I never liked the concept of family businesses.
For the past 20 years, I’ve seen how hard it is for my parents to separate their personal life and work life. It’s easy to carry over differences at the office back home. It’s easy to turn weekends into workdays. It’s easy to leave the most important aspects of the business (like finances) to yourself. And it’s really hard to figure out an exit plan.
Over the past five months though, I’ve begun to see that many of the challenges of operating a family business is manageable. And actually family businesses have many built-in advantages too.
Those advantages can support the business in powerful ways as long as the family operators can overcome the biggest challenge with family businesses — controls and governance.
I’ll detail some of the ways I’ve tried to tackle controls and governance at Sunright in a separate blog post. Today, I want to highlight some of the unmatched benefits of working on a family business together.
Founder dynamics:
- You know each other’s personalities, tendencies, strengths, and weaknesses really well
- You’ve already accepted each other for who you are
- You’re committed to each other on a level that is higher than normal founder relationships
- The trust is already there
Communication:
- You can talk to each other whenever you want
- There’s no bull
- You’re used to fighting and making up
Decision making:
- Making decisions can be a very quick and painless process
Culture:
- Familial obligations almost guarantee that you’ll be working your butt off
- The time horizon for investment decisions is often longer than VC type of businesses, and this lends to more willingness to take on long-term investments
Personal:
- For kids who choose to work with their parents, it’s also a one-of-a-kind opportunity to interact with and understand their parents’ lives
Many of the advantages of operating a family business are some of the most challenging parts of founding a startup. Founder discord, convoluted decision making, and short-term thinking can seriously hamstrung startups.
These advantages don’t make family businesses invincible. In fact, the largest companies in the world aren’t family businesses. However, they create very different “founder” experiences compared to VC funded startups.
