Our Business is a Relationship Business

0:00 Our business is a relationship business. And when I say our business, I mean both investors and entrepreneurs. And I want to share some things that I think are a little counterintuitive, but will help you build better relationships across your business, especially between entrepreneurs and investors. You see, in my very first business, it was a custom software business. We wrote network database applications on a platform called MS-DOS. Some of you may never have even heard of it. It was the original business.

0:30 software platform, the original operating system for the PC. And a new product came out called

0:36 Windows. And Windows was this new fancy cool thing, but it was horrible. It was unstable. It was slow.

0:45 It was not fit for building business applications. And we were building real business applications.

0:51 Yet something started to happen. My developers started to look for other jobs because they

0:56 wanted to work in the new technology. And no matter how much I tried to convince them that MS-DOS was

1:01 the way to go, it was the best solution then, they weren't convinced. And I was worried I was going to

1:07 lose them. And then we had an aha moment. And what we did was we ended up sending them to seminars and

1:13 teaching them about programming in Windows and programming in an object-oriented language called

1:17 Smalltalk. And it was then when they felt like they were no longer being trapped. You see, if we were

1:24 only working in MS-DOS, they felt like they were in a dead-end job and they had to go get a new one.

1:30 But when they continued to learn about new technologies, then they felt like they could

1:35 leave any time. The longer they stayed with us, the more marketable they would be, and they stayed.

1:40 It's kind of counterintuitive. You may have experienced this personally with software.

1:46 Imagine a piece of software that you're using that feels like a dead-end product. They're not

1:51 enhancing it, they're not moving forward. You've got to get off that product and move on to the

1:55 next thing. But they could do some things to change that perspective. Imagine if they allow

2:00 you to download your data so that you own your data. Now you feel less trapped. Imagine if they

2:06 open source the source code so that you feel like you could actually take the code and modify it if

2:11 you need it. You feel less trapped. In both those cases, you're more likely to stay with that product

2:16 longer as an investor i feel very similarly there's some things that are counterintuitive

2:23 most people think they want to they want to show the bright shiny side to the investor they want

2:28 to talk about the good stuff but the reality is i want the bad news early i want to be the first call

2:36 when something is going wrong i want to know the problems in the companies we invest in

2:41 because I can help them fix it and I know that there aren't skeletons in the closet.

2:47 It's counterintuitive. Share the bad stuff with your investors. So the next time you're thinking

2:53 about whether you should take an action or not, think about the long-term implications

2:59 of your relationship and make sure that you take the path that will make it stronger in the long run.