Can Entrepreneurs Work with Their Friends?

In the many stepping stones it's taken me to get to my current position, I’m fortunate enough to have hired and worked with my friends. I’ve experienced both sides of the coin - from having to fire them, to creating long-term business partnerships.

Here is how I handle this dynamic across the two key stages of your trajectory.

Should You Start a Business With Your Friends?

This advice applies to the absolute beginning of your journey.

For context, I work with a lot of early-stage entrepreneurs in the e-commerce space. Time and time again, they come to me with an idea, followed immediately by the friends they spoke about it with and how they all want to jump in. When you’re in your late teens or early twenties, that sounds great on paper - "Oh, the camaraderie!"

But what happens when someone stops pulling their weight? What happens when someone loses their motivation? What happens when three people have completely different visions for the product?

If everyone is trying to steer the ship, it’s an eventual recipe for disaster.

If I had to go back in time and replay some of the early "business groups" I was involved in, I would make sure three things were established on day one:

1. Clear Leadership: Who actually owns the final call (ideally yourself).

2. Clear Expectations: Who is executing which specific tasks.

3. Clear Commercial Outcomes: Who gets what percentage upon success.

You’ll find eight times out of ten, just presenting that structure to a group of eager young entrepreneurs will end the project right then and there.

Unless you’ve already put in your reps, most people starting from scratch haven't built the critical team experience needed to navigate friction. It’s nothing to do with their character or skills - it’s simply a matter of whether everyone knows how to work effectively within a structured team. At the very start, the answer is usually no.

Could starting a business with friends work out? Sure, it could. But the reality is that it more likely won't. The upside of figuring it out on your own, scaling, and building personal leverage far outweighs entering a multi-person group venture at the start of your trajectory.

How Do You Hire or Work With Friends as an Entrepreneur?

Now let’s assume you are a few more stepping stones into your journey. You have revenue coming in, and you’re looking to scale.

Getting down to brass tacks: you should only consider hiring a friend if you need a specific skill set that you do not possess yourself. That should be the primary - if not only - reason to bring another body into the business. Having been on both sides of this, here is how my early mistakes led to one of the best working relationships I have today.

What Are the Risks and Mistakes of Hiring Friends?

The first time I hired a friend, I set zero boundaries. No performance metrics, no clear objectives, and no set time commitments. Looking back now, I’m not even sure what kind of misplaced "friendliness" drove me to manage it that way, but it turned into a stressful mess. They worked whenever they wanted, took long breaks, and made no clear progress. Yet I avoided the discomfort of pulling them up on it simply because we were friends.

That awkwardness alone is why the failure rate for working with friends is so high, and why so many friendships dissolve in the process. You don't actually know what someone is like as an employee until you work with them. Someone can be a great friend, but absolutely shocking to manage.

My attempt to be the "cool friend" caused more stagnant growth for my business than if I had just cut the nonsense and laid out clear requirements from day one. To make matters worse, I didn't even need to hire anyone at the time - it was just a helping gesture to a friend who had lost their job.

Eventually, I had to fire them as I watched money bleed out of my bank account with zero return in revenue.

How Do You Successfully Manage and Hire a Friend?

When I brought on a friend the second time, I applied what I learned from that first failed attempt. First, I only hired when I hit a clear technical ceiling - in this case, complex web app development that was outside my personal skill set.

Second, I set clear expectations upfront: explicit boundaries, defined leadership, and weekly deliverables. Was it awkward pulling them back in line the first time something slipped? Of course it was. But you have to prioritize the long-term health of the business. It’s much easier to nip bad habits in the bud in week one than it is six months down the line.

Ask yourself this: Is it more awkward to pull a friend back into line based on agreed-upon boundaries, or is it more awkward to fire them?

By following this framework, we successfully scaled that business all the way to an IP acquisition. When I was hired as the CTO by the company that bought our IP, I brought my friend over as my lead developer. We still operate the same way today - whether inside corporate environments or on side ventures we pursue outside of work.

It is completely possible to hire and work with friends. But if you can't establish clear boundaries, honest feedback, and decisive leadership, you are setting both the business and the friendship up to fail.

What Is the Framework for Working with Friends in Business?

If you are currently evaluating a partnership or looking to hire within your social circle, run your decision through this checklist.

If you are at the start of your journey:

• Do I actually need a co-founder for this, or am I just looking for companionship?

• Am I better off figuring out this phase on my own?

• Will building solo grant me better long-term leverage right now?

If you are scaling an existing business:

• Do I have a specific, undeniable skill gap that this person fills?

• Am I willing to set firm boundaries and enforce accountability from day one?

• Is it completely clear to both of us who holds final decision-making authority?

There are several nuance points throughout this topic that warrant their own deep dive, so I will unpack specific parts of early-stage team dynamics and operational leadership in future posts.