We used to be friends – losing friendships in the startup game

This story is dedicated to every startup team of close friends who had the courage and wisdom to seek outside help when faced with the challenge of balancing their friendship with the needs of their business.

This story begins with two close friends who dreamed of one day starting a business together. 

Their relationship began in early childhood, where they forged the strongest of bonds by overcoming the many hallmark growing pains of adolescence and early adulthood.  Collectively, they believed that the strength of their bonds of friendship gave them a competitive advantage in any endeavor they decided to pursue.

However, startup life can be a distant reality from the fantastic stories that make up the lore of Silicon Valley and its legendary unicorns. 

As the business started taking off, the two newly minted entrepreneurs transitioned into their ‘jack-of-all-trades’ roles, where no job was too trivial or mundane to take on.  All the while, they made it a top priority to sustain the level of trust they shared in the past.  However, it proved difficult at times, especially when things seldom went according to plan. 

These friends quickly learned that startup life was far more challenging and unpredictable than either had anticipated.  The day-to-day experience often felt like riding an emotional roller-coaster with euphoric highs and abysmal lows.  In order to forge ahead, they had to constantly remind themselves that there was light at the end of the tunnel and that, if anyone could pull this off, it would have to be them.     

Attempting to grow the business felt like drinking out of a fire hydrant.  There were countless jobs that needed to be done on any given day and seemingly never enough time.  Coveted opportunities were missed and careless mistakes were made.  As a consequence, tension began to manifest internally.

Somewhere along the startup journey, the friends experienced an ‘evolution’ in their relationship.  They no longer saw one another as close companions, but rather as distinct parts of a greater whole, their company.  It all started when potential investors applied pressure for them to choose a CEO and finally culminated at a point when the vast majority of time they spent together was during work.

After many trials and tribulations, the company finally reached its inflection point and began to scale.  New talent was brought on-board and a new organizational structure for the company was put into place.  Soon thereafter, the non-CEO founder discovered that his new role no longer made him privy to the internal discussions that were effectively shaping the future of the company.   

Despite the fact that his new position was a ‘solid fit,’ given his functional expertise and area of interest, he felt dejected by his relegated position within the company.  It especially hurt him, since he knew that, but for his early contributions, there would be no company in the first place.  It became clear that, over time, his identity and self-worth became inextricably tied up in the business venture.  Much like a war-hero during times of peace, he felt forgotten, discarded and confused.

Not before long, the same founder decided it was time has come for him to leave.  The CEO, his once dear friend, pleaded with him to stay.  He asked of his friend, ‘why would you choose to leave now, after we have accomplished so much together and are finally poised to reap the bounty of what we have struggled so long to sow?’   

The exiting founder replied, ‘as satisfying as this feeling of success may be, it will never be able to replace what I had lost along the way: my brother, dearest companion and closest friend.’  

The CEO took a long, hard look at his dejected partner and could only muster up the courage to utter the following, ‘I’m truly sorry you feel that way,’ before turning his back to him and walking away. 

From that day on, the two former friends rarely spoke to one another, but they shared a common curiosity as to what might have been, had they only done things differently to preserve the friendship. 

Noam Wasserman, author of The Founders’ Dilemmas & former HBS professor, surveyed over 6,000 startup teams and found that 65% of startup failures are due to co-founder conflict or ‘people problems.’  He found that teams made up of close friend performed poorer than teams made up of former co-workers or even complete strangers.

At The Resolution Co, we understand both the appeal and risks of entering into business with close friends or family members.  Let us help you navigate the dynamic of your working relationships by setting expectations early-on that will protect your cherished relationships from the occupational hazards of starting a business together! 


Chris & Nigel