March 30, 2016
Makers and Traders
Whenever a prospective client comes to me for legal assistance with their start-up, often they fall into one of two categories of people: makers or traders. Makers know what the business does; whereas traders tend to know more about the business of what the business does. This is an important distinction to make. Nevertheless, I often meet people who are trying to launch a start-up, and only know either what they do or the business of what they do but not both.
Both makers and traders are necessary for a start-up to be successful; rarely will a sole proprietor be able to fill both roles, which is one reason partnerships are so desirable. Often, one partner knows how to produce and provide goods or services, while the other knows how to reach customers, establish channels of distribution, collect and process payments, etc.
Of course, even business savvy traders can’t do it all, which is where professionals, like lawyers and accountants, can help round out your leadership team.
Meet Your Match
In business, most people need to be on the buddy system. After all, it’s dangerous to go alone! Take help.
The Maker-Trader Principle, as first stated by me, is: “You can do what you do, or you can do the business of what you do, but most people cannot do both well.”
Examine your role in your start-up. Are you a maker or a trader? Also, if you believe you are an exception to the Maker-Trader Principle, can you honestly justify your belief to an objective third party?
If you are like most people, you’re going to need to connect to either a maker or a trader–whichever you are not–if you want to successfully launch a start-up. So, dive in to LinkedIn, look at your connections; go to networking events; put out feelers to your friends and family; and generally make a decent effort to establish a professional relationship with someone who believes in what you’re trying to do and has the skills you need.
Found that person? Congratulations, you’ve just successfully completed your start-up’s first team-building exercise.
You Need a Deep Bench
Following the Maker-Trader Principle is just the first step. The next logical step is rounding out your team. As your start-up’s founder, you’re an important (and usually essential) part of the team, like a team captain. Nevertheless, you need a deep bench. Good leaders surround themselves with other leaders, other rock stars–not just meek followers. These leaders must include the members of your BAIL Team.
Every business needs a connection in the Banking, Accounting, Insurance, and Legal industries. When you can’t (afford to) bring those connections, those professionals in-house, you should, at least, make sure you have established an external professional relationship with them.
As an attorney, I can’t speak very much to the other three industries, but I know the “L” in your BAIL Team can and should include Outside General Counsel. This important player on your team can help you spot and address legal risks before they become legal problems. As the Small Business and Start-ups Aspect of Practice Leader for the National Center for Preventive Law, I advocate for the use of preventive legal techniques to keep businesses out of expensive litigation. You definitely want someone coaching you on the use of preventive law, and I’m not talkin’ about some guy on Avvo answering your questions.
The biggest mistake I see start-up launchers making is trying to go it alone, to bootstrap, to do things on the cheap. They want to build a business, to make a fortune, to get on Shark Tank, or whatever. They won’t commit to anything, though. They don’t want to risk their own capital. They don’t want to invest–not even in the team they need in order to get things done. They flake out at the last minute, instead of attending meetings.
They lack the courage of their convictions. That is why they fail.
Business is not for the faint of heart, and if you try to go it alone, you will get chewed up and spit out. The best thing you can do to ensure your start-up’s survival is get some preventive protection. That starts with building the right team, with making and keeping commitments, with taking risks. If you can’t do that, stop wasting everyone’s time, including your own, and go back to your nine-to-five job. #ToughLove
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