20 February 2014

How To Be Human, Part III

Note that this is a slight tangent in my series on teaching new entrepreneurs how to behave like decent humans. 

Everyone loves a winner, right?

Well... not so much. Everyone loves a good winner, yes. But trust me - there are more ways to lose by winning than you can imagine. And one of the easiest ways as an entrepreneur to turn your win into a loss is by fucking over the people who helped you win.

Sharing your successes with the people who helped you succeed is just basic human decency. But it's also a good practice. I'll explain through a little story telling...

About 15 years ago or so I helped out a few entrepreneurs in a very small manner. I was writing content for developers on Netscape's website, and I wrote about a very cool Web Application Server product. When ATG eventually went public, Joe Chung and Jeet Singh did something very cool. They threw a few friends and family shares my way to thank me.

Because it's The Right Thing.

It's the right thing to do as a decent and ethical human - but also because it's the right thing to do in business. This is a small industry, you never know when you might need someone in the future, and it's always good to earn some favors due. In fact, since then I've done all I can to help and support their future businesses - because they are the kind of decent people (as demonstrated here) that I want to see succeed.

I feel like every entrepreneur knew this 15 or 20 years ago.

Now contrast that with a more recent story.

An entrepreneur I know sold his start-up. A few of their employees were not desired by the acquiring company, so they were terminated at the deal. Many of these employee also hadn't been at the company for a year and thus hadn't vested any shares.

The entrepreneur cut loose these employees, who had helped the business grow to the point where it was desirable enough to be bought, without any sort of pay out.

So the entrepreneur just had a big win - which was not fairly shared.

Now... was this something the company had the right to do? Well... I'm not a lawyer but I'm confident in saying of course they had the right. But just because you can do something doesn't mean you should.

So now this entrepreneur has some potentially pissed off former employees who feel screwed over. And it's a fucking small industry. And people talk.

This is wrong.
And it is stupid and short-sighted.

I was involved in the acquisition of an agency years ago. As with many agencies, the only shareholders were the owners of the business. But when the deal closed, they made sure that every single employee got paid something. Now... in some cases the payouts were not big or anything, but that's not the point. They shared the win.

I bet if you talk to any of those employees they're loyal to those owners to this day.
I bet if you talk about the agency in the market - you hear nothing but good to this day.
And I bet if you talk to those owners - they haven't regretted sharing that win for one fucking second.

Because being a decent person is more important than being a successful entrepreneur.

1 Comments:

At 7:04 AM, Blogger Chris said...

One of my friends from high school was one of the first Internet millionaires. He had 1/6th of his company, his co-founder/CEO had 5/6th. The reason? When they founded the company, he put in $2,000 and his co-founder put in $10,000.

When the company was sold, the CEO reneged on all his promises to grant equity to employees. He had made promises and provided paperwork, but never signed it, and refused to do so once the acquisition offer came in.

My friend took 25% of his take and shared it with the employees.

A couple of years later, his co-founder, now a friendless, gambling-addicted multi-millionaire, went out into the national forest and committed suicide. All that money couldn't buy him happiness, especially after he screwed over all his ex-friends.

 

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