How Communication Can Make or Break The Business

Twelve years ago, several friends of mine set out to build an Internet advertising company. Out of respect for their privacy, and their current endeavors, I have changed the names to protect the guilty.

"Mark" had grown up with "Doug" and "Jim". Both "Doug" and "Jim" were brothers. I was a mentor to Mark and really got him started in the IT industry. He took to it well and learned very quickly. He also had the charisma and drive necessary to succeed. We spent many hours discussing the potential of the Internet prior to the dot com boom. It turns out that those discussions planted the seeds for something much larger. As the dot com craze really began to develop, "Mark" remembered something I had told him years before: "One day, there will be enough people on the Internet, that advertising dollars with either make access free, or they will find a way to pay people for advertising space." It turns out that my prediction was true, and with limited development knowledge, Mark enlisted the support of "Eric", an experienced developer/Unix Admin as well as his two childhood friends. Together they built an incentive based internet banner distribution system that would actually offer people money for allowing their banner service to use "screen real estate" on their desktop. The screen real estate would serve Internet Banner advertisements and the incentive was pennies on each advertising detail that was made with each advertiser. For example, if the advertiser was paying 10 cents for the impression, the person providing the real estate would get 2 cents and the remaining 8 cents would go to the advertising network. The model was interesting and worked well for a while. In fact, a number of other competitors had jumped into the space, but they made a critical mistake: They took on too much debt and mismanaged their funds. Early on, I had advised Mark not to take on investors, but to grow slowly and with their own funds for as long as possible. My advice proved sound, as they survived the dot com crash, and leveraged their financial success into the next realm of Internet gold mining, namely key word advertising on search engines. Things were looking well from the outside, as the company was running media campaigns, sponsoring special events, and the money was rolling in hand over fist. Unfortunately, there was a huge internal problem that was festering. Ambivalence between the partners was spreading like a Cancer. The communications mechanism the partners had in place was not effective for handling the problem and the matter got worse. Partners began pointing fingers at one another and accusing each other of not pulling their share. They collectively lost sight of the team effort and lost sight of the fact that there is no I in the word team. More importantly, lifelong friendships, and a family relationship were severed as a result of greed, law suits, mistrust and deception. The promising company decayed from within because they lacked the right process and people to help them through this challenge. In addition to destroying friendships, family bonds, and business relationships, the legal costs involved were astronomical. The problem here was never one of technology. The problem was people and process, or more simply and effective communications mechanism.

Now Mark and Eric have started up their own endeavor and appear to be successful with it. Doug now runs the old business and I have no idea what his brother Jim is doing. Doug recently called me to invite me to his wedding. He told me he feels bad about what happened and wishes the others would realize that "business is business and friendship is friendship". He misses his friends and his brother. Yet, he tells me he is happier now than he was before. In light of all the legal battles and ruined relationships, I have to wonder about his happiness claim. From my perspective, with the right process and people to guide them through the difficult periods, the four of them could still be accomplishing great things together. Anybody can make money. Managing relationships properly is an art. So is knowing when to partner. At Russell Nomer consulting, we can assist with vetting out these sorts of situations. The value we can bring in this sort of engagement is priceless.