Family Business

“Don’t do it.” That advice, Andrés Modak G12 WG12 says flatly, was what he and Rachel Cohen WG12 heard when they told friends and family they planned to start a company together. “A lot of people think you’re crazy when you tell them that you’re going to start a business with your significant other,” Rachel echoes.

They forged ahead anyway—and today, the couple runs successful homeware brand Snowe. The name is a nod to the clean and classic aesthetic they bring to designing linens, tabletop goods, and other home accessories. Soon after they launched online in 2015, Architectural Digest wrote, “This site may be your new favorite for home essentials.” The praise hasn’t stopped: Snowe’s products have made countless “best” lists, and sales have consistently grown 300 to 400 percent year over year, Andrés and Rachel say, for the past four years. They’ve also added two brick-and-mortar shops, in New York City and the Hamptons.

“If we heeded everyone’s advice, we wouldn’t have necessarily done it,” Rachel says. “But I guess part of entrepreneurship is going against the grain and what everyone tells you to do anyway.”

She and Andrés aren’t the only Wharton graduates who’ve turned their relationship into a successful business. We talked with four alumni couples who say their entrepreneurial partnerships are an asset both at the office and at home. For them, discerning where personal ends and professional begins can be tough, but they’ve used their doubling of Wharton degrees to shape strategy, be effective leaders, and grow their companies. Their examples offer advice every business owner can use.

A Competitive Advantage

About half of U.S. companies don’t make it past their five-year anniversaries. Rachel and Andrés believe the success of Snowe owes a lot to their decision to team up in life and business. Andrés says they’re lucky to have different yet complementary skill sets: She oversees finance, business development, and retail, while he leads marketing, creative, and technology. However, they work easily together to make decisions when necessary.

In a 2018 survey by Family Enterprise USA, 78 percent of respondents said their family businesses had revenue growth in 2017, with the majority citing “strategic business choices” as the reason. “The thing that was really important is, we’re always strategically aligned in the vision of the business,” Rachel says. “That’s not to say we don’t ever disagree. We have healthy debates over things, but we’re always aligned on which direction we’re taking the company.”

Ada Chen Rekhi W07 and Sachin Rekhi ENG05 W05 have taken a similar approach with their marriage-plus-tech startup adventures in Silicon Valley. At their company, the collaborative-notes app Notejoy, Sachin takes the lead on product design and engineering, while Ada focuses on growth, marketing, analytics, and operations. They give each other feedback regularly, but they’re also clear about who “owns” each area. The formula is working: The couple is on their second company together; their first, Connected, a contact aggregation tool, was acquired by LinkedIn. Notejoy, which debuted in 2017, has increased its user base by 210 percent in the past year.

Being clear about which partner is responsible for what, says Sachin, is “not only important for spouses working together—that’s ideal for any cofounding relationship. Looking back at my first startup, where we had three cofounders, we didn’t have that separation of responsibilities. We were all involved with everything related to R&D, and that was a recipe for disaster, because decision-making was incredibly slow.”

According to a 2019 report by Score, a nonprofit network of business mentors, 1.2 million small businesses in the country are run by spouses. Most love connections don’t incorporate, but there are aspects of successful relationships that translate well in business. There’s trust, of course, and, as any partner who has sent a “message” across a crowded room with just one look knows, easy communication.

“Our values are the same. We’re working toward the same end goal, and you trust the other person implicitly,” Rachel says. “Nine times out of 10, I don’t want to be brought into a decision that Andrés is making, because I know he’ll make a sound decision and go in the right direction. And if it’s not always the right direction, we course-correct. But the relationship allows us to have that inherent trust and to divide and conquer in a way that I think might be hard with those who aren’t a couple.”

Traci Shanbrun Lerner W81 and Mark Lerner C80 W80 have vivid recollections of the early meetings they had with prospective investors in their hedge fund, Chesapeake Partners. Their skepticism about married business owners baffled Traci. “Investors were much more concerned that we would get divorced. And I’d look at them with such shock,” she says. When two acquaintances have less in common, she notes, “There are so many more reasons why their relationship as business partners should break up than my relationship with my husband.”

For a quarter century after its 1991 launch, their multibillion-dollar fund offered some of the industry’s highest returns—in excess of 14 percent compounded annual net return amid a typical nine percent average over those years. (In 2016, the Lerners transitioned the firm to a family office.)

“I think the advantage we had over others is that Mark really kept me away, certainly during market hours, from having to deal with anything other than the market. There was such total trust between the two of us,” says Traci, who manages the portfolio while Mark takes care of day-to-day operations.

Allison Young Chávez C07 W07 grew up seeing a model for family business success firsthand; her parents have run a real estate development company for 30-plus years. Still, the experience also taught her that “it’s hard to separate personal time from the work time,” she says. “I said I would never work with my spouse, and here we are,” she adds, and laughs. She and Iván Chávez W07 opened their first Sweet Paris creperie in Houston in 2012, shortly before they got engaged in the French capital.

Alison says that in addition to helping her husband fulfill a dream—his craving for the crepes he devoured regularly while studying abroad in France couldn’t be satisfied in Texas—the business has shown her that her parents were on to something: “Now, I really appreciate the ability to work with my spouse and have a family. It gives you a different kind of flexibility. You lean into each other at different times. When one person needs to focus more on the family, the other person can pick up the slack. It’s been a wonderful thing. Obviously, you trust your spouse the most, so to be able to have them as your business partner is definitely a gift.”

Who’s the Boss?

Division of labor may be a battle in many households across America, but all four Wharton couples say they share power easily. “I think we’re both very competitive people, but we’ve never been competitive with each other,” Mark says of his dynamic with Traci at Chesapeake Partners. At Sweet Paris, Iván says, the secret is simple: “I believe it is key to a successful working relationship with a spouse to make sure you marry someone smarter than you. I am more driven by energy and instinct. Allison is analytical, organized, and sharp. I could never be as detailed as she can.”

Still, however natural the leadership balance seems to a couple, both parties need to project that to their teams. Employees of family businesses can worry they’ll be told a variation of “Ask your mother.” To expand Notejoy in the future will require attracting top talent, and Ada is aware that she and Sachin need to set the right tone. She expects their experience co-leading teams at LinkedIn after the company bought Connected to be useful.

“The challenge with [life] partners is, there’s always that fear that they’re going to vote as a group block or that decisions will be a little bit more emotional,” she says. “Because now you might have a wife telling a husband, ‘You are wrong. I disagree. We’re going to do something that takes away your budget, your authority.’”

Allison acknowledges that she and Iván have different leadership styles—she shares that personality test results label her a “Napoleon” and Iván an “Oprah.” From Sweet Paris’s earliest days, the couple has had a managing operator to handle day-to-day functions and staffing. The duo also regularly compromises. “If one of us feels strongly about something or someone, the other lets us take a chance on it,” Allison says. “And sometimes it works out, and sometimes it doesn’t. But I think the important thing is, we can move on from it quickly and continue forward.”

With nearly 40 Snowe employees and their division of responsibilities, Andrés and Rachel directly manage separate teams. Acting professionally is a given, Andrés says, but adds, “The culture we built here is incredibly familial, and it’s very close-knit and collaborative.”

Performance Review

Couples are driven to therapy over everything from tiffs about running the household to managing in-laws. Now imagine having to agree on a new sales strategy, or constructively critiquing your spouse—not over the best way to fold a fitted sheet, but about a big screw-up at the office.

The Lerners say they’ve focused on supporting each other above everything else. “Mark was probably a better cheerleader to me than I ever could have been, to let me talk through each investment and whether the right thing was to stay the course or not,” Traci says. Mark jokes that they never needed to call a board meeting to resolve interpersonal issues.

However, Ada knows married startup founders who have stumbled over defensiveness, emotion, and accountability. “For us, it’s been really helpful over time that we’ve developed a shorthand and a certain amount of trust in one another where we can deliver feedback and both of us take a step back and say, ‘This is in the best interest of the company,’” she says. “The feedback isn’t judgment on me as an individual.”

That shorthand ends up being an advantage. “We save ourselves the time of needing to manage each other’s feelings because we know the spirit of where it’s coming from,” Sachin says. “And that actually makes it really effective and efficient for us to work together.”

When they started Connected, Sachin had a lot of coding to do. “Ada always had questions for me about the various business or marketing aspects of the business. And so I ultimately told her: For me to be most effective as an engineer, I need large blocks of time when I can get work done,” he recalls. They adopted a common software engineering practice: During “daily stand-ups,” they catch up, help each other where they’re stuck, and set goals. They run Notejoy out of their home, so lunches turn into stand-ups, as do evening walks with their four-yearold Havanese dog, Dexter.

Andrés, too, has heard horror stories about thorny co-founder relationships, and counts himself lucky: He and Rachel can be very direct with one another. “We’re both pretty thick-skinned,” Rachel notes, “and I think that comes with the territory of entrepreneurship.”

Work-Life Balance

“I no longer call it work-life balance. I call it work-life integration,” Ada says. “We can have breakfast or go on a run, and in the middle of it, we might be talking about a sales deal or pricing strategy or product strategy, and there are no barriers. It’s very fluid—which isn’t for everyone, but it works so seamlessly for us.”

The “no email after 5 p.m.” rule doesn’t exist with these entrepreneurs, but they all point out that their work habits function for them as individuals and in their respective relationships. That might mean, as Sachin recalls, talking next quarter’s goals while celebrating a wedding anniversary. Traci says she relates to that blurring of boundaries: “We could go out to dinner and say, ‘Okay, we’re not going to talk about work at all,’ and I promise you, every time at dinner we ended up with something about the office or something about politics that affects the market.”

Rachel and Andrés’s personal lives are embedded in the Snowe brand. They were inspired to start the company after getting frustrated while furnishing their own New York City home—seeing high-quality goods that were outrageously priced and getting lost in piles of lower-end wares in big-box stores. In 2017, they opened an interactive showroom space in their home with no regrets. “That was a crazy, nutty idea that paid off in volumes, because our customers loved the experience, and it was incredibly powerful to share Snowe in a very intimate way,” Andrés says.

Instead of drawing hard lines between home and office, the Lerners juggled a business with raising four children in a totally coordinated fashion: They balanced school plays and business meetings in a way that “made our life much simpler,” Traci notes. Blending their marriage with work, according to Mark, also helped them set a positive example and create a family-oriented company in an industry known for long hours and stress. “I think that investing environments are by their nature challenging, and there’s always tension because of the stakes that are there. We were able to avoid that by having different priorities,” Mark says. Employees made it to their children’s Little League games and recitals, he explains, because “everyone saw that we modeled that.”

In many ways, the blur between professional and personal means these couples end up with much bigger families. The Lerners have lost count of how many times they’ve visited hospitals for the birth of a baby or helped employees deliberate over big life purchases like engagement rings and houses. Allison already sees the expansion of Sweet Paris in terms of family and says the entrepreneurs franchising the company do, too: “Part of the reason they want to be part of this is because it’s so personal, and it’s our family business, and it’s going to be their family business, too.”

Profit Sharing

One of the trickiest tightrope acts in any relationship is money, and spouses who start a business together double that risk. Without a diversified income, Rachel says, “When you hit a low point, it’s just that much more pressure.” But, she adds, “I think at the same time, you’re that much more motivated to figure it out.” Research by Justin Craig, clinical professor of family enterprise at the Kellogg School of Management at Northwestern University, indicates that a focus on creating a legacy for future generations leads family-business entrepreneurs to think about long-term sustainability more than quarterly profits.

Iván credits Sweet Paris’s success to Allison’s analysis and the Excel model she created for making sure they were on solid financial footing at home as well as with the company. Allison says her “finance concentration side” was wary when Iván suggested opening a creperie: “I thought, are you crazy? New restaurants have an 85 percent fail rate!” But she agreed to explore the idea and buy a crepe griddle for their apartment kitchen; as the stacks of crepes grew taller, she was calculating costs and profit margin. One of the couple’s strategies has been to expand Sweet Paris by reinvesting 100 percent of their profits into the business and growing deliberately instead of taking on debt and ramping up quickly. “I think we definitely minimized that risk, at least in the beginning, when that fail rate is highest, by both of us keeping our day jobs,” says Allison, who has worked in investment banking and real estate development and is now dedicated to Sweet Paris. Iván is the executive vice president at resort developer Grupo Vidanta; the job offers a steady source of restaurant inspiration.

The Lerners didn’t have much when they started out. They did have two young children to support, and they hit rough patches in the market. “Were the first couple of years really hard? Absolutely. Did we question the sanity of the decision we made? We did,” says Traci, who left a job as head of risk arbitrage for investment bank Dillon, Read and chose Baltimore as the new fund’s headquarters because she didn’t want to raise her children in New York City. “We weren’t worried about eventually being able to figure it out, but we weren’t sure it was going to work.”

Long-Term Strategy

A 2019 report from Wharton and City University of London examines emotion’s role in entrepreneurship and suggests that “hope trumps fear.” The study found friends stay committed longer to a venture due to their relationship. Though the researchers didn’t focus on spouses or romantic partners, it’s not a leap to connect the dots to businesses like Snowe, Notejoy, Chesapeake Partners, and Sweet Paris.

Rachel says she and Andrés are both so passionate about home, retail, and their customers that they can “geek out about it and talk about it forever.” They have plans (still under wraps) to release several new product categories. “We have lots of ambition and aspirations to continue to build and have Snowe become a household name,” Andrés says. Sweet Paris is also looking to grow after Iván and Allison invested in a different sort of expansion—three children in four years. Now they’re eyeing other Texas cities as well as markets in Southern California and Southern Florida.

By all indications, Notejoy isn’t likely to be Ada and Sachin’s last venture together. “I’m married to the person that I consider to be my professional and life coach,” Ada says. “If I have a difficult negotiation, if I have to let someone go, if I’m about to go into a conversation that I find challenging, there are so many times in my life when I’ve turned to Sachin.”

The Lerners expect to keep running their family business indefinitely. “What has guided Traci and me over the years is, if each of you puts the other person first, you’re never going to have a problem of consequence in your relationship —whether that’s at home or with a business,” Mark says. “There are always going to be bumps in life. And if you’ve got a partner that you work incredibly well with, it just makes life better.”

Janine White is a freelance writer and editor based in Philadelphia.

Published as “Family Business” in the Fall/Winter 2019 issue of  Wharton Magazine.