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Lessons from William Hewlett & David Packard – and The Lone Ranger & Tonto – for success as a business duo

August 12, 2013

I settled down to revisit a childhood memory in the cinema on Saturday evening with the latest Johnny Depp film – The Lone Ranger. Complete with his white stallion Silver, his trusty guide Tonto – otherwise known as Kemosahbee – and Rossini’s William Tell Overture, it blasted out in the auditorium.

John Reid, a rather sensible fellow, arrives in Texas to visit his brother Dan, a fearless lawman, who is tracking down a loathsome bandit, Butch.  Everywhere in America it seems bad guys are getting away with bad stuff, and the authorities are doing nothing. Who can come to the rescue? Following a successful bloody shootout the two get together, and Tonto suggests crusading survivor John wears a mask to become invincible. Who was that masked man? Hi Ho Silver, away!

The Lone Ranger, the masked avenger and Tonto, a spirit warrior on a personal quest, are a sparky double-act. The duo first appeared in 1933 on a radio show. It has been suggested that the Lone Ranger character was inspired by Texas Ranger Captain John Hughes to whom the book The Lone Star Ranger by Zane Grey was dedicated in 1915. Hughes hunted down the gang who had killed Texas Ranger Captain Frank Jones in an ambush.

The radio show proved to be a hit and spawned a series of books, a popular television show that ran from 1949 to 1957, comic books and films. Despite bad reviews and financial flaws, the Depp film was very watchable, with dazzlingly beautiful landscapes the backdrop to a nation of thieves and scumbags who crept across them, and our heroic duo. Depp brings a deadpan drollery to the part of Tonto, with a wacky dead stuffed crow perched atop his headdress, which he occasionally tries to feed crumbs. The Lone Ranger ends up looking like something by Sergio Leone, and alternatively reminding me of Sheriff Woody from Toy Story.

Have you ever wondered why some partnerships like the Lone Ranger and Tonto are successful, and some last a lifetime while others crash and burn? The tech space is filled with successful entrepreneurial partnerships – Page and Brin at Google, Yang and Filo co-founded Yahoo! and before them Jobs and Wozniak at Apple, Gates and Allen at Microsoft. More recently the corporate divorces between Crowley and Seladurai at Foursquare and the departure of Paul Sciarra at Pinterest show duos don’t always work. Yet perhaps the defining tech partnership preceded them all by 50 years.

William Hewlett and Dave Packard graduated from Stanford in 1934 as electrical engineers, and forged a friendship during a two-week camping and fishing trip to Colorado. Spending two weeks in the woods with the same person would test the relationship of any pair, however Hewlett and Packard became close friends. Shortly after, with the encouragement of Stanford professor Fred Terman, they started HP – the name of their start-up determined by the flipping of a coin.

Starting with just $538 in capital, they devised gadgets in a garage outside Packard’s house in Palo Alto, California.  An exception to the general rule of opposites, Hewlett and Packard had strong collaboration skills – Packard’s business sense complemented Hewlett’s flair for technical innovation. In 1938, Hewlett built HP’s first product, the HP200A, an audio oscillator. It was decidedly stolid, but it had the advantage of being cheaper than anything offered by competitors, and it enabled Walt Disney – their first customer who purchased eight of the devices – to enrich its soundtrack for the movie Fantasia.

Hewlett-Packard continued to create innovative tech products throughout the 1940s. By 1942, they had eight employees and $522k in revenue. In 1961, the company was earning $87.9m and listed on the NYSE. They were the innovators behind the first mass market laser jet printers. Both had an eye for new markets. Hewlett scouted Europe, and HP went global with a German plant in 1958. Packard forged business ties in China in the 1970s. Packard also infused fresh business tactics, calling one approach management by walking around, and they also pioneered flexitime for workers.

They created an innovative social, supportive work environment – The HP Way – an open corporate culture, work ethic and management style that became synonymous with trust, respect and integrity. The company they built (and its former employees, including Steve Jobs) shaped Silicon Valley for decades. Hewlett retired in 1987, Packard in 1993; Packard died in 1996, Hewlett in 2000. In 2012, Hewlett-Packard employed 300,000 people and reported $126Bn in revenues.

Hewlett and Packard clicked because they had similar personality types with an insatiable curiosity, strengths that complimented each other. They were driven by joint-achievement, not personal success. Interestingly, research shows start-ups with co-founders are four times likely to be successful than those going it alone – quite a strong case for forming a double act.

Going it alone enables you to set the culture, it’s easier to make decisions quickly and go for it, and generally you can’t fall out with yourself. You also learn more – by necessity – being on your own. Alternatively with a co-founder you have the benefits of ‘two heads are better than one’, improving decision making and being more likely to reach the right outcome faster.

With a co-founder, you’re also not spreading yourself too thinly, taking responsibility for everything on your shoulders, and working with complimentary skills, more gets done. If you’re thinking of starting a company by yourself, don’t underestimate how lonely and dark it will be when times are tough – a partner helps balance out the hard times and to celebrate with when things went well.

It’s also worth noting that businesses with co-founders are more investor friendly. In the early stages of a business, investors back the people more than the idea, funders don’t like backing first time sole founders where the risk is obviously high. They know how tough the road is and think that multiple founders will pick each other up when one loses motivation, they’ll make better decisions and achieve more, all of which increases their chances at success.  If you pick a co-founder with complementary skills to your own, you share the same vision and you work well together, you’re much more likely to be able to raise capital.

So if you were to launch a tech start up, what can we learn from HP – and The Lone Ranger and Tonto – in terms of the qualities and characteristics of relationships that make for a successful business partnership?

Shared Vision & Values One of the most critical things to look for is vision and values alignment. If your vision and values are strongly affiliated, then it becomes easier to make decisions and move forward as the business develops. Hewlett and Packard shared three traits: technical brilliance, boredom with employment and wandering minds – a mutual passion and curiosity for innovation. Their ability to connect with each other was unique and solely in their strength as a double act.

Trust No matter how many clauses you write into a business agreement, it still largely hinges on trust. If you cannot trust your co-founder, everything else becomes very difficult. But what exactly does that mean? Trust implies that both parties participate in the relationship with both ‘gives’ and ‘gets’. The attitude of giving a full commitment to the partnership will usually result in getting the same commitment in return.

Complementary skills and mutual respect One of the key aspects of a successful partnership is complementary skills and assets. If you look at the tech success examples above, you’ll notice that each pair has complementary skill sets that allow the partners to recognise and respect each others’ unique strengths. Each partner needs to acknowledge that no matter who did what or how much, nothing could have been accomplished without the work and contribution of the other.

A successful partnership allows you to recognise your own weaknesses, and draw on a partner’s strengths, without being uncomfortable about that vulnerability. That comfort comes from a complete lack of envy in a partnership. Partners must value trust, they must discover how to keep their ego in check, and they must put a premium on not just brains, but human decency.

Establish ground rules Unless you are explicit about how you expect things to be done, both parties will end up making a lot of assumptions, which is dangerous and destructive, especially when things are not going as hoped. An open and honest conversation, early in the partnering process, about each party’s expectations can save a great deal of frustration, tension and confusion down the line. The ‘win-win’ outcome is not just consensus, but also what is in the best interests of the business.

Communicate Always keep the lines of communication open. This means asking questions and clarifying when you don’t understand, and always making sure that both partners are on the same page. This includes talking about money, mistakes and different management styles.

Give more than you take An important philosophical point in effectively co-creating a business is to always give more than you receive in your dealings and interactions with you co-founder. If both partners approach the business with this philosophy then things just seem to work.

Synergistic thinking Start-up entrepreneurs may set out with an endless supply of great ideas and enthusiasm but having someone else to bounce and feed these ideas off can be critical. Much in the same way as our favourite comedy duos feed off each other’s creativity, partners also instil a level of discipline and provide a theoretical check and balance in the decision making of the business. Equally, looking after each other, keeping an eye open looking over your co-founders back, is an asset too.

There’s no doubt that having asymmetry works. Partners find ways to get around the dilemmas and the disagreements, and then use the adage that one plus one is a lot more than two to build up their companies.

What it’s like to share the highs and lows, the successes and the failures, and the feeling of being with someone alongside you, all the while confident they think the same way? By merging their disparate talents and idiosyncrasies, co-creators are sufficiently in sync when it comes to the technological course they co-charted. That kind of strategic cohesion has often been the secret fuel behind hugely successful businesses.

In 1988, the one-car garage behind 367 Addison Avenue in Palo Alto, California, where William Hewlett and David Packard built their first oscilloscope, was officially designated as a California State Historical Landmark. A plaque placed on the lawn proclaims the garage as The Birthplace of the Silicon Valley. There’s also a plaque with a joint quote from Hewlett and Packard: Believe you can change the world. Perhaps you’ll take this as your inspiration as a co-founder in your own tech start-up, then it’s Hi Ho Silver, away!

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