Editor’s Note: This post was originally published on Seattle 2.0, and imported to GeekWire as part of our acquisition of Seattle 2.0 and its archival content. For more background, see this post.
By Alyssa Royse
I’m never sure whether trust plays too great or too small arole in our business relationships. That’s likely because it means differentthings to different people, which is part of the problem. But, at the end ofthe day, having unprotected business isn’t a whole lot smarter than havingunprotected sex. I won’t have sex without condoms, and I won’t do businesswithout contracts.
What is the role of trust in our business relationships? Forme, trust isn’t just one monolithic thing that applies equally to all aspectsof a business venture. I assume that if two (or more) people are to the pointof discussing contracts about a business venture, there are already severallayers of trust.
- They all trust the idea enough that they want to pursue it.They have some degree of shared vision and energy that has brought them to thismoment, and they “believe” in it, whether they call it trust or not. By thispoint, the venture itself is it’s own emotional entity, worthy of it’s owntrust and value and concern separate from the players and other personalrelationships.
- They all trust each other’s skills and dedication enoughthat they want to help grow the venture together. They think they can do it.That trust is implicit in the momentum that got them this far.
- They all believe – as all entrepreneurs do – that this isgoing to work, and that everyone is going to be as committed as they are to theventure, and to their own happiness. And this is where things start to fallapart.
Unless you are doing business with Mother Theresa, then whoever you aredoing business with is likely more concerned with their own happiness than withyours. It’s human nature, and there is nothing wrong with that. This is themoment at which you must be responsible for saying, “this is so exciting, doyou have a condom?”
I have literally had someone look at me and say, “I wont’ dobusiness with someone who doesn’t trust me. Why do you NEED a contract?” I find that question both stupid and insulting, butI’ll answer it, and see what we can learn.
- I would not do business with someone who was afraid tohave their good intentions codified. To me, that means they are already tryingto wiggle out of the “deal.” (I would not have sex with someone who wasn’tprepared to be responsible for his actions.)
- I would not do business with someone who was unwilling tohonor my own need and right to feel safe and protected. (I would not have sexwith someone who didn’t mind risking my life or my future for hisgratification.)
- I think that the process of codifying a businessrelationship is very useful. It helps everyone involved clarify their intent,expectations, process and starts the business off on a foundation of mutualunderstanding. (I would not have sex with someone with whom I didn’t feelcomfortable saying, “you need to wrap that rascal because this is only aboutsex, I have no intention of dying for you or raising your progeny.”)
- I believe that sometimes the best-laid plans go wildlyawry, and a contract can provide a baseline for rectifying the situation in aless emotional manner. (Condoms break, at least you know I wasn’t trying to getpregnant.)
When is the right time to whip out a contract? We’re alldifferent on this one, I tend to wait until the last minute. I’m a big fan ofemotional and intellectual foreplay, in all arenas. But I start discussingintent fairly early.
- When you first start discussing an idea, just run freewith it. Brainstorm, have meetings over and over again, email ideas, see whathappens. This is the fun and flirty stage, during which you find out if you’recompatible in any real way. Ideas, even good ones, are a dime a dozen, play with them freely.
- Once you realize that you actually want to do thistogether, say so. Even these conversations can go on for a protracted period oftime, and that’s okay. There’s rarely any reason to rush headlong into thisunion. Discuss it and be clear about your intentions and desires. “I think weshould be co-founders of this, and after we reach X milestone, we’ll hire Ypeople and…..” Do you need a contract at this point? I don’t, but other peoplemay be different. (I do, however, like a nice long email thread in which these things are discussed in writing.)
- Once you get to the point that assets of any sort arechanging hands and working towards the fruition of the union, then I’d getcontracts in line. Be damned good and clear about what your intentions are, andget it written down. And just because the other party doesn’t want to, doesn’tmean that you shouldn’t be proactive and protect yourself. If you are handingover assets of any sort – whether it’s money, IP, work product – you need toknow that you are putting them into a union in which your interests areprotected.
To me, that is the ultimate form of trust. It means that youtrust the idea, trust the chemistry, trust the people, and trust that thefuture is going to be what you make it. You trust it all enough that you wantto be totally prepared to do it as best you can. You even trust the peopleenough that you aren’t worried about the could-be-scary process of negotiating.That’s a lot of trust.
But it would be stupid not to have contracts to protect yourinterests, no matter how you feel about the people or the product. It would bejust as stupid to have unprotected sex with someone just because you wereafraid they’d think less of you if you told them that you were smart enough toprotect yourself and still get what you want.
Trust is great, but it’s not worth getting screwed for.
