I Went into Business With My Best Friend, I Regretted It Immediately

When you watch business shows such as Lions Den here in Kenya and Shark Tank from the US, there are two ways of looking at what happens in the shows. You see investors put up their money to support businesses they find promising. The other way to look at it is from the founder's perspective, where they had an idea and found a person to front them the money they needed to actualise the idea.

The story of how I lost a best friend, a business, and money illuminates what's at stake for both perspectives. I was the investor and my friend was the one with the business idea.

However, at the time, these terms were not as well laid out. We were friends, so we leaned on our mutual understanding to make the business work.

Friendship

Our friendship was born at a tragic time. In 2007, when the post-election violence happened. My friend, Dennis (who is also my cousin) and I lived in one of the hotspots, Molo. At the time, we were in primary school. It happened that Dennis got displaced and moved to our village. We started hanging out together and grew to be the best of friends.

Later, we went to the same high school but parted ways when we all went to campus - but we remained friends. 

The Business

After campus, we tried to do different things to make a living, but after three years, nothing was substantial. Following the typical advice in society that if you cannot find a job, become self-employed and create a job for yourself, we thought, Why not try and take the situation into our own hands?

I had no experience in business, but Dennis had done some tu biashara while in college. He was one of those guys who move from hostel to hostel selling clothes, be it shirts, sweaters, undergarments, socks, and more. 

We pondered on the idea and thought it would be a good idea. I would be the financier and we would lean into Dennis’ experience to get the business off the ground.

This was an opportunity to be a shark or a lion. It was my moment to back someone with the little I had and then watch my money grow. As you can already tell, this was very naive of me.

Business School

You know how when you go to any school to learn something, they charge you school fees. Life also has a way of charging you school fees for the lessons it teaches you. For me, I had signed up for business to grow my money, but it turned out there were so many things I did not know about business, and the investment I put in was charged as my school fees for the lessons I learned. 

Here are some of those lessons:

Good Friendship Does Not Translate To Good Partnership

People always ask the question, should I go into business with my friend? While every situation is nuanced, going into business with a friend adds to the risk of the business. This is because you tend to overlook so many things for the sake of friendship. However, if you are able to clearly outline roles for each and both of you are competent enough to each do their job, maybe you can make it work, but it requires a lot of self-awareness and accountability.

In our case, we were not as savvy. When things got tough, my friend started pulling back, but also on my side, I was not savvy enough to figure out, apart from the money, how else could I support the business? It became the case of a hot potato. But I had the most risk since I had invested my savings. I ended up being burned.

Skin in the Game

Whether you are going to be an investor or the founder, you want your partner to have skin in the game. Skin in the game is the amount of risk the other person in the business carries. The risk should be enough to drive them to want to ensure the business succeeds. One thing that is for sure in business is that there will be tough times. But in tough times, you should pull together. But if one does not have skin in the game, they will pull away, it’s much easier that way for them.

Only Do Business You Know About

Before partnering with someone to go into business together, ask yourself, if you were running the business on your own, do you have what it takes to make it work? If not, probably it is not the business for you.

Doing business you know about helps you understand the market better, hence curating the perfect products for that market. It is also satisfying to serve customers in that market, making it more rewarding for you and your customers.

In my case, I did not know anything about the business and it is not a business I would do on my own. Hence, when my friend pulled back, I was left with a stock I could not move.

From the outside looking in, it is easy to say, just get out there and sell. However, for me to clear the stock, it took a lot of emotional energy to convince myself to step out there and sell. This became exhausting after a few weeks and I had to count my losses.

The Losses

In my pursuit of being a lion or a shark, I learned why these shows are named after predatorial animals. It is because business is tough and you need to be aggressive to succeed. The moment you slack, you lose.

In my case, I lost a friend, a business, and my savings.

Take Away

I do not know if I am yet a shark or a lion, but now I know what it takes. With the costly lesson, I have been introduced to Business 101. The school fee was quite steep but I believe I am a good student and in my next venture, I will do much better.