Here are 6 unexpected realities of building a 7-figure business with a spouse-turned-cofounder.
You may think you know an outspoken founder or a high-profile startup, but behind closed doors, reality may look shockingly different. Having a broad network of entrepreneurial friends, I’m fortunate to see intermittent glimpses into the challenges even the most successful entrepreneurs and startups face. That inside access keeps me grounded, but it also makes me well-aware that aspiring founders lacking such a transparent network may be led astray by the airbrushed perception these successful high-growth startups portray online.
Here’s one example in which my friend, co-founder of a high-growth startup that’s raised funding, been featured across major viral publications, and made over a million bucks in the past few years, turned her back on her profitable, growing business. This friend has been front-and-center in her industry, acting as a startup advisor, a subject matter expert on national panels, and a public-facing leader across social media, so she hasn’t been quiet about her success.
Nonetheless, she has quietly backed away — and here’s why.
No, I’m not talking about food; I’m talking about your industry, product, or business model of choice. Sometimes, after years of going all-in with one business or industry, your curiosity (or concern about the longer-term industry outlook) may spark your wandering eye, and that may not be a bad thing.
This founder is in a great, growing, somewhat recession-resistant industry, but that doesn’t make her or her business immune from disruption. While she doesn’t want to throw away her years of blood, sweat, tears, and industry expertise, she does want to expand her skill set into different facets of that industry to ensure she doesn’t wind up a one-trick-pony on a broken merry-go-round. Personally, I’ve done the exact same thing, diversifying my time, strategy, and both business and personal investments significantly over the past two years.
I didn’t diversify because what I had and did wasn’t working; it was working incredibly well. Regardless, I diversified preemptively, in case it ever wasn’t working so well. This founder did just the same, and considering her spouse is her co-founder, their joint investment in this one industry felt a bit too lopsided for her liking. Don’t think of starting a new business, side hustle, job, or pursuit as a backup plan or something to consider only during your startup’s downturns; if you have the bandwidth, preemptive diversification may be the smartest play.
If you’ve ever solo-founded a company, you can probably agree that there are some inherent benefits to starting a business with a partner, especially one with whom you live 24–7. My friend blatantly admits that without the encouragement and overflowing optimism of her spouse, she never would have started a company on her own. However, after years of growing their business into a million-dollar well-oiled machine, their feelings towards the company and working together started to shift.
This friend didn’t flock to entrepreneurship to escape the 9-to-5; in fact, she’d loved her prior corporate career until layoffs shook her confidence. Her spouse, however, is a born-and-bred entrepreneur, having hustled his way into multiple successful ventures since he was a teen. He hates offices, bosses, and convention; she actually enjoys them.
As their business grew, my friend realized that she craved the social interaction and structure that outside-the-house employment provided. It didn’t matter how much money their business made or how passive or automated it was becoming; she found it was leaving her antsy, unfulfilled, and resentful that her spouse loved his lifestyle, while she hated her own.
When it comes to both spouses and cofounders, I believe (and have experienced) that opposites not only attract, but can result in the most fruitful unions. I have a business partner whose risk tolerance is vastly different from mine, but that’s helped us unite and dissect our biggest business decisions and expenses. Likewise, I have a romantic partner who’s my polar opposite, and we invest our money in completely opposite asset classes, which creates a well-diversified basket.
That said, I wouldn’t want those opposite risk tolerances from my business partnership bleeding into my personal life and shaking the financial foundation of my marriage and family. Unfortunately, that’s exactly what happened to my friend.
Her spouse is the risk-taker, comfortable with swinging big because he’s confident even if he misses, he’ll recover. My friend, on the other hand, holds conservative financial stability in high regard, causing a stalemate when they assess new growth and investment opportunities for their business versus their personal finances. That stalemate was solved when she left the company for a 9-to-5: Her spouse takes on those risky growth opportunities, she brings in the stable paycheck, and they each arrive at the risk tolerance and financial security they require.
If you run a service-based business, growth and success may result in multiplying your circle of employees, partners, peers, and client interactions. If, instead, you run a physical product e-Commerce company (as my friend does), you may find that growth can feel…lonely.
It’s a success problem, but it’s a problem nonetheless: Extroverted people who gain fulfillment from human interaction may find that selling a physical product online isn’t the be-all, end-all to check all their career boxes, even as the company profits and scales.
Since my friend’s company operated like a well-oiled machine, her tasks were limited to social media marketing team management, interfacing with her suppliers for new product development, the odd customer service issue (which she eventually outsourced), and pounding the pavement for more press. Despite her company’s growth, the bubble in which she operated was small, and selling a widget without any personalization or customer interaction wasn’t scratching her human-facing itch.
However, it wasn’t just about the lack of human interaction: In addition to the fact that she wasn’t meeting new people, she also felt that she was no longer facing new challenges or having new experiences. She of course could have decided to challenge herself by pursuing new types of synergistic products or services for her company’s existing audience; that said, after years of immersion in one industry around one type of product, she didn’t really want to.
Another success problem you might encounter is the “what do I do with my money?” scenario. Founder problems, right? I joke, but in reality, it’s a daunting question when you make a large sum of money and aim to preserve and grow that capital in the most strategic, aggressive, yet also somewhat conservative way. It sounds like a contradiction, right? How can you possibly grow your money aggressively and conservatively all at once?
This founder opted to do just that with a few real estate investments. They were conservative because they were in historically high-appreciation markets and conceivably can’t easily go to zero (unlike a business). However, they were aggressive because they relied on vacation rentals for cash flow to cover the mortgages and profit, which didn’t bring home the bacon quite as fast or as much as she’d hoped or expected.
In short, this founder and her spouse tried to multiply their millions with cash-flowing vacation rental real estate investments, but they found they may have bitten off more than they could chew. The uncertainty around higher-than-expected vacancies, recession-related slowdowns, and an impending off season is what led my friend to seek out a new stream of cash flow with which to supplement their company and offset those new expenses.
In my mid-twenties, I used to put my entrepreneurial pursuits — including my first failed startup — on a pedestal, prioritized above everything else in my life. Over the years, as my furry family grew, I moved to a new city, bought a house, and began building the life of my dreams, rather than just the business of my dreams, those priorities changed — drastically. My business is still up there, but now I have multiple businesses vying for that spot, and at the end of the day, my dog Esmeralda is still my number 1. My friend experienced a similar priority shift.
Initially, when she and her spouse founded the company and hustled to go from zero to 6-figures, then 7, their company was her whole life. Over the past few years, as they’ve bought a new house, invested in real estate, and decided to expand their family (with more humans), her focus has changed. As she’s looking towards motherhood, she’s begun to value things like paid time off, employer-provided health insurance, and the added stability of a second and diversified income unrelated to their company. It looks like her first born (her startup) is taking a backseat to her second born (her human child-to-be) — at least for now.
When I was living in a 457 square foot asbestos-riddled apartment caked with 17 layers of lead-based paint, I remember thinking: If I could just make $40k a year from my business and never have a boss, I could be happy. Keep in mind, that was after years of making more than triple that in an esteemed finance job. I used to think the entrepreneurial panacea was the freedom of working for yourself.
As times changed, I lost money (a lot), made money (at first, not a lot, then a lot more than I’d ever expected). $40k and no boss was no longer my panacea. It became the number of pets I would have, the neighborhood I would live in, the number of different ventures I would simultaneously pursue, and eventually the real estate endeavors I would enjoy.
For my friend, four years ago, a million-dollar business would have been her panacea. Today, it looks completely different. She didn’t take a job because her company failed or she feared a recession-induced decline; she took a job because her first born (her startup) was no longer giving her everything she wanted or needed in her life and career. Moral of the story? It’s okay to reassess, reevaluate, and reorient your time and focus. In fact, I think it’s one of the most strategic things you can do. Your industry, the world, and the economy are evolving all the time; there’s no reason you can’t, too.