We Are Family: The Secrets to Running a Successful Sibling Startup

shutterstock_165826016.jpg

Starting a company with your brother or sister can work – but it can also put both your company and your family at risk. By Jennifer Alsever (Freelance Writer)

This post originally appeared on Inc.com

Adora Cheung had tried starting companies with co-founders before. But it wasn't until 2012, while working on her laptop in her brother's filthy apartment, that Cheung both hit on a great startup idea – Homejoy, an online service that helps users locate a housecleaner – and found her ideal partner, her brother Aaron. Today, the pair jointly run Homejoy, which operates in over 30 markets and has more than 200 employees and $40 million in funding.

Their success is remarkable not only because they conquered the challenges of building a thriving company. They also overcame a major handicap for many startups: related founders. Research has shown that businesses co-founded by family members fail at a higher rate than all other types of business partnerships.

Overcoming the 'F' Word: Family

Sibling co-founders must deal with the strains of a startup as well as disagreements about ownership or growth and any lingering bitterness over deep-seated childhood rivalries. These pressures can make for disastrous partnerships.

Even when a business is a blockbuster success – think Kellogg's and Warner Bros. – it can destroy family relationships, as it did in both of those cases.

"Siblings are your longest relationship in life," says Stephanie Brun de Pontet, a family business adviser at the Family Business Consulting Group in Chicago. "The knowledge they have of each other allows them to poke each other in the most irritating ways." Not an ideal method of working with a business partner.

Why have the Cheungs succeeded when so many sibling co-founders fail?

The Secret to Sibling Success

Adora says it's because they are both introverts who grew up in a goal-oriented, studious family. They rarely get frazzled under stress, and each can be blunt without the other's taking offense. "You inherently trust your sibling more than anyone else in the world," Adora says. "You know you have each other's back."

The sibling startups that succeed, say experts, tend to have partners like the Cheungs – people who share a deep understanding and built-in trust, and are aligned on core values and priorities. If you and your sibling don't already have these things going for you, it might be best to keep your association purely personal.

Take a Test Drive

So before you decide to move forward with a sibling partnership, make sure your relationship is on solid footing. If you're not certain, take a test drive.

Adora Cheung knew brother Aaron was a safe bet because he had slept on her couch for several months while looking for an apartment. They found they got along despite the close quarters. "If you have lots of arguments that cannot be resolved quickly, that's a nonstarter," says Adora.

Begin with well-defined roles and clear expectations about goals and ownership. Who will make the final call on tough decisions? How will your roles change as the company grows?

Siblings Catherine, Geoff, and David Cook discussed a "declaration of roles" when they launched MyYearbook in 2005. This helped separate sibling issues from business issues, Catherine says. "It was important not just for handling fights but for figuring out priorities," she says.

Remember that startups have a high failure rate. But whatever happens, you're family.

"Keeping that perspective really helps," says Aaron Cheung.

Check out more from Inc.com:

5 Tips for Finding the Perfect Co-founder Family Businesses Are a Safe Bet for Long-Term Survival 11 Questions to Ask a Potential Business Partner Photo credit: Monkey Business Images via Shutterstock.


About the guest blogger: Jennifer Alsever hasbeen a journalist for the past 19 years, and still loves her job – the learning, the storytelling, the writing – all of it. Since 2004, she has worked as a freelancer, writing about consumer trends, health, personal technology, social trends, startups, tech, green business, innovation and strategy for a number of national publications.