MBA2408 Q&A Wednesday: How do I resolve disagreements with my co-founder?

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Hey O. Welcome to the Hundred Dollar MBA Show. No fluff, just the good stuff with our practical business lessons. I' host your coach, your teacher Omar Zenholm and today is Q and A Wednesday where we answer a question from one of our listeners. If you got a question you want to ask, go ahead and email me over@omar100mba.net Today's question is from Tom and Tom asks how do I resolve disagreements with my co founder? Overall, we get along all right and can agree on most things, but sometimes we get into very heated arguments because we both feel strongly about a certain way of doing something or a decision we have to make. How do we resolve it? Do you have any suggestions that could help? Great question, Tom. I've had a co founder for over 10 years and if you work with somebody for that long, you will have disagreements, you will have points where you just don't see eye to eye. And business owners, business founders, they're passionate about what they're doing and it's normal for them to feel strongly about their opinion, to feel strongly about the way they want to do something, especially when there's an opposing argument, somebody telling you, no, that's not how to do it. So in today's lesson I'm going to share with you some strategies that has worked for me and Nicole, my co founder over the years to get over this hurdle, how to settle disagreements and move forward and make the best decision for the business. Let's get into it. Let's get down to business. I want to start by saying that disagreements are not a bad thing. They're not a bad thing. It's actually a pretty good thing because it means you have options, you have different ideas, you have different ways to solve a problem or to reach a certain goal. And let's start there. Let's start with the goal. I always like to start any disagreement with common ground. So it's good to ask or to start with asking, what is success in this situation to you? What is your desired outcome? So each person can express what they like out of the situation. And oftentimes you'll find that they're very similar. I'm trying to accomplish xyz, and it's usually the approach of how to accomplish XYZ is where the disagreement is. For example, you and your co founder might be disagreeing on how you want to market your business. Maybe you want to spend marketing dollars on paid advertisement. Maybe your co founder wants to spend that money in creating great content and doing content marketing. You're both trying to market effectively to get more customers. That's really what you're both trying to do. So it's good to start there. Why? Because it allows both of you to see that you're both trying to move in the same direction. It also reminds both parties what you're trying to do here, what the ultimate goal is. Sometimes we get lost in the minutia, in the detail, in the execution, and our egos get in the way and we want to do things at a certain way. But if you both get what you want at the end, then the details don't matter so much, and it doesn't allow you to really get all worked up about those details. So it's a good place to start. And it's okay if your desired outcomes are slightly different, that's fine. But zoom out a little bit and you'll ultimately find out that, hey, you both want the business to be successful. The next step is an exercise I call Outside Investor. What does this mean? Well, both of you are going to do this exercise where you're going to pretend you're an outside investor, and you're going to lay down the strategy presented by both people, you and your partner. Now, remember who's going to execute these strategies. What information, what experience do they have? For example, let's say you want to run Facebook ads, and you've run hundreds of Facebook ads in the past, and you've spent hundreds of thousands of dollars on Facebook ads before. That's important information when it comes to that decision. On the flip side, every time you run content marketing, you might have been successful. So the point of this exercise is to lay down both strategies, both sides of the argument, both ways of doing something, and then you're going to act as an outside investor, and you're going to act like your company is asking for investment to implement a strategy as the outside investor. Which strategy? Again, you're putting up your money which strategy would you want to to be implemented using your money? Given all the information that's presented now, you might be saying, well, obviously you're going to be biased and you're going to just choose your own strategy. How does this help Omar? Well, here's the kicker. This strategy cannot be implemented by either of you. It has to be outsourced. Just for this exercise, you have to do this. The only thing you can do is advise or instruct whoever you're outsourcing this work to. Why is this important? Because most of the time, we lean on strategies, we lean on decisions, we lean on things that we're comfortable with, that we know we've done before. But if we're not going to do it ourselves, we might not feel so comfortable with it. And a big reason why we're resisting something else is because we don't want to risk doing something new. So if you both agree that, hey, neither of us are going to work on this, we're going to outsource the work. This is hypothetical, of course. Just work with me here. And we can only coach or advise the person that is working with us. We. Which one would we do? Which way? Which decision? Now, this changes things, because now that you're not doing the work and you're not doing things that you've done before, you have to rely on the fact that this is a good, solid direction decision, and not just rely on your hard work and grit. Sometimes we think as founders that I can just work hard and I can make it happen. And oftentimes that might be true, but a lot of times it's not. It's just a poor decision, and you can't work your way out of a poor decision. This is what I've learned over the years, that often the difference between success and failure is just the decision, the direction you went in, not how hard you work. And it's kind of something you don't want to hear because you want to feel like you have more empowerment than that, but you do. You're making decisions. But at the same time, we have these beliefs that hard work pays off and all these things. And it's true. You got to work hard, but you can end up working hard on the wrong thing and you won't move forward. Now, another strategy that I've heard from other co founders David Hannemeier Hansen and Jason Fried, who are the founders of Basecamp and 37 signals their strategy is whoever feels more passionate, whoever expresses more vigor, more love for the project, or for this decision, ultimately gets to choose. Why? Because they feel like, hey, if you feel that strongly about it, you should make the decision, it means more to you than me. And then there'll be times where the roles will be reversed. And I kind of like this because often when you feel strongly about something, you have something inside you that says, go for it. This is something good. This is the direction you got to move in. Maybe the other person doesn't have that same thing and you want to make sure that you're moving in the right direction despite the misalignment. Now, I have to say that this has to be backed with information, with data, with real reasoning. When you're working alone with no co founder, you can go off your gut. That's fine. You're the one who's gonna have to suffer the consequences of those decisions, positive or negative. But if you have a co founder or co founders, you're not alone. The ramifications of those decisions are gonna be felt by more than you. So you have to have a rationale behind those decisions to back you up.

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Now many people like to do a pros and cons list when it comes to disagreements. I'm not a big fan of this because you have to find the cons are the opposite of the pros and vice versa. And it really doesn't lead to a decision. What I like to do is an upside versus downside. This helps me and Nicole make better decisions, especially when we have a disagreement. What does this mean? Well, upside means what is the potential upside of this decision if it goes right, if it goes well? And what's the potential downside? What are we going to lose if it doesn't go well? If the impact of the upside is twice as large as the downside or more, it's worth taking a look. It's worth actually seriously consider implementing. Why? Because you're playing the Long game. You're going to have many of these decisions along the way. And chances are, let's say you make 10 decisions in your business in the next 10 years and half the time you are right about these decisions and half the time you're not. And every time I make that decision and it's the right decision and I have an upside of 2 or more 2x or more often it's like 3x, 4x 5x. The worst case scenario is you're back to where you started, meaning you didn't lose, you didn't win, but most of the time you're going to have more than a 2x benefit on the upside, meaning you will be ahead. You could do the math on your own, but basically this is what we've worked out. Hey, if we make this decision, let's say we have a new pricing decision and this will triple our revenue. But the downside is it might bring our revenue down by X amount. It might be worth the risk. Now, when you take that decision, you can take it in steps so you can feel it out and make sure that you have a backup plan, a way to reverse it, all, that kind of stuff. But upside versus downside is a great way to look at it because at the end of the day, sometimes you just are going to roll the dice. And if the upside is much more than the downside, it's worth to make that decision consistently. Now, some co founders like to get a third party involved, an advisor, a coach to kind of settle it for them. And I'm not totally against it, especially if both co founders or the co founders agree that whatever the coach says or the advisor says, we're going to go with. But I've never really found that coaches really just say do this. Most of them just kind of give you your options and say the decision is ultimately yours. But even in that process, they might give a perspective that one of you are not seeing and that will allow you to kind of go one way or the other. And this is where that initial intention really matters, what you're trying to accomplish. If whatever decision leads down to that same path, then you should be okay. If you're aligned with the ultimate goal, you should be okay. Good co founders trust their other co founders as well. And it's okay for you to say, hey, I'm going to trust you on this one because I see that you're very passionate about it, I see that you've given good arguments, but there's going to be a time when I'm going to need you to trust me. And it's okay to have that give and take. Having a co founder is like any relationship in life. Friendship, marriage, sibling relationship. It requires investment, it requires sacrifice, it requires communication. And ultimately it requires you to care about one another, care about your futures as founders, and the future of your business. And if you're coming from that perspective, you should be okay. Thanks so much for listening. Thanks Tom for the question on Q and A Wednesday. If you got a question you want to ask, go ahead and email me@omar.net and I'll make sure to answer right here on Q and A Wednesday. If you love this podcast, if you want more of this great stuff, hit subscribe. Hit follow on your favorite podcast app right now on Spotify, Apple Podcasts, Overcast, it doesn't matter. Just make sure you hit follow right now so you get our next episodes automatically. And you get access to over 2,400 episodes, 2400 business lessons in our archive, in our back catalog. Go ahead and do that right now. Before I go, I want to leave you with this it's okay to argue. It's okay to have disagreements. Don't feel bad. Don't feel like this whole relationship is disintegrating. No, celebrate your differences. It's okay to have differences of opinion. This is how we grow. This is how we learn. This is how you have a dynamic team, a dynamic company, because you have different perspectives. It would be boring and you'd have a boring product and service if you all just thought alike in your business. Not only in your co founders, but your colleagues. The fresh, different and even opposing opinions make a great company. Thanks so much for listening and I'll check you in Friday's episode. I'll see you then. Take care. Of.

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