Larry Luster – Entrepreneurial Agony Aunt

Agony uncle[ Larry Luster – The politically incorrect, say it how it is, agony aunt (uncle). No one knows where he was born, where he grew up, or much about his family. He’s seen it before and done much of it before. He’s here to help. All advice is free, sometimes a bit weird and used at your own risk]

Q – Dear Larry

My business partner screwed me over. He changed all the business documentation into his name and took over the business, leaving me in the cold with no job and no money. What can I do?  Paul

A – Dear Paul

This is such crap. I’ve heard this story time and time again. And when I have investigated, I find that no such thing really happened. The real way to describe the situation is not that your partner screwed you over, but that you were such an idiot that you allowed your partner to screw you over. Documentation does not miraculously get signed over. Was the paperwork in both your names to begin with? Did you sign documents without reading them? Did you hold regular partner meetings with an agenda? Did your partnership always feel equitable, representing risk and work ethic? Was it really a partnership?

Here’s what you do. Take responsibility. Look back at where you could have caught this and nipped it in the bud. Did you choose your partner correctly? (clearly not). Partnerships are about trust, relationships, responsibilities, and much more. Most of the situations I have come across such as yours have been devoid of one or more of the three elements mentioned above. In situations such as yours, my findings are that  the partnerships were not created on a foundation of trust, or trust was broken early on in the partnership; or the relationship was not maintained (Not necessarily  Buddy Buddy, but a minimum Partner Partner); and one or both of the partners never took responsibility for their role as a partner (regular meetings, checking the financials, managing staff etc.).

So reflect on your role in this stuff-up, make a decision whether you want to partner again or not, learn from your mistakes and jump back into the saddle.

 

Q – Dear Larry

Recently, one of my staff left my business and went to work for the opposition. What do I do? Roger – San Francisco

A – Dear Roger

I flippen hate that. That’s probably the worst part about being an entrepreneur. The feeling of betrayal makes one sick. And then there’s the feeling you have when your girlfriend leaves you for another guy. Is he better in bed? What did I do wrong. Ok, enough about me, lets get onto your issue.

The first thing to do is to ensure you have a fair restraint in place, this would at best preclude the person from operating in your industry for a decent period if they came from another industry, or was embedded deeply in your company strategy, and could find work in another industry (That sentence was too long, you probably need to read it again slowly). Another restraint would be in relation to your clients and your staff, this is more common. Ensure you have this in place. Learn from this.

Someone once told me, that if the person who left you was useless when they were with you, no miracle will happen to their personality in their new job, they are going to be useless there too. I personally stalk them and take much glee in them leaving the job they went to. (did I say that out aloud?). Then there is the person that left you that was fantastic. That sucks. But you’ll get over it. And PS  it will happen again so get used to it, its part of the entrepreneur deal.

 

Q – Dear Larry

I have invented a product that will revolutionize the energy world. I am concerned that if I show it to the big guys that they will steal the idea. I’m also afraid that if I get an investor that they will leave me with nothing. What do I do? Manfred – Iowa 

A – Dear Manfred

Manfred Manfred Manfred. Let’s say I believe you. Because thousands before you have said something similar but the idea they have come up with only “works” on a small scale with some dodgy data. But let’s say I do believe you.

I believe that ideas are worth very little. The ability to execute on ideas is valuable. So the person who can make an idea commercially viable is the winner. It’s not fair I know but it’s fact. If all you have is the idea then you really have very little. So the best solution for guys like you is to find a partner that an execute and make your idea commercially viable. Now that might just mean money (VC, Angel) or it might be manufacturing, or distribution, or marketing capacity. Either way you are going to lose a fair chunk of your equity, and I mean not fair chunk to you.

New ideas take time, expertise, networks and money to take to market. They are risky and untested and generally have a low rate of adoption. Now your idea might be different, It might take off immediately and save gazillions of dollars. but that does not matter. The truth is no one knows how successfully it will be adopted. The one with the ability to commercialize has all the power.

My advice to you is firstly to check, double check and triple check your idea a) works, b) is unique and c) works at scale. Secondly, go to an investor with a track record in energy. They do not have the ability to execute, so they pose less of a threat than a energy company, but they will have the experience and networks to determine if your idea is viable. If they are interested, then work with someone you trust, preferably a good commercial lawyer, to help you close the best deal possible. Expect to land up with a small percentage and a long time before you see any money. Alternatively sell the idea to them and walk away, and tell your grandkids the story of how it was you that invented that ubiquitous, cheap source of energy that everyone is now using.

 

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