For Julia Hartz, co-founder and president of Eventbrite, the event and ticketing web platform, starting a company with her husband, Kevin, was not exactly part of her master plan.
“Part of me has actually blocked out the decision-making process I went through before going into business with my then-fiancé,” she says, only half-joking. “We had been dating for two years long-distance; we got engaged, and I was debating whether or not to take this particular job in San Francisco. His alternative to my taking it was coming to work with him. Part of [the reason that he is] such a good entrepreneur is that he has an eternal optimism that sometimes transcends common sense…. I remember thinking: ‘Maybe it’s not a good idea to move in together, get engaged and start a company together all within three months.’”
Six years later, however, Eventbrite is a powerful force in the online ticket industry. The company, which has 200 employees, has raised more than $78 million of venture capital and has processed more than $1 billion in gross ticket sales. “We were very pragmatic,” Hartz notes. “Early on, we had conversations about what would happen if this didn’t work out. We said, ‘Let’s take it month by month.’ And it just kept working.”
Couple-run companies are a familiar feature in the business landscape. While most husband and wife-run ventures are small businesses — genuine “mom and pop” shops — some, like Eventbrite, are household names. Gary Erickson and Kit Crawford are the married co-CEOs of Clif Bar & Company, for instance, while Andy and Kate Spade started the eponymous handbag company together. Lynda and Stewart Resnick are owners of Fiji Water. Genevieve Thiers and Dan Ratner founded Sittercity, the babysitter finder service.
Like political power couples and celebrity duos, husband and wife business partners are an object of fascination. For some, the notion of working with a husband or wife and spending every minute together building a business is a desirable personal and professional scenario. The idea of folding each other’s laundry one moment and talking social media strategy the next may be the perfect way to achieve work-life balance. But for others, the prospect of a co-worker spouse is cringe-worthy. Regardless of which camp you fall in, it is natural to look at husband and wife business partners and wonder: How do they make it work?
For many entrepreneurs, being married to their business partner is an asset to both their professional success and personal relationship, according to Stewart Friedman, Wharton practice professor of management. “The trust you have in [your spouse as co-manager] is greater than you are likely to have with any other business partner in your life…. It can be exciting to share the joys of accomplishment together. And as a business professional, you’re apt to learn more and faster, and to see different perspectives, because you’re able to be so vulnerable with each other.”
Yet the headaches associated with starting and running a company are ever-present, and they can be exacerbated when the business partners are also life partners. Financial pressures are greater: Not only are the fortunes of the couple bound up in one business and one (sometimes non-existent) income, but it is often harder for married business partners to raise money from outside investors. Hiring new talent is also a challenge, as many job candidates are wary of entering family businesses. Then there is the emotional strain; some couples find it hard to separate what happens in the business from what happens in the relationship.
“The big issue has to do with boundaries — how consciously and deliberately the couple manages those, and how mindful they are at tending to the different roles they’re in,” notes Friedman. “On a daily basis, it is helpful for there to be time for the couple to be together without work. Otherwise, the exigencies of business crush everything else. When you get into this game, you have to realize that there is never an end of things to do. And this doesn’t stop, especially if you’re successful.”
’Who’s Going to Fire Their Wife or Husband?’
According to the National Federation of Independent Businesses, 43% of small businesses are family businesses (defined as two or more family members managing a venture that at least one family member owns). Of those businesses, 53% of managers identify a spouse as the family member who is sharing day-to-day management.
Couple-run enterprises could become all the more common in the future. The stubbornly slow rate of new job creation is causing more people to go the entrepreneurship route; consequently, some of these people will, out of desire or necessity, likely form a partnership with a spouse or significant other. (According to the Ewing Marion Kauffman Foundation, which measures entrepreneurial activity in the U.S., 0.32% of American adults created a business in 2011. The figure represents a 5.9% decline from 2010, but is still among the highest levels of entrepreneurship over the past 16 years. Statistics from 2012 have not yet been released.)
“We assume that [husband and wife-run companies] are a wonderful thing because there are a number of high-profile couples who are still around to talk about their businesses and their marriages and how they make it work,” says Wharton management professor Laura Huang. “But in general, it may not be a good idea to go into business with your spouse.”
Many couples don’t have the “hard conversations” before taking the plunge, she notes. “They haven’t necessarily talked about what happens when they need to make changes to the business model, or what the right exit strategy is. They make an assumption because they think they already know and understand the other person, and they assume they already know his or her perspective. These issues end up destroying many startups, regardless of whether the business partners are married.”
Things can get ugly. Case in point: Tory and Chris Burch, who founded the preppy-chic fashion empire Tory Burch in 2003, divorced in 2007. The pair is currently embroiled in nasty, he-said/she-said legal proceedings. The dispute centers on whether Chris Burch, in creating his own store chain named C. Wonder, copied the Tory Burch business by using some of her signature looks and certain design features of her retail shops.
Indeed, couples who go into business together must do so with care. Money, at least in the beginning, is often very tight. Steve Broad recalls the early days of starting Annie Chun’s, the all-natural Asian food brand, with wife Annie. Broad graduated from business school in the early 1990s and had hoped to start a career in finance or biotech, but his employment prospects in those recessionary years were dim. When he wasn’t looking for a job, he helped his wife sell her Asian sauces at local farmers’ markets in Northern California
“In the beginning, it was block and tackle,” he notes. “We were going to farmers’ markets two to three times a week and we were hand coloring our own labels. For the first 10 years, we didn’t make any money. We borrowed, put it back into the business and took it out again.”
This particular story has a happy ending: In the company’s 11th year of business, it rang up $775,000 in sales; once it introduced packaged soups, sales soared to $2.5 million. In 2008, Broad and his wife successfully sold Annie Chun’s to CJ, Korea’s largest food company, and today the brand is available at Trader Joe’s, Whole Foods, Target and Walmart.
But starting a business with a spouse leaves both partners financially exposed, according to Jeff Reid, director of entrepreneurial studies at Georgetown University’s McDonough School of Business. “Generally speaking, if one person in a marriage is in the startup phase of a business, the couple relies on the other spouse’s income, health insurance and job security to fall back on,” Reid says. “But if the business is failing and both spouses are ‘all in,’ it creates an interesting dynamic. When the business isn’t doing well, there is tremendous stress on the marriage.”
Raising investment capital is often difficult for married business partners. Many venture capitalists and angel investors “have a hard rule to never invest in a husband and wife team,” notes Reid. “They will tell you that they have been burned before. Every startup has challenges, and every marriage faces challenges. As an investor, you are looking to minimize risk. Investing in a husband-wife business looks risky.”
In addition, hiring can be an obstacle for husband and wife teams. Many job candidates — particularly seasoned senior managers — are reluctant to work for a married couple. “That senior manager realizes he or she won’t be part of every discussion about the future of the business,” says Reid. “It would be hard to be that third senior leader when there are tough decisions that have to be made. After all, who is going to fire their wife or husband?”
Couple-run business partnerships frequently have an uneven power dynamic, which can cause tension both in the office and at home, notes Meg Cadoux Hirshberg, author of For Better or For Work: A Survival Guide for Entrepreneurs and their Families. In addition to her book, Hirshberg has personal experience with this subject: Her husband is Gary Hirshberg, chairman and former CEO of Stonyfield Farm, the organic yogurt company that was bought by Groupe Danone in 2001. Meg Hirshberg worked for Stonyfield for several years.
“Husband and wife business partnerships usually arise this way: One person is the primary motivator for the business, and the spouse joins in. The spouse is available, capable and cheap. They get into it [thinking,] ‘It’s a family business. Of course I’m going to help out,’” she notes. “But as the business grows, suddenly they find themselves in a role that in any other organization would have required an interview, the setting of goals and expectations, salary discussions and so forth. Consequently, the spouse is often not suited, by their interests and training, for the work that they are doing.”
Issues of hierarchy may also creep into the relationship. “Theoretically, you’re in a marriage of equals,” Hirshberg adds. “But in the workplace, generally one person is in charge. Even if you don’t report to your spouse, you are still under them. This lopsided relationship can cause tension.”
Integrating Work and Home
Perhaps the hardest thing about starting and running a business with a spouse is that there is very little time or room in the marriage for much else besides work. For some entrepreneurs who thrive under constant pressure, this is not a problem. Others miss the ability to create some semblance of romance at home. “After you have been working together all day, it’s a tough transition to rekindle intimacy,” Hirshberg points out. “This reconnection is made harder by the fact that, in the workplace, we talk to each other in more abrupt, hurried ways. At home, the couple must use more subtle and nuanced communication, and make the shift from tough to tender.”
Wharton’s Huang calls this the “painful proximity” phenomenon, which roughly translates to an annoying sense of closeness. “Issues arise in business; they always do,” she says. “When you’re married to your business partner, you don’t have the opportunity to separate and decompress.”
Matt and Kate Jennings co-own Farmstead, an upscale restaurant and gourmet specialty shop in Providence, R.I. He is the primary chef, and she is the pastry chef. Because Matt works nights and Kate spends evenings at home with their son, they don’t have a lot of time for just the two of them. “Do we want to spend every moment of our weekend talking about work?” asks Kate Jennings. “It’s tricky. There is a point where you have to separate your work from your marriage. And then you throw a kid into the mix — a very young child — and it’s hard…. You do bring the work stresses home.”
Nancy Rothbard, a professor of management at Wharton, has researched the extent to which people integrate family into their work lives. She says that successful husband and wife business partnerships tend to be led by couples who “like fluidity,” are “very integrative” and happily blur the lines between work and home.
Rothbard grew up in a family business — her grandparents owned an office products and furniture store that her father and uncle eventually took over. “People who do this successfully as couples tend to have a very strong base and marriage to begin with,” she notes. “It can be wonderful because [the couples] are so close. They have a shared enthusiasm. They have a lot in common. And they have a lot to talk about. Even though they are spending all their time together, they are both really interested in what is going on with the business. It makes for an incredibly strong marriage. And it can also make for an incredibly strong family.”
Often these marriages tend to be ultra traditional, according to Kathy Marshack, a business psychologist who counsels many husband and wife management teams. She conducted research in the early 1990s involving 30 married business partners, and found that many of these “copreneur relationships” are less egalitarian than dual-career marriages. For instance, 83% of the copreneurial wives were entirely in charge of general housework, compared with 49% of wives with their own careers. Nearly 65% of copreneur wives handled all the household shopping, versus 36% for the other working wives. At work, copreneurial women typically performed “chorelike” tasks, such as payroll and billing.
“[Even though this research was conducted 20 years ago], I don’t think things have changed that much,” notes Marshack, who is the author of Entrepreneurial Couples: Making It Work at Work and at Home. “Couples who are in business together tend to have more rigidly defined roles. The husband is the founder, the CEO and the president. She is a support person.
“Many copreneurial wives will tell you that this is not the way it is,” Marshack adds. But she says that many of the portrayals of husband and wife partnerships in the popular press feature remarkably egalitarian couples. These people, she notes, often make incorrect sweeping statements about copreneurial ventures. “But then you dig down and find out what she’s getting paid, what her title is, and who people in the company come to for a final decision, and you find that” the partnerships are more complicated and less equal than they might seem.
Nick Zappia, who with wife Liz Vilardi co-owns The Blue Room, Central Bottle and Belly, an assortment of eateries and food and wine shops in Cambridge, Mass., has an interesting take on the matter. “[In the restaurant], we each do a little bit of everything. I would say that 90% is stuff we can hand back and forth. But there is a solid 10% that we hold as our own,” he says.
“The thing about marriage and the separation of duties and responsibilities is that it’s never 50-50 all the time, and it’s the same way with management,” he adds. “Sometimes it’s 70-30, and sometimes it’s 60-40. There are times when one of us is doing all the hard work, and the other one has an easier ride. You need to be flexible. You need to be OK with carrying the other person sometimes, and you have to be OK with letting the other person carry you.”
‘When It Works, It’s a Beautiful Thing’
When a couple’s personalities and skills are well suited and complementary, working together has the potential to add richness and romance to a marriage. Spouses come to respect and admire each other in new ways, notes Hirshberg, the author. “When it works, it is a beautiful thing. One CEO I interviewed told me she couldn’t imagine building her life’s dream with anyone else. Not only have they created a family, but they get to share a vision in another realm.”
Working together provides spouses with an opportunity to see their significant other do something they’re good at and passionate about. This can enhance and invigorate the relationship. “There are ways that [these entrepreneurial teams] get to see each other in action … that make them proud of each other, and this makes each one feel better about their spouse,” says Wharton’s Friedman. “This usually doesn’t happen — at least not in the same direct way — when spouses work in completely separate domains.”
Every marriage is different, just as every company is different. But, according to experts and copreneurial couples in the trenches, there are several best practices for successful husband and wife business partnerships.
First: Divide and conquer. While some fluidity of workflow is necessary in the start-up phase of any business, most successful partners divvy up tasks based on their skills and interests. Of course, partners may confer on big decisions or seek each other’s opinion when in doubt, but ultimately working together is more seamless when each partner has his or her own domain. Hartz of Eventbrite notes that she and her husband “never work on the same thing at the same time. You get things done a lot faster, and that’s also how you preserve the relationship.”
Second: Seek outside counsel. It can come from business advisors, professional organizations, job coaches, marriage counselors, friends and mentors. Perhaps there is even a community of married business partners in a similar field with whom a couple can share war stories and compare notes and ideas. “Running a business with your spouse is a closed system,” says Marshack, the business psychologist. “Your job [in a marriage] is to be supportive of your spouse. But [if in your professional life] you are only interacting with your spouse, you are only reinforcing each other’s worldview. I always advise people to join separate professional organizations. Get outside blood.”
An outside party can be helpful, adds Friedman. If you are only bouncing ideas off your spouse, it leads to a narrow perspective. “Any smart entrepreneurial venture is going to have rapid learning built into it,” he says. “Couples might benefit from coaching to sort through this, and a counselor or an advisor usually helps you figure out both your business and your family goals and roles. Feedback on your job performance is different from [saying] how much I love you.”
Third: Communicate honestly and openly — even when that communication might result in hurt feelings. Married couples have a special knowledge of each other’s strengths and weaknesses. Professionally, this could be helpful, but interpersonally, it’s trickier. “Because of the importance of the relationship, it is possible that you might hold back on criticism that could hurt the business,” says Matt Allen, a professor of entrepreneurship at Babson College. “If I talk too much, it may be an annoyance to my wife. But if it ends up hurting sales, that’s a problem.”
It’s a delicate balance, he adds. “You don’t want to put a priority on the relationship over the business, but putting a priority on the business over the relationship is just as disastrous.”
Fourth: Carve out space for yourselves apart from your business. If the working relationship is causing tension at home, the couple should look at ways to shift work responsibilities or change the reporting structure. ”At home, they should look at establishing boundaries that could limit the intrusiveness of work into family life,” says Hirshberg. “Banning cell phones and laptops from the bedroom and dinner table is a good place to start.”
Susan Stern is the president and founder of Stern + Associates, a New Jersey-based PR firm she founded in 1985. In 2002, her husband, Danny, joined the firm after a career in a related industry. “The key to working effectively with your spouse is respecting one another’s need for space and independence, and never letting business become the predominant topic in the relationship,” she notes. “While we love working together, we also love not talking about it regularly. There are so many decisions we each make in a day that we don’t even bother to discuss.”
Finally: Enjoy the ride. Natasha and Chris Ashton, a British couple, met in college and attended business school in the U.S. together. They had both set up small businesses in the U.K., but were looking for a business to start as a team. “As life-long pet lovers who had experienced first-hand the financial difficulties that come with unexpected vet bills, pet insurance fit the bill perfectly,” says Natasha.
After graduating in 2003, they rented a tiny apartment in Philadelphia and ran Petplan out of their bathroom. The tub was filled with files. “Our first ‘investors’ were our Visa and our MasterCard,” jokes Chris.
Today, Petplan has 78 employees and has been recognized by Inc. Magazine as one of the 500 fastest growing privately held companies in the U.S. “We really enjoy spending time with each other and solving problems together. We love to work; we don’t see it as work. That’s the joy of it. It’s incredibly fulfilling,” says Natasha.
“There are great highs, and there are very big dips,” she adds. “But there’s no one else I’d rather have at my side than the person I love and trust the most in the world. There is nothing like it. There is nothing better.”