Throughout my long enrepreneurial career I've been engaged in large-scale deals. Some were startups, some simply large contracts. I've taken on partners, sometimes of the company itelf other times just in the one deal the company was engaged.
Most times they worked out fine, but on three separate occations I encountered situations that confound me to this day.
As an entrepreneur you're going to have to align yourself with many types of people. A 'good guy' is not always a 'nice guy.' Yes, there is a difference. This is why on occation I've been so blind-sided.
Yet it is more than just being a 'nice guy' or being a 'self-serving-I-don't-care-about-you guy.' A self-serving guy could look at a situation and do what is good for you, simply because it is good for him too. You may read that as him being a nice guy. He isn't.
But how do you know? And how do you know if a decision is mutually beneficial, and if you think it is, should you relax and bet on it? We'll get to who you spot bad partners in a moment. On the second qestion, the answers are you don't, and no, you shouldn't.
In all three of the situations I was invovled in we were inches from completing the plans we'd laid out, some a year or more in the making. Yet in all three instances the 'partner(s)' did the unthinkable -- it wasn't in their best interest, but they did it anyway, and accidentially pushed me off the cliff in the process.
In scenario one we had presales of a $100,000 through the largest independent distributor in the USA for a new product we'd seeded the market with, and ready to go into a full marketing campaign. But the partner 'borrowed' the promotion budget at the apex of that campaign; weeks unfunded caused the loss momentum, and the produc died. In scenario two we had a finished product that I'd just locked down worldwide distribution for, and secured $250,000 in development funding for the follow product; my one partner blew up the relationship with the other partner over $5,000 he wanted me to advance him. In scenario three we also had a completed product, built up market awareness and anticiaption, and the night of our media launch -- with 50 journalists in the room -- several partners decided not to show or release it live to the market.
Three deals, hard fought, big investment, big upsides all in the take off or just after take off stage, and all brought down by greed, narccism, and ambition-ego repectively.
Therefore, because on inspection their best interests and yours seem to be in lockstep, that doesn't mean that it is. Remember that everyone is right from their view of the world. So if they are looking though a prism skewed by greed, ambition, fear, nariccism, self-righteousness, ego or some other motivator, they may see the reality on the ground much different than you do.
They say when you do the same thing over and over and expect a different result each time, it is the clasic definition of an insane man. Does three times count? Maybe I am bat-shit crazy for some of the people I've done business with, but you can only get up if you fall.
A friend and fellow entrepreneur once put forth an idea that we debated. Not to say he is in school, but rather that he consumes books and articles always looking to expand his understanding of what works and what doesn't, in business.
What he gleened from all that reading was that "Character is more important that talent." We verbally wrestled with those implications some time back. Now, looking back with the clarity that only time and distance can provide, I have to agree with him. Character is more important than talent.
You can do business with less-character individuals and hope to think many steps ahead. But when that moment comes, and it will, how do you know the reality on the grround that they see, vs. what you see?
So to avoid the grief and stress, just evaluate those partners and associates -- you're considering -- for good character first.
How can you tell? Look at the little things. Do they resepct your time, or tell you "I'll be there in 10 minutes" and leave you hanging for an hour? Are they honest or do they exaggerate every story -- even the ones you know are false? Pay attention to how they treat freinds and fmaily, if yo uhave access to observe that. Ask questions designed to get to the root of how they think and feel about things.
Victor Hugo once said "Change your opinions, keep to your principles; change your leaves, keep intact your roots."
In crisis, and entrepreneurs finds themselves in crisis from time to time, one must rely on their principles to navigate them through rough times. When asked how Franklin D. Roosevelt was able to navigate the Great Derpession and World War II, his wife Eleanor said that he had strong principles in place before crisis struck, he didn't make them up according to the situation.
Character matters. Principles matter. They are the roots from which the tree of you is forged.
Business is exciting, creating something from nothing and making it financially viable is the ultimately high. The ultimate low is getting through all the hard work and right to the edge of success, just about to let go and let it fly, when someone shoots it from you hand, with is crashing and shattering upon the ground. It is a devastating feeling to live and breathe something only to watch someone kill it in front of you.
Next time if you're lucky enough to have the opportunity for a big deal, choose a partner based on character first, then let talent, connections and other assets follow.