When business partners first take the leap together, it can be just like the start of a new marriage. At first, it's all honeymoon, then they get to know each other well, get to see each other under stress and get to find out what irritating habits the other has. Business partnerships can be incredibly successful - or spectacularly dysfunctional. Here are five high-profile businesspeople whose partnerships could not withstand the test of time. (These 10 entrepreneurs' names will live on long into the future - perhaps even after their enterprises are gone. Refer to The 10 Greatest Entrepreneurs.)
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The history of Zuckerberg and the development of Facebook have been well-documented - most recently in the movie, "The Social Network." Zuckerberg has had many partners over the years, but the partnership that went south quite publicly was not even a legal partnership at all. In 2004, fellow Harvard grads, Cameron and Tyler Winklevoss, filed a lawsuit against Zuckerberg and Facebook, claiming that he had agreed to work on a project similar to Facebook for them. They claimed that part of Facebook belonged to them. The suit was settled the next year when Zuckerberg gave them $20 million in cash and 1.2 million shares of Facebook. They continue to file new suits.
Microsoft has made its founder, Bill Gates, one of the wealthiest people on the planet. Microsoft started, however, with nothing more that his programming skills. The fledgling company grew exponentially when IBM asked Gates to partner with them to develop an operating system for its new line of personal computers. Gates agreed and delivered what eventually would become PC-DOS but refused to turn over the rights to IBM, instead opting to license the technology. Gates gambled that other PC manufacturers would pop up and copy IBM's technology. The gamble paid off and Microsoft operating systems are used on the vast majority of PCs in the world. Gates continued to work with IBM on their OS/2 platform, but the partnership fizzled and Microsoft went on to develop its own cross-platform system.
Some partnerships don't end with lawyers and courtrooms, but simply fade away. Steve Jobs and Steve Wozniak founded Apple in 1976 in Jobs's garage. The creation of the Apple I started the company on the road to changing the entire industry. However, in 1981, Wozniak crashed his small airplane and suffered ongoing amnesia, which required him to withdraw from his duties at Apple. After therapy, Wozniak went back to university and attained his undergrad degree. When he eventually returned to Apple, it was in a limited role as an engineer. In 1987, Wozniak stopped working for Apple full-time but according to his website, he is still on the payroll. Steve Jobs became the face and creative source for the company. (Many people want to start a business, but not everyone has what it takes to succeed. Check out Are You An Entrepreneur?)
There are many ways to try to wrest control of a business away from partners other than in a courtroom. Coco Chanel licensed her name to perfumiers Paul and Pierre Wertheimer to create Chanel No. 5. Chanel received 10% of the company's stock. She spent later years fighting with the Wertheimers to get control of the company back. After numerous efforts, Chanel tried a new tactic. During WWII, Jews were not permitted to own assets in German-controlled France. Chanel unsuccessfully appealed to German officials to turn control of the company over to her. In later years, Chanel and the Wertheimers drafted a new agreement that lasted until her death in 1971.
The Bottom Line
Business partnerships suffer stresses over the course of time that can cause them to crumble or explode. Often, money is the underlying cause of partnership breakups, as it is with divorces. A solid partnership agreement upfront helps business partners to navigate through the rough spots. (The successes of these three CEOs can be linked back to one common factor: customer service. See The CEO Dream Team - Walton, Schwab, Marcus And Blank.)