If you’re a business owner in Spain, people expect you to hire friends, relatives, or even that one guy you spoke to at a party for five minutes. Ditto for lending money if you’re doing well. At the end of the day, friends and family help each other — even if that means violating market norms. Politicians do it when they hold a powerful position. They grant public employment to family members, whether they are a good fit or not. Maybe that’s why Spain isn’t the best country to start your venture.
No wonder money destroys so many relationships, as it lies at the intersection between social norms and market norms. We make money in the market — as employees, entrepreneurs, or public officers. But we spend it socially — on drinks with friends, gifts for relatives, or on luxury cars to impress our neighbours. These two spheres have clashing incentives: market norms seek maximising profits, whereas social norms pursue maintaining harmony and being liked by others.
The more distance there is between these two realms, the less problems you will deal with.
Running a successful business requires that you behave like a cold, ruthless, profit-maximising machine. That means not hiring someone just because you have a good personal relationship with them. Even if they are 100% qualified for the position, don’t do it. They will expect a favourable treatment, even when they underdeliver. You can put yourself in a tough spot, like having to fire them to keep your venture afloat.
In contrast, social norms are all about trust and cooperation. When I pay for a drink for friends, I don’t expect that they pay me back. I see it as an investment in our relationship. If a friend needs money, either I donate it or not at all. But I don’t lend it to them. That would change the dynamics of our relationship.
Don’t hire friends or family members: unless you’re comfortable with potentially having to fire them.
Don’t lend money to friends or family: just give it away or don’t, but don’t expect to have your money back.
Don’t date colleagues: it can be tempting if you spend a lot of time with them, but it doesn’t end well.
In a nutshell: don’t mix your professional life with your personal life.
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