Shark Eats Entrepreneur Alive(blog.fairsoftware.net)
blog.fairsoftware.net
Shark Eats Entrepreneur Alive
http://blog.fairsoftware.net/2009/10/08/shark-eats-entrepreneur-alive/
22 comments
The naivety of some people is just scary.
If you are being approached always be on your guard.
An 'investor' (I use the word lightly here ;) ) that wants to pressure you to do a deal is afraid you'll wise up, find something or that you'll back out. So, help them a bit and back out. On the spot.
A good relationship can be built slowly if there appears to be time pressure you will likely make a decision that's not to your advantage. Good decisions are made from a position of strength. Time pressure erodes that strength.
If you are being approached always be on your guard.
An 'investor' (I use the word lightly here ;) ) that wants to pressure you to do a deal is afraid you'll wise up, find something or that you'll back out. So, help them a bit and back out. On the spot.
A good relationship can be built slowly if there appears to be time pressure you will likely make a decision that's not to your advantage. Good decisions are made from a position of strength. Time pressure erodes that strength.
In general, it's solid advice to always refuse solicitors and not make decisions under time pressure.
If someone will not talk to your co-founder, that is a huge red flag.
Either they are taking advantage of you, and know the co-founder will catch on. Or they have issues with the co-founder, which tells you that the moment conflict arises, they will shut down communications and frustrate you.
A lack of communication is an immediate deal-breaker on any of my projects.
Either they are taking advantage of you, and know the co-founder will catch on. Or they have issues with the co-founder, which tells you that the moment conflict arises, they will shut down communications and frustrate you.
A lack of communication is an immediate deal-breaker on any of my projects.
I expected something completely different based on the title...
"The founder of XYZ, reportedly missing since last friday was found alive when some fishermen off the coast of ABC cut open the belly of a freshly captured shark. Along with the founder, the fisherman also found some kittens, a few pieces of string and a whiteboard marker."
He wants to put $xxK of his money into his developers in [third world country]...
That is equal parts terrifying and awe-inspiring for its sheer brazenness.
That is equal parts terrifying and awe-inspiring for its sheer brazenness.
It's easy to imagine how it could work, though. "I have programmers ready and waiting to work on your idea..."
Programmers are standing by, please commit now!! If you commit within the next 24 hours, I will even take 10% stake for no extra charge. As a bonus offer we will even get rid of your co-founder.
What are you waiting for, commit now!!
-for the sense of humor challenged, the above is a joke-
-for the sense of humor challenged, the above is a joke-
Somehow, "considering giving up equity in exchange for services that add only dubious value" equates to "being eating alive."
Then again, I suppose fewer people would read a post titled "Entrepeneur considers letting shark bite"...
Then again, I suppose fewer people would read a post titled "Entrepeneur considers letting shark bite"...
Do you not agree that if the entrepreneur took the deal, it would kill his company? If so, a kill, in shark language, is appropriately described by eaten alive.
He could give away 10% equity in exchange for absolutely nothing, and probably not die. He could, likewise, give away 10% equity in exchange for some offshore developers building something completely random, look at it, decide not to actually use it, and still probably not die.
Now, actually deciding to replace the active codebase with something that's terrible could kill his company, but that's down the road a bit.
Now, actually deciding to replace the active codebase with something that's terrible could kill his company, but that's down the road a bit.
Keep in mind that taking the deal also includes getting rid of his technical co-founder.
Rewrite the site from scratch. No more technical resources. Sounds like a pretty good startup-killer to me.
I agree the 10% part is not the problem. It's the strategic change of direction into a dead-end that is.
Rewrite the site from scratch. No more technical resources. Sounds like a pretty good startup-killer to me.
I agree the 10% part is not the problem. It's the strategic change of direction into a dead-end that is.
I do not agree because I don't know how 10% stake and "third world" developers may kill. I'm not saying they can't, just being curious.
You don't know how transferring your development offshore to a group that reports to an outside investor can kill a company?
Just asking for clarification here... Honestly sounds like a What The (Cluster) Fuck in the making...
Just asking for clarification here... Honestly sounds like a What The (Cluster) Fuck in the making...
It's not about the stake or the developers. The whole deal sounds fishy. Why won't the investor provide references? Why should the decision be made right away (next day or two)? Why shouldn't this person publicize the site?
When it looks too good (or too suspicious) to be true, it probably is.
When it looks too good (or too suspicious) to be true, it probably is.
10% of the company owned by a random con man would be a big red flag to any real investors in future funding rounds.
The simple fact that the entrepreneur knew to ask the question shows that he already knew the answer. He wants to go with his gut and reject this; he's just looking for a little vote of confidence.
If were the tech co-founder I'd dump this guy immediately. I presume he is in a biz-dev position - if he's too dumb or indecisive for this, he has no business being in... uh, business.
That, plus the fact that he is basically indecisive about selling his co-founder down the river or not.
Run like hell, Say no firmly and forever.
Would there be any legal recourse for the technical co-founder in this case?
They will employ every high-pressure tactic in the book and then some that are considered crimes against Humanity and in more civilized societies are punishable by death. You will be able to observe a sequence of increasingly confrontational salespeople, male and female, pretty and ugly, that seem hell-bent on selling you some nice time-share in a chain of resorts. You will also see others succumb and be applauded for making a really stupid business decision.
I advise you to do it as many times as it takes for you to master the game. You may consider yourself ready when you consistently beat up the final boss and get your prize (usually tickets for some tourist attraction). I particularly like to play rude paying more attention to the food than to the salesperson, interrupting and leaving the table to get more food.
Do it a couple times a year, just for the kick of it.
It's like an immersive videogame.
OTOH, your faith on Humanity may end up a bit scratched. That's a small price to pay for this kind of enlightenment.