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I started working on a SaaS application with a friend of 30 years 9 months ago. The original idea came from me and my friend/partner/CTO helped with the development of the application. Throughout the months we have had our differences of opinions but now it seems like its getting to be more than just a few differences. How far do you go making compromises? Our differences are in the areas of:

  • Importance of the look and feel of the UI
  • Selection of investors to present to
  • At what point to hire the additional technical crew
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Great question, Arman! – Slavo Oct 20 '09 at 12:22

6 Answers

up vote 5 down vote accepted

It comes down to roles and responsibilities. Fundraising, marketing, development, sales... Agree on that first. You have to agree what functional areas each of you owns and then there will be an ultimate final decision maker. It sounds like you are the CEO so you should be the final say overall. And you should agree to that now. If your friend/partner doesn't agree on that then I'd say you have real problems.

I strongly disagree that everything should be a consensus. You aren't going to have equal expertise in each functional area so you have to give some rein to each other to make decisions. If you don't trust your friend/partner to make decisions in their areas then you have the wrong business partner.And rarely can you afford to slow the whole company down to try and always convince each other and come to an agreement. You have to move fast, I would expect since that's pretty much true with most startups. Ultimately if it's a significant decision, you as the CEO should be the final say.

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Chris thank you for your answer. All answers here have been very helpful. Yours has shined a new light on my issue. – Arman Arami Oct 19 '09 at 3:21
up vote 0 down vote

Which investors to present to seems like an odd issue to be having. Is it the particular investors, or the level of investor (how much capital, what level of experience, seed vs. a larger sum)?

I think when you get to the bottom of this issue, the others may solve themselves. For example, if you want higher caliber investors, your UI better be intuitive, attractive and fast - or you better have a helluva track record in turning an ugly idea into a winner.

Similarly, you can get additional engineer help by coughing up a little equity. No sense giving someone a salary unless you're taking on large amounts of capital, or have cash on hand. Which brings us back to the investment issue.

One of you wants to grow organically and one of you thinks the "win" is in getting a lot of venture money. You guys need to get on the same page with that and then I think the rest will work out. In any case, you should NEVER have to sacrifice in your vision of what the end product should be. Maybe a feature here or there, but you have the right to deliver on your vision.

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On the issue of investors, I will share with you the scenario and I have to say its not about the amount of investment necessary. I had secured for us the opportunity to present to a VC firm but my partner reviewing the VC's portfolio had decided that since they have not invested in SaaS solutions they will not understand our product and therefore will not invest in it. My philosophy is the more your present to VCs the more feedback you will get and its harmless. – Arman Arami Oct 19 '09 at 4:48
I don't think there's as much risk in them not understanding it. (if they can't understand it, how many of your potential customers will?) I think the bigger concern is whether they will have the experience and connections, in your space, that you might need. Overall, I would say pitch as much as you can without wasting anyone's time. Obviously don't pitch a firm that focuses on green tech if you're building a social network. Otherwise, take every meeting you can. They'll poke holes in your ideas, tear apart your market forecasts and ask tough questions. Nothing to lose from that! – Justyn Oct 19 '09 at 9:00
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Sit your friend and co-founder down and talk about the issues you have openly and honestly. Then, hash out who does what. If you can't come to an agreement on how to run the company, then think about getting another founder that can focus on the business side of things. Sometimes it take another, impartial, person to sort out the differences. If after that you guys can't get along, then you should not be working with each other.

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up vote 1 down vote

If the two of you are having issues this early on such fundamental items such as the ones you describe, it is not a good sign. My suggestion is that your friendship is far more valuable than your business and that you find a transition out of the business relationship together and work on salvaging your friendship.

Matt

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up vote 1 down vote

If this person has been your friend for 30 years, ask yourself what is more important. the friendship or the business.

If it turns out to be the friendship, you should sit down together and question the decision to start a company together.

If it turns out to be the business, you have some fundamental disagreements to clear between you or continue alone/spilt the business/buyout your partner.

If it where me, I think I would consider the 30 years of friendship quite valuable.

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up vote 3 down vote

You shouldn't be having to compromise on these issues - you should be working together to a consensus, where one of you persuades the other or you come up with a solution that you're both happy with. In ten years of running a business with a friend I can't remember a single time we've done something that one of us disagreed strongly about. Sure, we've disagreed strongly about stuff going into a conversation, but we've always managed to reach a conclusion we're both happy with.

If the two of you can't work through these issues then it sounds like you might be in trouble.

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+1, these issues are too fundamental. Wall color you can disagree on; how to present yourself, how to develop the product and the company, these aren't OK. – Jason Oct 17 '09 at 20:15

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