 split either across the board, or some sort of contract where she gets 70% on this product, and 0-10% on the future products or something. This is further complicated by associated shop (selling third party products) that will gain publicity from the success of our own-made products. Not quite sure what % on this would be agreed.

    Most aggressive idea: I take the content hostage. I explain that the project will be deleted unless she agrees to a contract that completely reflects past work and future work performed. e.g. 15% of this product, 0% of future products, 15% of the associated online shop. I explain to her that I am serious because I could, potentially, with a small loan, now completely re-make this product very rapidly in the space of e.g. 2 months, without her face on it. The content would actually be better through the benefit of experience, as well.

    To be honest, I feel so badly about how hard I have to work, and will always have to work, the idea of her making many millions completely off of my back over the coming years will certainly spoil our friendship whatever happens. The least aggressive option saves no friendship for me. The moderately aggressive option might.

    I've got no experience in a situation like this. I have been seeking a lot of advice and hearing a lot of different opinions from friends and family members, and am now seeking advice from other business people. Any wisdom or thoughts would be appreciated. What would you do? What do you think is actually fair?

    P.S. Her idea was actually passed to her by a friend and was not a ground breaking idea. It was actually a very standard one that I had considered in my head before. Furthermore, the actual idea evolved highly over the course of 18 months. It is not the same as the original idea anymore.
  2. CoolHandCol

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    Aug 17, 2014
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    You have to decide which is more important to you, her friendship or the business. You can not have both I'm afraid - no matter how you handle the situation.

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