The Social Network Is A Great Example
We witnessed how detrimental it was for Mark Zuckerberg going into business with best friend Eduardo Saverin in the hit film The Social Network, and now new research proves that it’s a bad idea.
Researchers from Harvard University looked into friendship among venture capitalists and found those that worked together based on friendship rather than ability were less likely to succeed in business.
The three researchers that compiled the ‘The Cost of Friendship’ report, looked into 3,500 venture capitalists from 1975 to 2003
The report says, “Collaborations based on characteristics unrelated to ability might suffer from a 'cost of friendship' and induce a negative relationship between affinity based similarities and performance.”
The study showed that if business partners of the same minority group worked together, their chances of a successful return dropped by 25 per cent.
It also showed that partners who went to the same college saw their chance of success drop by 22 per cent, and by 18 per cent if they started a business together before.
The researchers said that there are many reasons going into business with a friend can fail and cause the relationship to suffer.
Some of the reasons being that working will similarly minded people who share the same strengths and weaknesses may lead to poor decision making.
It is unlikely that this news will stop anyone from going into business with a friend as it is the most popular way to start a prospective business, but it is certainly food for thought.
Cara Mason
tagged in Friends Relationship