Last Updated Feb 28, 2011 7:45 AM EST
The model has worked exceptionally well for OrganizedWisdom.com's co-founders Steven Krein and Unity Stoakes, who are now on their third company together. Stoakes (Mr. Inside) builds a community of health experts on the company's online health information platform; Krein (Mr. Outside) seeks out investors who are similarly passionate about the future of online health. I recently spoke to Stoakes (Krein was on vacation, which you can do when you have a great partner!) and asked him to break down the benefits of an inside/outside partnership. Here are 10 reasons why that structure makes their company tick and why you should consider it, too:
1. Faster innovation: "We're undergoing a pretty large innovation cycle now, launching the next version of our product," says Stoakes. "I spend all my time with the product development team while Steve goes out to pitch our ideas to our clients and to keep investors apprised. He gets their feedback, brings back ideas and we integrate them into the product development cycle."
2. More efficient communication: Krein concentrates on external audiences and Stoakes oversees team members and important internal audiences, such as customers. As long as the two of them are collaborating, they can get the same message out to more key audiences, more quickly. "Sometimes you move so fast as a startup you forget to update customers or your team," says Stoakes. "We've broken it down so that each of us is responsible for communicating with different core groups."
3. Improved team management: Stoakes and Krein find that team members, investors, and even clients will share great feedback with one of them versus the other. "We're definitely different, personality wise," says Stoakes. Steve is what we call a quick start, and I focus on being practical and being sure we filter through the quick start ideas so that we can more easily execute."
4. Better negotiation: One of the partners lays the foundation and maps out a negotiation, and then leverages the other to enter and improve the deal. "Say we're going to negotiate a deal with a vendor," says Stoakes. "I will try to understand what the ranges are and I'll say 'I need to check with my partner.' Then Steve will go in and try to negotiate better terms. For the most part, Steve is the closer."
5. 1+1=3: Not only can two leaders accomplish more when each partner tackles specific components of building the business, but also there's a multiplier effect as they provide checks and balances to one another "During our last fundraising round, Steve was out full-time raising the round," says Stoakes. "But when it came time to actually close the terms and making the decision on what investors to go with, we were able to make better decisions because we had each other to go through the pros and cons," says Stoakes.
6. Idea generation: The partners bounce ideas off each other, and if one cannot convince the other that an idea is worth considering, they typically move on. "This happens a lot with new feature ideas for the website," says Stoakes. "One of us will get enamored with something, but if it doesn't make it through one of us, it won't make it through to the rest of the team. For example Steve recently wanted to change the logo. I asked why, since not one person had ever complained about the logo. We agreed to revisit the idea in six months."
7. Staying on track while thinking big: While it's easy for businesses to get mired in the minutiae of day to day operations, an inside/outside partnership forces management to stay concentrated on the larger mission. "You can innovate and build, but also be exploring at the same time," says Stoakes. "You need most of your resources to be focused on the mission at hand. But if you have an outside guy who can also be exploring and probing, you can think about where you're going to innovate in the future."
8. 360-degree product development: Both Stoakes and Krein represent different (and sometimes conflicting) audiences throughout the product development lifecycle. Whereas the Mr. Inside represents the current customers and core users, Mr. Outside represents the investors and prospective partners. Together, they reconcile those various needs while making sure that important audiences are never overlooked. "Even with current product iteration, I'm constantly thinking about the doctors and health experts using our service," says Stoakes. " Steve is thinking about customers and how they're going to react to what we're doing. They both have completely different needs, so you have to constantly reconcile those various audiences."
9. More fun: Being an entrepreneur can be challenging, exhausting, and sometimes frustrating. "Having a partner is the best way to stay sane and smart and leverage opportunities," says Stoakes. "We actually can take vacations. Steve is off with his wife on vacation right now. As a lone ranger, you would ever be able to do that. I can mind the fort and he can get down time with his family. Plus it's great to have a partner to enjoy the highs with and deal with the lows with."
10. Role reversal: Both partners understand how to step in and perform the other role. Mr. Outside is 80% outside/20% inside and Mr. Inside is 80% inside/20% outside; but that 20% is important. "If Steve is supposed to speak at a conference, and there's a big sales meeting, then I can step in for him," says Stoakes. "And if he was in the country this week, he would probably be doing this interview." In this case, the role reversal worked out just fine.
Do you have an Inside/Outside partnership in your business? Tell us about it.