Like most children, success and what life would look like when I “made it”, was a frequent topic that occupied my imagination. Thoughts like where I would live, the kind of car I would drive, and the type of house I would buy my mom all crossed my mind. But above all, as an aspiring entrepreneur, I wondered who I would make my fortune with.
As a student of the game, I knew conventional wisdom argued against mixing business and friends. But I also know financial success isn’t enough to sustain me as my fulfillment is ultimately attached to my happiness and, “The happiest business in all the world is that of making friends, And no investment on the street pays larger dividends, For life is more than stocks and bonds, and love than rate percent.”
In the same breath, conventional wisdom also tells us that business is about relationships. And aren’t friendships some of our strongest relationships? Many examples exist of business partners that leveraged the bond of a friendship to build an empire. So where is the line in the sand? When does a friendship turn business relationship become a recipe for disaster instead of the catalyst for success?
Personally, I am all for mixing business with friends as I believe there is power in our circles. However, it’s hard to ignore the countless examples of friendships that ended as a result of joint business endeavors. Recently, I started reading the 48 Laws of Power by Robert Greene and the 2nd law states, “Never put too much trust in friends, learn how to use enemies. Be wary of friends they will betray you more quickly, for they are easily aroused to envy.” After stating the law, Robert Greene provides some unfortunate examples of people in history that violated the law. Not wanting to accept it at face value, I kept reading, hoping to understand why this was indeed the case...Towards the end of the chapter, he explains that the root of the problem is ingratitude.
- “Men are more ready to repay an injury than a benefit because gratitude is a burden and revenge is a pleasure.” - Tacitus
- “The Jaws of ingratitude. Knowing what would happen if you put a finger in the mouth of a lion, you would stay clear of it. With friends you will have no sure caution, and if you hire them, they will eat you alive with ingratitude.” - Baltasar Gracian
Nonetheless, I realized that the problem wasn’t friendship itself but the dynamic of the relationship.
TRUTH & LOVE
All healthy relationships require Truth and Love. Unfortunately, most only have one or the other, very few have both. Friendships, in particular, are often based on Love. Robert Greene said, “The problem is that you often do not know your friends as well as you imagine. Friends often agree on things in order to avoid an argument. They cover up their unpleasant qualities so as to not offend each other.” Many friends turned business partners don’t work out because a successful business relationship requires truth and if truth has not been apart of your friendship it’s difficult to add it to the business relationship.
Truth: “Not all of my friends would be a good fit for our culture, and that’s fine, but those who have been a fit understand that friendship isn’t a substitute for accountability. Hiring or starting a company with friends is not a choice I would make lightly, however the implicit trust and chemistry is invaluable if you can make it work.” – Joshua Backer
If accountability or truth is not apart of the friendship it will be difficult to incorporate them into the business relationship. Friendships must evolve and mature beyond hanging out every weekend and IG Boomerangs. Rather I want my friends to be people that challenge me, hold me accountable for my actions and say what I need to hear not what I want to hear. In a recent interview with The Breakfast Club, Nipsey Hussle touched on the accountability that existed within his friendship well before he became a well-known artist. He said, “wrong is wrong and right is right, the people that love me will tell me when I’m wrong. In the moment they will ride for me but when we are in private they will check me.” This type of accountability in a friendship makes it clear why Nipsey is one of the few artists that was able to transcend industry norms and create an empire with his older brother and 2 best friends. Nonetheless, disagreements and confrontation between friends is a requirement. No one is perfect, even I Nate Perro get out of character sometimes, so it’s imperative that I have people around me to keep me in line.
Love: The amount of truth a relationship can handle is proportional to the amount of perceived love that’s present. - Henry Cloud
Recently, I was listening to the Your Move podcast with Andy Stanley. In the “What Happy Couples Know” series he touches on how expectations create ingratitude. He explains that expectations create a debt-debtor relationship, which ultimately removes the possibility for love to be recognized or expressed. Andy poses the question, “how much gratitude do you express to people that pay you what they owe you or do what they are supposed to do? None. When someone owes you money and gives you the money, you don’t see it as a gift. You see it and receive it as a payment.”
In the Draft Day article, I mentioned how last year I committed to giving each of my little cousins a birthday present. Initially, things were going as planned then in April I made a huge mistake. I sent one of my cousins his birthday gift, forgetting that his younger brother’s birthday was a week later. One evening I get a call and on the other line was my little cousin crying saying, “Nathan, you forgot my birthday.”...damn. In my head, I’m like, “Nathan you really messed up this time.” I tell him next time I come home I got you and as promised I came to town bearing gifts. When he saw me he walked up and said, “Nathan, where is my gift?” At that moment, I had an intense urge to choke-slam him and say “happy birthday” (lol) but I withheld myself and told him that I didn’t owe him anything. He then went on to say, “but you gave my brother a gift, etc…” After a few minutes of back and forth, I finally take out the money and he grabbed it and took off running.
The problem with my little cousin and many of us is that we believe life owes us something when we are owed nothing. Yes, it was not “fair” to give his brother a gift and not him, but as my pops used to say when I was a kid, “who said life was fair?” The worst part of it is that he was so caught up in his expectations of what he felt he deserved that he didn’t even stop to say thank you. Moreover, getting rid of our expectations of others is how to prevent ingratitude in our relationships.
In addition to Truth and Love, there are some additional things to consider when entering a business relationship with friends.
BIGGER THAN MONEY:
“If someone comes for money they will leave for money.”
The odds are stacked up against anyone who dares to embark on the entrepreneurship journey. Within the first year of operation, 33% of all businesses fail. Adding friendship into the mix, I would imagine that the chances of failure are much higher. For this reason, both the vision and the friendship has to be bigger than making money.
- Vision: The desire to make money is never enough for people to withstand the pressures of entrepreneurship. Survival is normally the result of a relentless pursuit after one’s vision. Therefore, if the business is not founded on that vision, but instead on money, it is unlikely to succeed.
- Friendship: Any celebrity that has experienced a financial downfall will tell you that as their money dried up, so did their phone. Every business will experience financial trouble. Only real friendships will be able to withstand these troubles when they arise.
EVALUATE YOUR FRIENDS:
Too often our mental capacity is judged by our formal education. Despite how it may appear, learning happens in places outside of the classroom. In fact, many of the business moguls I highly regard are high school and college dropouts. Evaluating friends is deeper than seeing where they are currently or looking at their resume/ GPA. It’s about assessing their talents and character as well as understanding if they are willing to put the work in required to be successful.
On the other hand, I would be remiss if I didn’t say be careful. Not all friends are capable or a good fit for a business partnership. In the Nas episode of the Netflix series Rapture, he said “You will have some wise people that will take advantage of the opportunity and grow into something they never dreamed of and you will have others that are incompetent that can’t figure things out for themselves. All you can do for those people is love them from afar.” Recognizing and being ok with the fact that not everyone will seize the opportunity presented to them is key.
Think about group projects, on numerous occasions I’ve been burned by a friend. Initially, I assumed they would be a good team member simply because they were my friend, but soon after the project started I found out that wasn’t the case. In fact, I realized my friend is actually pretty lazy. Like Robert Greene said, often friendship blinds us to the flaws of our friends. So remembering to always evaluate them can prevent future headaches.
OBSERVANCE OF THE LAW
Lebron James pioneered a business model that will transcend his days in the NBA. Although the billion dollar Nike lifetime deal is regarded as the most notable part of his off the court success, I believe his decision to invest in his friends/people from his community by partnering with them to create their own sports marketing company will ultimately be his legacy. The idea of the biggest name in the NBA handing the keys of his business empire to his “posse” was unprecedented and seen as foolish by the naysayers. The narrative of athletes and artists that squander their fortune has always been about the friends and family members that milked them dry. So putting those same people on the payroll seemed like a one-way ticket to bankruptcy. But I would argue that there is another narrative that is not so frequently discussed. The financial advisors and accountants, the people who these athletes and artist trust with their money, have sometimes turned out to be nothing more than a thief in the night. From Bad Gyal Rih Rih, who lost 9 million, to Tim Duncan, who got swindled out of 22 million by his respective accountant. Many have suffered losses as a result of their “trusted” advisors. For that reason, people like Lebron accept the risk of putting their lives in the hands of someone who does not have the experience YET but has trustworthiness and an eagerness to learn.
In 2006, 3 years after being drafted into the NBA Lebron fired his agent and "The Four Horsemen” created L.R.M.R. Management Company. Maverick became the CEO responsible for all of Lebron’s endorsements. Randy served as his chief of staff and Rich began his journey of becoming a sports agent. The beauty of the story is that Lebron could have hired anyone but instead, he decided to empower his circle with an opportunity that would allow them to reach their full potential. And now these same friends, that were once seen as less than, are highly regarded in sports and have their own successful businesses separate from Lebron. After years of learning from sports agent Leon Rose at Creative Artists Agency, Rich started his own agency, Klutch Sports Group, where he now represents a handful of NBA players. Maverick created Uninterrupted, a digital media company that allows athletes to tell stories that matter to them. It’s hard to imagine that Rich Paul would represent several of the top players in the league as he was selling jerseys when he met Lebron or that Maverick would facilitate a billion dollar deal with Nike since before partnering with Lebron he was working for Nike. Moreover, the combination of Lebron giving them an opportunity and them taking advantage of it makes their story truly remarkable.
Nonetheless, recently I had a conversation with my friend Brenton and he asked if you had all the money in the world what would do? Thinking about it for a while, I said my ultimate goal is to teach people how to win with their circle. As I mentioned in the Draft Day article, my goal is not to get rich and take care of my loved ones, rather provide them with the opportunity to take care of themselves. I firmly believe this model is the only way our community can build generational wealth. So take this post as the start to accomplishing this mission. Stay woke and stay tuned!