Do you have the business intelligence to bring on a smart technical partner? Let me share with you a little story so you can answer that for yourself.
A year ago, I was approached by a person who was doing a start up. He invited me out for dinner to talk about the venture. He made me sign a non-disclosure and then told me all about his idea. As I listened, I became convinced his idea hadn’t been thought through. It lacked a solid revenue model and had no business plan. He had failed to do research such as costs of operation, primary competitors, and whether or not there was even a demand for his idea.
I politely told him all sorts of issues he needed to address before I could consider his opportunity. I gave him a lot of free technical advice as well as some suggestions for revenue streams. He wrote it all down, shook my hand, and the meeting ended.
A week later he emails me a document. The document was clearly rushed (grammatical errors abound). Nevertheless, it contained a business model, use cases, and other important considerations I had asked him to make. I was a little taken aback that they were rushing such critically important steps, but I let it slide. He offered me a substantial stake in the company in exchange for technical guidance and some (relatively easy) development work.
I took a week to think over the idea. I decided the idea was simply not good enough to succeed. I declined his offer and told him I would be happy to give him advice as he needs it on a casual basis.
I received no reply.
Months go by and I read news about another startup doing something very similar to what he was doing. I sent him information about this startup in hopes of helping him out.
I received no reply.
That was the last time I decided I would offer any form of help to this individual.
My story illustrates some important things this man did wrong:
- He rushed a business plan on an idea that didn’t sell itself.
- He decided I wasn’t worth his time since I wasn’t going to join his company.
- He made no attempt to leave me with “good feelings” about the company.
The point of this story isn’t whether or not his business succeeded (it did not, as far as I know); rather, the point is that good will shouldn’t be needlessly ignored. If you plan on starting a business one day, I hope you are taking notes! Allow me to address each mistake:
- He rushed a business plan on an idea that didn’t sell itself. Some ideas are so revolutionary that a business plan tends to write itself without much thinking, but most aren’t. His wasn’t. The planning stage is crucial to the long term success of your company. Without a full understanding of your market, you are driving blind without any knowledge of obstacles (competitors) or a destination (customers).
- He decided I wasn’t worth his time since I wasn’t going to join his company. Business is just as much about who you know as what you know. A contact may not come through this time, but you never know in the future. Burning bridges with people who aren’t your competition is what dumb people do. Kevin Federline has a rap CD because he married Britney Spears. iTunes has content from Disney because Jobs is on Disney’s board of directors. Kevin Rose gets attention for his newest startup because he founded Digg.
- He made no attempt to leave me with “good feelings” about the company. It should be the #1 priority of any business owner to make sure every potential customer, partner, and employee feels positively about your company. There is no reason to be pissing away positive karma. You never know when someone you were a jerk to might later be in a position to (not) help you when you need it. Again, it’s who you know and if they like you (see #2).
The sad part is that this isn’t the only time I’ve seen someone make these mistakes in front of me. A few times a year, I receive offers from entrepreneurs of new business ideas they want to “share” with me. Some people do this well, and I gain respect for them. But most people suffer from extreme self denial. The problem is that people get too caught up in their own world/ego to realize that they need the help of others far more than those people need them.
- When trying to recruit, make sure that the other person walks away feeling like they might have missed out on something really great.
- Someone you are a jerk to now might be your boss, partner, or competitor later. Be nice. The business world is smaller than you realize.
- Success is in the execution, not the idea itself. Good execution begins by building a positive, professional image.
If you’ve ever wondered why highly successful CEOs tend to be extremely friendly people, now you know why.