Informedi’s Weekly Business Insights

Three month ago a tariff announcement by Donald Trump caused a market meltdown. More recently his words have mostly elicited a shrug. On July 7th America’s president published letters he had sent to 14 countries threatening “reciprocal” tariffs to be introduced by August 1st, including levies of 25% on Japan and South Korea. The next day he said he would impose a 50% charge on copper and, after a possible year and a half’s notice, up to 200% on pharmaceuticals. The day after that, he escalated a political row with Brazil by threatening it with tariffs of 50%. Yet although the copper price soared and Brazilian markets shivered, global equity and bond markets seem unaffected. Panic has given way to placidity.

Everyone has a pet theory for this. One is that Mr Trump is not serious: most of the “Liberation Day” tariffs that caused the crash in April were postponed; the threat to impose similar tariffs in August seems empty. What the president really wants is deals. Another is that lots of tariffs have been levied, but their impact has not been as bad as feared. A third is that Mr Trump will back off if the markets or the economy take fright, so pessimism does not pay.

These arguments are inconsistent. They are also flawed. Take the policies that have gone into effect. Although Mr Trump tempered his Liberation Day barrage, tariffs have been relentlessly creeping up. The average rate has reached around 10%, compared with just 2.5% last year. The threatened August 1st and sectoral tariffs would raise that to 16-17%, ie, most of the way to the roughly 20% that loomed over the economy in the spring. Even the deals that have been struck, with Britain and Vietnam, have left in place much higher trade barriers than existed at the start of the year. Besides, the federal government increasingly needs the money raised by high tariffs to help pay for Mr Trump’s One Big Beautiful Bill.

Contrary to received wisdom, these tariffs are hurting the economy. Consumption and retail sales have been weak. America is on course to grow only about half as fast this year as it did in 2024. Inflation remains relatively low—but import prices show that American companies, not foreigners, are sparing consumers from the full burden of tariffs. Many are probably trying to avoid raising prices in the hope of a reprieve. They can do so because they stockpiled imports at the start of the year. Eventually, though, higher costs will tell and prices will rise. Inflation is likely to end the year above 3%.

Relying on Mr Trump to chicken out is paradoxical. If markets do not react to announcements of damaging policies, then nothing is forcing him to back off. It is also complacent. When Mr Trump avoids cliff-edges as big as Liberation Day, by raising tariffs gradually, the feedback from markets and the real economy is subtler. Yet America will surely grow more slowly than it would have—like Britain since Brexit.

In the past 15 years, hundreds of factories with thousands of new jobs have popped up along the Interstate 35 corridor in central Texas. Among them is a $17 billion plant under construction by Samsung Austin Semiconductor in Williamson County, north of the state capital. It won’t open until next year, but it’s already set off a mini building boom among potential suppliers and other South Korean companies that want to be nearby. Beyond proximity to the new plant, industrial companies are drawn to the region for its cheap land, light regulatory touch, lack of corporate income tax and—increasingly—a local population with the know-how to perform complicated manufacturing processes.

Many of the workers who join that plant (and others in the state) will likely have gone through the labs and classrooms at Texas State Technical College, a vocational school with its flagship campus in Waco, about halfway between Austin and Dallas. There, and at TSTC’s 10 other locations, students train for careers running the array of systems that power modern factories and other industrial facilities, often learning on the same equipment they’ll find on the job. They can earn a certificate in as few as two semesters and an associate degree in four; others already in the industry sign up for shorter programs to refine their skills midcareer.

The school consults with manufacturers, trade groups and economic development authorities across Texas to shape its curricula and make sure it’s teaching the skills employers want in their labor pool. For instance, after Covid-19 hastened the push toward automation, says Roger Snow, TSTC’s dean of manufacturing, the school has tried to better prepare students for that type of work. Manufacturers, he says, are increasingly looking to combine production lines to boost efficiency, monitor them to identify slowdowns and layer on artificial intelligence to predict maintenance needs. “We do teach some level of that, how sensors work and things like that, but we’re increasing,” Snow says. “We’re adding a new class this year that deals with the holistic element of how all of this communication works.”

TSTC is drawing more students studying how to install, program and operate robots and other sophisticated electronic equipment. But the centerpiece of the school’s manufacturing education is its industrial systems program, which it is revamping and rebranding as “industrial maintenance” starting this fall. “Manufacturing, whether you’re making a silicon wafer, cement or cosmetics for Mary Kay—the equipment they’re using to do that has always had a lot of commonalities,” says Donald Goforth, who teaches basic hydraulics, pneumatics and other systems in the program. “Anything that rotates or moves has a shaft and has bearings,” he says, and “no matter how much AI you put on the piece of equipment, somebody still has to go out there and actually turn the screwdriver or turn the wrench to make the repairs.” When these students graduate, Goforth says, they’ll be able to find jobs in “any industry that builds anything.”

Vocational schools have long held an important role in the US educational system, teaching the practical skills (automotive repair, health care) that keep the everyday economy running. As the cost of college climbs and more students question the value of a bachelor’s degree, trade schools are becoming increasingly popular. Public two-year schools with a major focus on career and technical education programs have seen a 19% bump in enrollment since 2020, data from the National Student Clearinghouse Research Center show. President Donald Trump expressed support for vocational education in May, when he threatened to divert Harvard University’s billions in federal grant dollars to US trade schools. In a December survey by Data for Progress, a left-leaning think tank, 78% of likely US voters said they had a favorable opinion of trade or technical colleges, compared with only 48% who said the same about Ivy League institutions.

Enrolling more students in technical programs like TSTC’s will be crucial if the US wants to bring back manufacturing jobs and keep pace with its international rivals. In China, for instance, President Xi Jinping has urged more young people to forgo a college degree and instead attend a vocational school, in a bid to boost its pipeline of skilled laborers.

There are more than 400,000 open manufacturing industry jobs in the US, according to the Bureau of Labor Statistics—more than the number of unfilled construction and information roles combined. If the Trump administration succeeds in its push to reshore manufacturing, in part by raising tariffs on overseas suppliers, the number of manufacturing positions would only grow.

Every day, billions of people trust digital systems to run everything from communication to commerce to critical infrastructure. But the global early warning system that alerts security teams to dangerous software flaws is showing critical gaps in coverage—and most users have no idea their digital lives are likely becoming more vulnerable.

Over the past 18 months, two pillars of global cybersecurity have flirted with apparent collapse. In February 2024, the US-backed National Vulnerability Database (NVD)—relied on globally for its free analysis of security threats—abruptly stopped publishing new entries, citing a cryptic “change in interagency support.” Then, in April of this year, the Common Vulnerabilities and Exposures (CVE) program, the fundamental numbering system for tracking software flaws, seemed at similar risk: A leaked letter warned of an imminent contract expiration.

The situation has now prompted multiple government actions, with the Department of Commerce launching an audit of the NVD in May and House Democrats calling for a broader probe of both programs in June. But the damage to trust is already transforming geopolitics and supply chains as security teams prepare for a new era of cyber risk.

As these public resources falter, organizations and governments are confronting a critical weakness in our digital infrastructure: Essential global cybersecurity services depend on a complex web of US agency interests and government funding that can be cut or redirected at any time.

Smaller companies and startups, already at a disadvantage, are going to be more at risk.

NIST acknowledges it has limited visibility into which organizations are most affected by the backlog. “We don’t track which industries use which products and therefore cannot measure impact to specific industries,” a spokesperson says. Instead, the team prioritizes vulnerabilities on the basis of CISA’s known exploits list and those included in vendor advisories like Microsoft Patch Tuesday.  As American leadership wavers, other nations are stepping up. China now operates multiple vulnerability databases, some surprisingly robust but tainted by the possibility that they are subject to state control. In May, the European Union accelerated the launch of its own database, as well as a decentralized “Global CVE” architecture. Following social media and cloud services, vulnerability intelligence has become another front in the contest for technological independence.   That leaves security professionals to navigate multiple potentially conflicting sources of data.

As defenders adapt to the fragmenting landscape, the tech industry faces another reckoning: Why don’t software vendors carry more responsibility for protecting their customers from security issues? Major vendors routinely disclose—but don’t necessarily patch—thousands of new vulnerabilities each year.

As these various reform efforts gain momentum, the world is waking up to the fact that vulnerability intelligence—like disease surveillance or aviation safety—requires sustained cooperation and public investment. Without it, a patchwork of paid databases will be all that remains, threatening to leave all but the richest organizations and nations permanently exposed.

Choosing where to invest and seek funding are among the most fundamental decisions business leaders make. Recent geopolitical shifts are complicating the analysis, however. Across the globe, governments are increasingly regulating investment flows into and out of their territories and industries. While countries have long applied constraints on inbound foreign direct investment (FDI) to advance their economic and national security interests, the use of investment laws has increased significantly and governments are now starting to regulate outbound investment as well. Earlier this year, the United States implemented controls on how US citizens can invest in other countries, and the European Union has announced plans to develop similar rules.  Understanding the scope of FDI restrictions can help prevent surprises.

To navigate this complex landscape, business leaders need an approach for assessing investments in areas that may have unclear or conflicting rules or may be subject to new restrictions as geopolitical trends shift. Mapping how evolving investment rules might affect competitive dynamics can help leaders avoid strategic mistakes—as well as identify new business opportunities.

As geopolitical competition heats up, investment controls have emerged as a prominent tool—alongside export controls, tariffs, industrial incentives, and other trade-related measures—that governments are using to advance economic prosperity and protect national security. Through investment restrictions, governments can prevent foreign companies from gaining control of sensitive industries or infrastructure, protect access to critical resources, and preserve strategic advantage in select sectors. Conversely, they may relax investment rules to create incentives for multinational corporations and investment institutions to inject funds into their economies.  In addition to the expansion of investment controls to new geographies, the scope of the rules is growing.

Three trends in particular are reshaping the global investment screening landscape:  Tightening and increasingly complex restrictions.  Growing extraterritorial reach of controls.  And heightened risks associated with sources of capital.

Decision-makers planning investments in foreign jurisdictions or with foreign funding should consider four actions to minimize risks and maximize opportunities. Track geopolitical shifts that may affect investment rules.  Focus on strategic risk alongside regulatory compliance.  Assess your investments’ regulatory risk exposure.  And understand the implications of capital controls.

By integrating these considerations into their strategic plans, investors can better navigate the complex regulatory landscape and make informed decisions that align with both their business objectives and compliance obligations.

As generative AI’s evolution continues, the next challenge for leaders is clear: making GenAI scale and deliver measurable value across their organizations.

As companies move from experimentation to enterprisewide adoption, many struggle not with the tools themselves but with the organizational transformation required to integrate them meaningfully into people’s daily work. Tools will keep evolving: It is the human side of the equation that determines whether GenAI initiatives truly succeed.

We studied one of the largest real-world generative AI deployments to date — at multinational pharmaceutical company Novo Nordisk. Its experience shows that success hinges not just on infrastructure but on how people think, adapt, and collaborate with AI. One critical lesson: While GenAI adoption and broader digital transformations have common roots, generative AI is uniquely disruptive, reshaping the nature of work itself in unprecedented ways.

Like many organizations, Novo Nordisk began with a familiar expectation: that GenAI would primarily drive productivity.   Guided by the leadership principle “time is the ultimate currency” and a campaign dubbed “Make Your Time Count,” the company launched its enterprisewide rollout of Microsoft’s Copilot GenAI tool in early 2024, with the goal of saving time and improving efficiency. And in many ways, the company hit that goal.

Each employee saved 2.17 hours per week, on average, once they began using the tool. But something unexpected also happened: Those hours weren’t what employees valued most. Employee satisfaction with Copilot was three times more strongly correlated with perceived improvements in work quality than with time saved. Employees reported quality enhancements in content summarization, content creation, and ideation. Interestingly, many employees reinvested the time they saved into people interactions, strategic planning, and creative work. As one put it, “I can spend more time and energy dedicated to strategizing and planning the rollout of my project.”

This insight challenges a central assumption of many GenAI rollouts: that the main value of the technology lies in raw efficiency. In practice, the promise of generative AI is broader and more human-centered.

Scaling GenAI: It’s Not Plug-and-Play.  Scaling generative AI isn’t just a technical challenge — it’s a change management marathon. The real work lies in supporting employees as they experiment, struggle, and eventually find their stride with these new tools.   As the company’s experience highlights, generative AI requires sustained training and support. GenAI effectiveness is about training people, not just AI models. Leaders should foster an ecosystem where employees feel supported, informed, and inspired to push the technology’s capabilities further.

Tailor GenAI Enablement by Business Function.  Different business functions require different types of support, however. Recognizing how people across roles and mindsets engage with generative AI is key to driving meaningful adoption.  At Novo Nordisk, Copilot’s impact varied significantly across functions, prompting a shift from uniform deployment to targeted enablement. Analysis comparing time savings and quality improvements across corporate, commercial, manufacturing, and research areas revealed sharp disparities.  To facilitate the process, Novo Nordisk pivoted from a uniform rollout to tailored enablement. It launched function-specific onboarding, created use-case playbooks and learning libraries aligned to job roles, and worked with Microsoft to customize Copilot features for different teams. This flexibility ensured that employees in both creative and precision-driven roles could find meaningful applications aligned with their workflows.

Contrary to some myths about digital natives, the data showed that Novo Nordisk’s senior employees tended to use generative AI more effectively than their younger peers.  Proving that Generative AI performance isn’t about tech savviness — it’s about contextual fluency, confidence, and the human ability to integrate new tools into nuanced workflows.

Overcoming Cultural Resistance and AI Shaming.  Not everyone at Novo Nordisk welcomed Copilot. Cultural resistance and so-called AI shaming posed significant hurdles, with some employees viewing GenAI as unethical or akin to cheating.  Novo Nordisk tackled the challenge with a multifaceted strategy, focusing on transparency and trust. The company rolled out ethical use guidelines, clarified expectations around output ownership and disclosure, and launched the “Spend Time to Save Time” campaign to reframe GenAI as a strategic enabler, not a shortcut.

Leaders scaling GenAI can adopt these strategies, as Novo Nordisk did, to mitigate cultural resistance:  Clarifying ethical use.  Normalizing GenAI use through champions.  Fostering safe spaces.  Addressing trust issues proactively.  And reframing AI’s role.

How does a law firm “win”?

Efficiency? Precision? Price? As the AI boom begins to settle and we see its integration across the legal industry, these qualities may no longer be the North Star.

Artificial intelligence is transforming the legal profession; today’s lawyers have access to a wide range of tools to review documents, summarize case law, and even draft contracts. This exciting new era has captured our attention as we all look for ways to work more efficiently for our clients.

But, according to Thomson Reuters’ Future of Professionals Report, AI is projected to free up only five hours per week for the average legal professional. This is a revealing figure and worthy of exploration. It is early days yet and this figure will surely change and likely grow. That said, for all of AI’s processing power, the core of the legal profession still demands distinctly human capabilities—judgment, persuasion, empathy, and trust.

The modest time savings are not a failure of AI but a reflection of the true nature of client needs and high-quality lawyering. This is where the true competitive edge lies: emotional intelligence (EQ). EQ relies on our ability to look at more than just facts. It’s about aligning different perspectives, building bridges toward your goals, and doing so with diplomacy and tact.

AI can easily handle the mechanics of law: streamlining document analysis, automating routine contract drafting, and supporting decision-making. AI’s ability to quickly parse through mountains of data is undeniable, but what makes a lawyer truly indispensable goes further than pure processing power.

Our clients operate in a global market full of uncertainty. Our role as legal professionals is to guide them through the grey area where law intersects with human behavior, business priorities, and cultural context. For this, clients don’t need answers, they need perspectives. The outcome of a deal can often turn on nuance, tone, and timing rather than facts alone. It is in these moments that EQ, rather than IQ, takes the lead.

One of my mentors, who has enjoyed an incredibly successful career, often tells me that business is meant to be a “win-win.”  To take a “win-win” approach, lawyers need strong EQ skills: Can they read a room? Do they clearly understand what both sides are looking for? Can they thread the needle to make a solution work well for both sides? This takes strong EQ.

Firms need to invest in the development of emotional intelligence in their workforce as heavily as they do in technology. AI has begun to level the playing field in terms of efficiency, but strong EQ skills will help a lawyer to stand out from the crowd.

That starts by investing in emotional intelligence at every level—from client service to talent development. EQ must be reframed not as a soft skill, but as a core competency for any successful lawyer. 

First, training should be embedded from the very beginning of legal education. It is essential that EQ become a running thread throughout the mentorship process, leadership development, and even considered during performance evaluations.  Second, leaders must model vulnerability. This isn’t something a lot of star partners are used to doing, but it is essential if we are to showcase emotional intelligence as a strength to build, not a weakness to overcome.  Lastly, we need to consider what success means in a world enhanced by AI. Yes, winning matters. But so does building trust, handling conflict, and strengthening client relationships. Reclaiming these “intangibles” as success factors will allow our people to shine.

The legal industry has always been about more than just knowledge. It’s about judgment, relationships, and persuasion. All of these are distinctly human skills. While AI may be able to replace some of the marginal duties performed by a lawyer, it will never replace the connection, understanding, and expertise a successful professional brings to every relationship.

Picture it. A sea of faces, all eagerly awaiting your next words. A bright stage, subtly drawing all eyes to the sole figure in the spotlight. This is the image of a leader who can command any crowd, captivating them with charisma, assurance, and adept communication skills.

The reality is that these kinds of leaders are actually cultivated with time and effort. It doesn’t have to be an innate gift. All it takes is the will to develop some powerful communication skills, and you’ll be well on your way to becoming an exceptional leader. Here are five communication skills that have the power to take your leadership from good to great. 

1. Make it personal: The power of storytelling.  Have you ever spoken to someone and instantly felt that inexplicable connection that makes them feel more like a friend than a stranger? The key to developing that experience in every interaction is sharing a little bit about yourself. Don’t be afraid to relate some of your backstory and the experiences that have made you who you are. Sharing your story and creating a space for open communication will make people around you feel more comfortable doing the same. Before you know it, you’re enjoying a truly personal conversation. 
2. Be gentle: The difference in tone can make all the difference.  Think about the tone you take when you speak to a group of people (or when you speak to a crowd on a stage). Are you calm and soothing, or do you tend to get a little worked up—addressing the group in a near shout? If it’s the latter, make a point to tone things down. Be patient and get your point across with a sense of careful, measured calm. Being a great leader and excelling at communication is as much about respecting others as it is about being respected.
3. Truly listen: The underrated art of empathy.  Can you remember a time—maybe early in your career—when someone in a position of authority over you stopped and listened to you?  We don’t mean a casual acknowledgment that you’ve spoken. We are talking about the kind of sincere, wholehearted listening that makes you feel truly seen and heard. It’s a gift to experience that kind of empathy, especially from someone in a position of power over you. Be sure to give that gift to your people regularly. 
4. Stand out: Make your mark, your way.  It’s important that every interaction you have with another person leaves a lasting impact. After all, when it comes to good communication, being remembered is half the battle. Maybe you’re not the kind of leader who is remembered for making grand speeches in front of crowds. That’s not a problem—there are all kinds of leaders, and each of them has a different way of standing out. The important thing is that you develop your own unique leadership brand, so that people always know when it is you who is in the spotlight. 
5. Keep an open mind: Different people, different stories.  When it comes to leadership and communication, one of the most common pitfalls to avoid is the closed mind. Don’t jump to conclusions about what others are telling you. Don’t be so quick to ignore someone’s idea or suggestion before you even understand where they came from. Every person has a different story and a different way of perceiving the world. As a truly great leader, one of your jobs is to uncover those stories. Be open-minded and remember that every person is an entirely new opportunity for interaction, listening, and communication.

In the 1980s, Kodak’s brand was synonymous with photography.  When something memorable happened, everyone called it a “Kodak Moment.” It was a brand that most everyone interacted with on a daily basis, and it held a dominant position in the market.

Nowadays, the film camera is a relic of a time gone by.. And it would be easy to relegate the Kodak brand to the scrap heap of once major companies that are now forgotten, like Pan Am World Airways and Blockbuster.

But Kodak still exists, and it’s actually a pretty active company. It’s not just their brand licensing; the trademark yellow and red K adorns all sorts of apparel and other lifestyle merchandise in foreign countries, and brought in about $4 million in the first quarter of this year. Kodak’s high-quality film and printing is still its top-grossing business, but it’s also pivoting into new areas that use its core competencies. The Kodak of today and the future, CEO Jim Continenza told me, is a B2B company specializing in chemicals, materials handling and manufacturing. In May, Kodak announced it was working on a new $20 million plant in Rochester, New York making chemicals for the pharmaceutical industry.

“That’s a hard transition for people to accept,” he said. “You don’t get to go on the race cars, all those great things don’t happen. You focus clearly on your business. We had to focus on our customer, our capabilities, and then our profitability, which was way out of whack.”

Most companies will never have to make as sharp of a pivot as Kodak, but the company, under Continenza’s leadership, is an example of how it’s possible to make a turnaround with the right mindset and a willingness to focus on what’s central to a company’s function.

In the 1990s, digital photography began to take over. Kodak was integral in early digital photography research and development, but did not make a hard pivot until it was too late. As revenues plummeted, the company tried different strategies—purchasing chemical companies, leaning into digital camera manufacturing and investing in the home printer market—but the company filed for Chapter 11 bankruptcy protection in 2012.

Continenza, an experienced businessman who had helped lead other companies through turnarounds, was named to Kodak’s board of directors in 2013 while it was still in bankruptcy. “I’m the gift that came with it,” he told me. Continenza was named executive chairman in 2019, and became CEO in 2020.

“The board asked me to step in and I felt responsible,” he said. “Also, I was there too when it went down. ….I’m not exempt from it because I sit on the board and go, ‘Not my fault.’ At that point, you have an accountability to the shareholders that trust you.”

Continenza also said he wanted to make sure Kodak wasn’t letting down its employees purely based on poor management choices by past and present leadership. Those employees, he said, were counting on Kodak for their whole livelihoods—while executives in leadership would be less likely to face financial turmoil based on things going wrong with the company.

Continenza said the rough outline of how he got Kodak on the right path is relatively simple: When you’re losing money, stop spending so much. If consumers don’t want your products, figure out what they do want. And make sure your internal operations are actually running smoothly.

Of course, there’s more nuance than that. But the major issue was clear to Continenza on his first day on the job. He spoke to more than 1,000 Kodak employees in the company’s theater and asked them to tell him what Kodak did. Nobody could answer. And as Continenza dove deeper into the company, he discovered something that Kodak was good at doing: making products nobody wanted.

So Continenza went back and examined Kodak’s core competencies, and checked in with consumers—a group that Continenza said had been ignored at times. Historically, Kodak has been an innovator with more than 27,000 patents, and today’s Kodak is still incredibly innovative, he said. The company doubled down and improved on what it does best. Film and commercial printing is still the largest segment of the company’s business, making up about 72% of revenues in FY 2024. Kodak does top-of-the-line digital photo printing using lithographic plates—the best and fastest in the world, and the only ones made in the U.S., Continenza said. The company continues to make high-performance film, which nowadays is used by top-of-the-line filmmakers. Kodak also manufactures film for other companies, which use it for still photography, X-rays and video.

But Kodak also started branching out its chemical business for uses beyond coating film and photo paper or development. The same institutional knowledge now goes toward making coatings for EV and other batteries. And the soon-to-come pharmaceutical plant, which is expected to be operating later this year, will make FDA-regulated diagnostic test reagents. Continenza said he found that pharmaceuticals, an area Kodak first got into a few years ago, is a place that the company has expertise—but can also create a U.S. source for these critical chemicals.

Aside from finding areas where Kodak can succeed, Continenza has focused on paying down the company’s debt and obtaining more appropriate financing to go with the company’s restructuring.

Continenza said his top corporate value as he’s tried to reinvent Kodak is having the courage to compete—and try to win.

One of the first and most important decisions entrepreneurs make is whether to go it alone or bring on cofounders. Many investors favor startups with multiple founders, believing that a team reduces business risk by diversifying skills, sharing responsibilities, and preventing burnout. But forcing a cofounder relationship can do more harm than good: Research by entrepreneurship expert Noam Wasserman and others shows that conflict within the founding team is one of the primary reasons high-potential startups fail.

The author’s research and experience have revealed that when a great match happens it can be magic—but like any marriage, a cofounder relationship should not be entered into rashly.

Before embarking on the courtship process, it’s important to first assess whether you need a cofounder at all. There is conflicting data on the correlation between a cofounding team and successful outcomes.  When deciding whether to bring on a cofounder, you should evaluate whether you have unmet needs in three key areas:  partnership (e.g., to brainstorm with), expertise, and experience.

If you decide, after applying the lenses above, that you need and want a cofounder—whether it’s at the inception of your venture or later on—do not rush the process. Finding the right cofounder is not as difficult as finding a life partner, but it’s close. It’s a courtship, and despite the urgency you may feel, it is critical to think carefully about what you want in a cofounder and spend time nurturing prospective relationships. Certainly, patience seems to pay off.  Sixty percent of the cofounders the author surveyed with successful startups—those that had been operating for more than three years and had raised funding through a series B, the point at which product-market fit has been established and investors expect rapid growth—had spent more than 12 months working together or interacting in other capacities before starting their venture. Approximately 25% of them had been former colleagues or were personal friends, suggesting that prior relationships are conducive to scaling a startup.

Drawing on her experience working with, investing in, and advising startups, the author has identified a set of best practices for selecting a cofounder. Even if you had one in a previous startup, the process can still be valuable as you think about the distinctive needs of your current venture.  Conduct a listening tour.  Describe in writing what you’re looking for in a partner.  Choose half a dozen people to “date.”  Test the relationship in various situations.  Have vulnerable conversations.  Have a prenuptial (prenup) conversation.  And meet each other’s partners, families, and friends.

Once you’ve found your ideal partner, the hard work is just beginning. As you dig in, it can be easy to forget to nurture the relationship. Without routine check-ins and alignment discussions, cofounding teams can devolve into resentment and conflict. Not only do the cofounders suffer but tension can spread to team members and raise red flags for investors. Here are a few ways to foster a strong cofounding team:

 A) Set regular cofounder meetings—ideally two sessions a week—to talk about strategy and the direction of the business and to air any concerns about the relationship.  B) Spend time together outside work at least once a month to deepen your trust and personal connection. This is especially important if you work remotely. The deeper the connection, the easier it will be to handle stressful situations. Respect boundaries to make sure there is clarity around decision-making and to avoid stepping on toes.  And C) Hire a coach to work with you as individuals and together as a cofounding team. It’s much easier to talk through challenges with an expert when things are just simmering than when an issue has come to a full boil.

Whether it’s earning extra money for life expenses, building an emergency fund, testing out a new business idea or pursuing a hobby, the number of people with a side gig is growing – and fast.  That trend continues to grow with the next generation of entrepreneurs: more than two-thirds (67%) of Gen Z started their businesses as side gigs, compared to less than half of the Boomer generation (48%). 

So, how can you lay a strong foundation for a smooth transition and prepare yourself for financial and business success, while managing your business efficiently?

1. Treat it Like a Real Business from Day One.  As we know, many side gigs start out as a passion and therefore, financial management may not be a strong skill for every founder. As such, it’s important to keep personal and business finances separate, and streamlined (in different buckets) for tax purposes. One option is to set up a corporate entity to keep your side gig separate from your personal affairs.  If finance isn’t your forte, utilizing online accounting software is one way to keep finances in check by creating routines and structure.
2. Know When to Go Full-time.  Every journey, from side hustle to growing your business full-time, is different. Having checklists in place can help assess the risks to determine whether it’s time to make the leap, and also help you explore your intrinsic motivation once this becomes all you do. Consider practical things like: What about the business is succeeding and why?  Is there more demand out there for the service you provide than you can fulfill part-time?   How do you envision marketing your service and will it require any investment?  Is your business income consistently replacing or nearing your current full-time job salary?  Do you have 3-6 months’ savings in place as a buffer?   And deeper questions like:   If you took this side hustle full-time, would it still be fun? Would it give more or less satisfaction than your current gig?  What parts of your side hustle give you energy and what drain your energy? How much of each will you have to do if it’s a full-time job?  Answering practical and deeper questions for yourself helps you make a more informed decision about taking a leap like this. Don’t have the answer to the deeper questions? Think about someone who knows you well — a family member or long-time friend — to help you reflect on “you,” and talk things through with, without judgment.
3. Develop a Tailored Business Plan.  No matter the size of your business, developing an “outside in market view” of your business category, and then a roadmap can enable entrepreneurs to grow with a sense of purpose. Research shows that nearly half (49%) of small business owners cite self-doubt or fear of failure as a top challenge when starting out. Building a framework helps to define what success looks like while ensuring systems can support future growth and expansion.  Make sure you start with the market you’re serving and where it’s growing, and how your business fits in. Consider the value a business idea brings to customers, the market demand, and how to differentiate your business from competitors. Then identify goals and key milestones for the next 6 to 12 months. This could include hitting revenue benchmarks, launching a website or gaining your first 10 clients.
4. Prioritize Cash Flow Management Early.  Issues can sneak up fast if you’re not prepared or actively monitoring what’s coming in and what’s going out. There is often a gap between spending and making money, especially when there’s a need to invest in new business growth or marketing before seeing any income. Other challenges can include forgetting to account for hidden costs like subscription or website fees, packaging and taxes.   In order to maintain healthy cash flow and build resilience against any future economic uncertainties, small businesses should also prioritize strategies that encourage their customers to pay promptly. 
5. Grow Smarter, Not Harder.  Making the transition from a side gig to a full-time business can sometimes feel like a lonely journey – especially if you’re running your business solo. Leaning on other small business owners, a friend you can confide in, accountants and bookkeepers, technology – and engaging in a community of others facing similar challenges – can allow business owners to grow smarter.