Becoming a Wealthy Entrepreneur
Posted 26th April 2014 at 12:22 PM by imarkedy
In our previous post on becoming a wealthy entrepreneur, I explained an experience I had some years ago which, although things didn’t turn out quite as I’d hoped, taught many lessons. When starting my own business, learned at Banneker, I’ve always believed “they who don’t learn from the good and bad will never experience success as it was meant to be”. Continuing this series, we know arrive at four signs that either you or another partner may need to part ways;
1. At key moments, their behavior is both erratic and destructive
There are very few who haven’t witnessed a presidential debate. Typically, one candidate is much more eloquent in the area of speech than the other. Such eloquence is often confused for one having greater vision when nothing is further from true. Our last two Presidents, George W. Bush and Barack H. Obama demonstrate this principle well. When building a business, never mistake a charismatic leader for a competent one! As was said in the previous post, a charismatic leader, such as Derrick M. Holmes, my former partner at Banneker Watches, may have an awesome, far reaching vision but this hardly qualifies them to carry it forward. Charismatic leaders, almost without exception, are not as competent at leading as they are speaking not to mention what matters most; getting things done which can turn a start-up into a profit earning business.
Let’s face it, these sorts of partners are ‘idea people’ and can crank great concepts out like few others. It is this ability which attracts a following. However and as was pointed out with Derrick, they rarely listen to wise, more competent counsel due to hubris and believing they always know what is best. When I think back on my time at Banneker, potential of the brand and many things which happened, the only reason you may not have heard of Derrick is due to his erratic behavior and failure to heed wise counsel. For instance, he formed a partnership with DARE America to manufacture and distribute watches which every youth enrolled in this drug prevention program, nationwide, would receive. Unfortunately, the deal failed because Derrick was warned not to make an appearance in a certain place, did so anyway and a group of locals called DARE America and complained about Derrick’s presence. As the catalyst for the deal, Derrick didn’t care what anyone thought, made a piss poor decision and the entire company suffered.
2. The ‘drive to succeed’ must never replace the ‘end in mind’
In a perfect world, these would go ‘hand in hand’ but one of the greatest strengths of the entrepreneurial mind-set is also its’ most vexing weakness; enjoying the journey more than the destination. Staying with our example; my wife and I went out to eat with Derrick and a lady friend of his one evening. His friend said “the time comes when you (Derrick) have to be satisfied with something”. Immediately, Derrick responded; “It is the chase that makes life worth living. If you aren’t chasing, you really aren’t living”. Every decision he made was based on this errant philosophy. Is saving money to purchase a home more satisfying than moving in? Further; with charismatic partners; money can’t be used to entice them into more effective strategy as much as their sense of self-importance. These sorts well understand money is required for ventures but this will always, without exception, take a back seat to an often over-developed sense of prestige. When the truth is told, Derrick was deafly afraid of being ‘burned’ again, as with DARE and each time success was at his door-step, he made the most awful decisions and self-sabotage had become a way of life for my friend.
There is a hard truth any partnership must face; one of the founders will hold the majority interest and thus own the right to make final decisions on matters important to growth. At Banneker, Derrick was that person and as a minority shareholder, I had little influence over his decisions. When forming a partnership, legally, more than any other decision, this must be carefully considered. We’ve all read about companies which are involved in some sort of financial scandal. Typically, the CEO (or majority shareholder) holds enormous power, lacks appropriate amounts of accountability and therefore, runs amuck causing damage. Whether the majority shareholder or not, without accountability and legal mechanisms to dismiss even the founder, you will arrive at a company destroying impasse.
3. Make clear your limitations and integrity upfront
When chasing the dream and hoping to realize a long sought after reward, compromise, of some sort, enters into the process. After all and as most charismatic leaders believe; ‘the end(s) justify the means’. Partnership agreements are a great thing and should spell out roles and responsibilities of all founding partners but there are many things which won’t be written but just as necessary for stability. To begin with, integrity! Derrick always said “my word is my bond” but his actions said something much different. A more correct statement would’ve been “I will honor my word as long as there is something in it for me personally”.
For instance, he was very tenacious when funding was imminent and took care of the details like few others. After funding was received, however, Derrick had little interest in honoring agreements (his word and bond) with investors. On more than one occasion, he solicited my participation in such dishonorable conduct but without exception, I refused and the more he did, the more imminent my departure became.
Derrick held the ability to make me quite wealthy but I don’t believe, ever, ‘the end(s) justify the means’. Anyone questioning this truth should research, in-depth’, the Kennedy Family before one of their own, John F. Kennedy, became President. The source of their very public family tragedies may surprise. If you remember nothing else written here, remember this; “you will reap what you sow” in both business and life.
4. Be ready to walk-away no matter the cost
Just because your motives are pure, doesn’t mean those of others are. During my time with Banneker, I had unfettered access to documents, paperwork and those involved previous to my arrival. Although these people were diverse, there was one-thing all shared in common; their belief that Derrick either didn’t have the ability to ‘get it done’ or was serious about doing so caused their departure. Although I would never say past failures are key to determining future success; I would offer that a person’s past behavior is indicative of their future intentions absent a life altering paradigm shift! What’s the point? Partners and employees are striving for the same thing or they are working against each other. True is the saying “You can’t serve two masters because you will either love the one and hate the other or hate the other and love the one”.
By year three, I knew it was time for me to depart both Derrick and Banneker for reasons listed in the previous post. I owned a minority stake in the company which I’d help build but my CEO had no other interest than receiving money and not making good on promises to either partners or investors. Since my departure more seven years ago, things have moved along but Banneker is like the ‘neighborhood grocery store’ when, and as watches are concerned, it should’ve been a national chain. Which of these will be your fate?
Brian D. Dale
Curious.com
1. At key moments, their behavior is both erratic and destructive
There are very few who haven’t witnessed a presidential debate. Typically, one candidate is much more eloquent in the area of speech than the other. Such eloquence is often confused for one having greater vision when nothing is further from true. Our last two Presidents, George W. Bush and Barack H. Obama demonstrate this principle well. When building a business, never mistake a charismatic leader for a competent one! As was said in the previous post, a charismatic leader, such as Derrick M. Holmes, my former partner at Banneker Watches, may have an awesome, far reaching vision but this hardly qualifies them to carry it forward. Charismatic leaders, almost without exception, are not as competent at leading as they are speaking not to mention what matters most; getting things done which can turn a start-up into a profit earning business.
Let’s face it, these sorts of partners are ‘idea people’ and can crank great concepts out like few others. It is this ability which attracts a following. However and as was pointed out with Derrick, they rarely listen to wise, more competent counsel due to hubris and believing they always know what is best. When I think back on my time at Banneker, potential of the brand and many things which happened, the only reason you may not have heard of Derrick is due to his erratic behavior and failure to heed wise counsel. For instance, he formed a partnership with DARE America to manufacture and distribute watches which every youth enrolled in this drug prevention program, nationwide, would receive. Unfortunately, the deal failed because Derrick was warned not to make an appearance in a certain place, did so anyway and a group of locals called DARE America and complained about Derrick’s presence. As the catalyst for the deal, Derrick didn’t care what anyone thought, made a piss poor decision and the entire company suffered.
2. The ‘drive to succeed’ must never replace the ‘end in mind’
In a perfect world, these would go ‘hand in hand’ but one of the greatest strengths of the entrepreneurial mind-set is also its’ most vexing weakness; enjoying the journey more than the destination. Staying with our example; my wife and I went out to eat with Derrick and a lady friend of his one evening. His friend said “the time comes when you (Derrick) have to be satisfied with something”. Immediately, Derrick responded; “It is the chase that makes life worth living. If you aren’t chasing, you really aren’t living”. Every decision he made was based on this errant philosophy. Is saving money to purchase a home more satisfying than moving in? Further; with charismatic partners; money can’t be used to entice them into more effective strategy as much as their sense of self-importance. These sorts well understand money is required for ventures but this will always, without exception, take a back seat to an often over-developed sense of prestige. When the truth is told, Derrick was deafly afraid of being ‘burned’ again, as with DARE and each time success was at his door-step, he made the most awful decisions and self-sabotage had become a way of life for my friend.
There is a hard truth any partnership must face; one of the founders will hold the majority interest and thus own the right to make final decisions on matters important to growth. At Banneker, Derrick was that person and as a minority shareholder, I had little influence over his decisions. When forming a partnership, legally, more than any other decision, this must be carefully considered. We’ve all read about companies which are involved in some sort of financial scandal. Typically, the CEO (or majority shareholder) holds enormous power, lacks appropriate amounts of accountability and therefore, runs amuck causing damage. Whether the majority shareholder or not, without accountability and legal mechanisms to dismiss even the founder, you will arrive at a company destroying impasse.
3. Make clear your limitations and integrity upfront
When chasing the dream and hoping to realize a long sought after reward, compromise, of some sort, enters into the process. After all and as most charismatic leaders believe; ‘the end(s) justify the means’. Partnership agreements are a great thing and should spell out roles and responsibilities of all founding partners but there are many things which won’t be written but just as necessary for stability. To begin with, integrity! Derrick always said “my word is my bond” but his actions said something much different. A more correct statement would’ve been “I will honor my word as long as there is something in it for me personally”.
For instance, he was very tenacious when funding was imminent and took care of the details like few others. After funding was received, however, Derrick had little interest in honoring agreements (his word and bond) with investors. On more than one occasion, he solicited my participation in such dishonorable conduct but without exception, I refused and the more he did, the more imminent my departure became.
Derrick held the ability to make me quite wealthy but I don’t believe, ever, ‘the end(s) justify the means’. Anyone questioning this truth should research, in-depth’, the Kennedy Family before one of their own, John F. Kennedy, became President. The source of their very public family tragedies may surprise. If you remember nothing else written here, remember this; “you will reap what you sow” in both business and life.
4. Be ready to walk-away no matter the cost
Just because your motives are pure, doesn’t mean those of others are. During my time with Banneker, I had unfettered access to documents, paperwork and those involved previous to my arrival. Although these people were diverse, there was one-thing all shared in common; their belief that Derrick either didn’t have the ability to ‘get it done’ or was serious about doing so caused their departure. Although I would never say past failures are key to determining future success; I would offer that a person’s past behavior is indicative of their future intentions absent a life altering paradigm shift! What’s the point? Partners and employees are striving for the same thing or they are working against each other. True is the saying “You can’t serve two masters because you will either love the one and hate the other or hate the other and love the one”.
By year three, I knew it was time for me to depart both Derrick and Banneker for reasons listed in the previous post. I owned a minority stake in the company which I’d help build but my CEO had no other interest than receiving money and not making good on promises to either partners or investors. Since my departure more seven years ago, things have moved along but Banneker is like the ‘neighborhood grocery store’ when, and as watches are concerned, it should’ve been a national chain. Which of these will be your fate?
Brian D. Dale
Curious.com
