Mantra of successful business relations: Forgive, forget and think about the common goal …
Posted by Ashish on May 17th, 2007
Lately I have been talking to a lot of people who are starting up or have started in the last few months. It’s always good to talk to people who have the courage to ‘move out of their comfort zone’ and do something creative. This is not to say that I don’t like to talk to people who are happy in their comfort zone 
One question that I almost always get asked is “How can I trust my clients, customers, business partners, lawyers, accountants, employees and who not?”.
That is a very valid question. And this is something everybody faces - and I can relate it with my experiences. But let me turn around the question and ask you - what option do you have other than to trust? When you are small, you neither have the bandwidth or resources to hire ‘experts’ or expensive lawyers for documenting everything. At the same time, for the lack of experience, it’s almost impossible to think about a list of situations that one could run into - and hence it’s rather foolishness to even attempt doing it in its entirety. But here are certain things that one should do:
- Spend money on the legal contracts: When you are small, it is very common to sign contracts without seeking legal opinions - as it helps save you a lot of money. Don’t do that - absolutely don’t do that. If you are signing a similar 2nd contract, it is still OK to not get it whetted by the lawyers but do engage the lawyers the first time you are creating a particular kind of contract. You wouldn’t realize the importance of it until you become a little bigger and then know the potential downsides of not doing that.
- Spend time and keep an eye on all the major aspects of business: It’s good to follow the policy of ‘Divide and conquer’ with different heads for different aspects of business. But have regular meetings with the different heads and open all books (including yours) for scrutiny by all major stakeholders from time to time.
- Create a Shareholders Agreement: This is probably much more crucial than what it seems initially. You could survive even if your biggest customer leaves you stranded / cheats you or your accountant did something to maximize their benefits. What will hurt the most is if you or your business partners lose trust in each other. Remember that we all are humans - there will be times when the misunderstandings will creep in. So, it’s important to create a shareholders’ agreement soon enough which exactly talks about what are the authorities of each person and the team as a whole. A good analogy is that if you keep the money lying on the floor with nobody watching, many people will turn ‘thief’ and steal but very few of them would actually do it if they know that somebody could be watching.
- Communicate regularly with the stakeholders, customers, team-members and others important for your business: Yeah - follow all processes, have the legal systems in place and sign the right contracts but there is nothing to replace the regular communication with all the parties involved. Most people wont do anything bad with somebody they really treat as their ‘friend’. Communicate with people and be their ‘friend’ and you will mostly be in good shape.
In spite of all this, trust people. As long as you exercise a bit of caution, you will be much better off by trusting people rather than spending your time and energy thinking about what can go wrong and who can do wrong. This is not to say that people will not cheat you - THEY WILL - most of the times unintentionally but sometimes (sad) intentionally. And if it happens, just increase the level of caution that you exercise but dont get too paranoid. Try your best to forgive and forget it and worry about the common long-term goal. But, yes, don’t hesitate in making your concerns very clear to the offending party and / or severing your ties if you absolutely cannot withstand what has happened. No loss will be as big as losing out when you become bigger.
Whatever you do, please remember that you should forgive me for being really irregular with blogging BUT dont forget even if you can’t necessarily find a common goal Instead, keep visiting the blog. 
I do intend to be regular, though not necessarily frequent.
May 17th, 2007 at 4:28 pm
A nice article specially the interesting part in the end
I think although you are telling to forgive and forget (and not become paranoid) but it is easier said than done. Forgive but remember might be a little better according to me since if once someone fools you its not ur fault but the second time the same person fools u then it is ur fault.
One question: When you grow and it starts becoming a little difficult to communicate with everyone then what? How do you keep tabs? I think this is when the organization hierarchy creeps in and the next level only does the job of keeping tab on the lower level. What are your thoughts on this?
May 17th, 2007 at 7:35 pm
Good to read your blog after such a long time .
May 17th, 2007 at 9:39 pm
Thank God! Finally You Blogged.
Hope to see you more in action.
May 18th, 2007 at 9:16 am
Dear Ashish,
I remember long time (probably a year) back, you have posed a question on your blog that when does an organization really cease to be a startup and become a small company. I think today you have found answer to your own question. One of the criteria for company being no longer startup is when its founder starts talking about contracts, lawyers, legal issues, trust issues, follow the policy and processes etc.
I assure you that your company is NO Longer Startup.
Let me ask a question here.
Isn’t the creative employee run away from processes, policies etc. to create his own business where he can work with his small team based on trust and where efficiency and talent is more important than customer contracts and legalities?
Here is how this cycle works:
Relationships based on trust –> Startup –> Efficiency –> Relationships based on legal contracts –> No longer startup –> No longer Efficient –> Creative people leave to form relationships based on trust –> Another Startup (cycle continues)
Google is one company I know (there are probably more) who was able to come out of this cycle and stayed efficient and startup-like (if that is a word).
Ashish, your next challenge will be to have all processes and policies in place and still be efficient. A difficult goal indeed. But still achievable. Best of Luck!
By the way I do enjoy your blog and it always motivates me to write. Thanks.
May 18th, 2007 at 12:12 pm
“what option do you have other than to trust?”
Have been thinking on the same lines recently and reached somewhat similar conclusion what you have said:
“In spite of all this, trust people. As long as you exercise a bit of caution, you will be much better off by trusting people rather than spending your time and energy thinking about what can go wrong and who can do wrong.”
Same thing coming from an more experienced entrepreneur gives confidence. And after all, isn’t this all, good or bad, also a learning experience as an entrepreneur ?
Good to see a new post after so long ‘hiring’ phase
May 20th, 2007 at 11:40 am
I totally agree with the views expressed here. Keeping legal aspects right doesn’t mean losing the startup character.
Good to read a post, to which I can relate to.
June 13th, 2007 at 4:41 pm
Mantra of a good & famous blogger-
Think. Write. Publish.
FREQUENTLY!!!
Now can you please blog something soon?
June 15th, 2007 at 11:42 pm
Indeed a fantastic post and upon some subtle issues. But I have a question here…If so many people keep themselves concerned over dealings and legal issues,dont you think that the creative and innovative part in oneself will be somewhat subdued? I always think that multi-tasking comes into picture here but isnt that too difficult?
June 21st, 2007 at 11:10 pm
No new post ? Write something.
June 27th, 2007 at 6:50 pm
I feel one has no option but to trust. Though you can try to be safe with legal contracts, it doesnt help much. Nice post though,the way you have put it in points is really good.
July 2nd, 2007 at 9:15 am
hi guys,
just wanted to let you’ll know that Business World magazine, has started a new blog on its web site on Entrepreneurship and Venture Capital, do feel free to post your thoughts, ideas, comments, there. thanks.
http://www.businessworld.in/component/option,com_jd-wp/Itemid,26/p,67/
cheers.
July 4th, 2007 at 10:02 pm
Write something new….
July 9th, 2007 at 5:38 pm
A nice article specially the interesting part in the end i came to know abt this site from diggindianews.com
July 9th, 2007 at 6:11 pm
You have got an interesting and informative blog, Ashish. Came to your site from diggindianews.com…. Good to read this post.
August 20th, 2007 at 10:27 pm
Interesting.
cheers,
Vaibhav
September 15th, 2007 at 1:47 pm
Nice read!. Your topic about needs more comments. I\’d like to spend me Saturday nights reading about run own business