Partner Or Employee With Extra Steps?

This morning I saw a post by Paul O’Brien titled “A VC is asking 6% for acting as an advisor…” – My first thought, that is some b******t – O’Brien agreed. His post is well worth reading, and it lead me down another thought pathway.

When you give out a lot of equity, you are handing away control!

You can give someone so much equity, that they should be a partner and should behave like a partner. But sometimes they just end up as an employee who is very hard to fire. I’ve had this problem a few times in my businesses, and have seen it happen even in true startups.

Let me explain, by “true startup”, I mean, a company that has funding from VC’s, has a board, is expected to trade at a multiple of revenue – not EBITDA – and is creating a product. Those bootstrapping, and starting service companies are entrepreneurs too, But I’m using this, limited definition to make a point.

I’ve never been the founder of a true startup. I have been part of successful (and unsuccessful) investor pitches. I’ve done product design for failed startups, held marketing jobs at successful ones, been on teams who made VC’s “good”, and in running a digital ad agency I’ve worked with all sorts of startup companies.

But, I’ve never been the founder of something that had a board of five, where two members are investors, two members are founders and all parties agreed on the swing person, in the fifth seat. That is the typical structure of an early startup board. An important setup, because it gives the founders autonomy, but lets investors have enough control to protect their early investment. It also means, a founder can be fired, as can a non founder with substantial (vested or scheduled) equity.

In the past, my “founder title” has been limited to services companies. Some grew to be larger than myself, some were just a way to bill for consulting – a term I now try to avoid. But sometimes when I’ve added a “partner” without a board, I’ve created a nightmare scenario.

If you have an employee who is not doing their job, you talk with them about it, and if need be you fire them. The perhaps overly ’80’s action movie saying is “Lead, follow, or stay out of the way”. With a partner, often it takes more steps to fire them, without a board those steps are often unclear, or costly.

Scenario: You and a partner run a small services business, with revenue from clients. Your partner has taken to working less, and their work product is of poorer quality. You cannot just fire your partner, and since you don’t even have a board to go to, you are in a marriage that no longer works. Some options exist, but many have a possibility of lawsuits. The most likely case is you have to buy our your partner for a multiple of EBITDA. This is a rock and a hard place.

I recently had an amicable parting of the ways with a former partner in Push ROI. Part of the reason is that the company is pivoting away from service and towards SaaS. But even with a non hostile breakup, getting all accounts turned over, and names off of everything takes time, under even the best case scenario. If you have to deal with animosity, and even litigation it may just be faster to start a new firm.

Giving a VC 6% is crazy, and as O’Brien said,

“A VC would warn you of how bad an idea it is to allocate so much [to] anyone who isn’t full time.”

While I do think you can have a non full timer who can justify 6%, on a vesting schedule. My statement assumes that person is highly motivated, and is actually committed to doing things to increase the multiple of everyone’s equity.

A truly terrible scenario is when you have a party who is “full time” but isn’t really working. Someone who doesn’t share in the vision for the firm and who’s commitments are lip service at best. When someone says they are “all in” on a project right before signing a funding round that will give them a solid salary, that means almost nothing. It’s the people who are still “all in” when they find out the investor’s terms are unacceptable and you’re passing on this money, that earn being a partner.

Their is always a time to leave a sinking ship, don’t commit to the Titanic or WeWork. I mean it when I say, setting metrics that allow for failure is as important as defining success. But you don’t want a fairweather partner eather.

A partner in any business, is the person who will be sweating it out with you, when you’re trying to make payroll. If you don’t make the payroll, you’ll lose employees, but if you lose a partner when they don’t get the check they expected, they were a hard to fire employee.

Header Image: “Lighter” by jacunningham

Why I Stopped Calling Myself A Consultant

When someone asked what my job was, I used to tell them I was a “Consultant”. This was an accurate title. I worked with companies, largely on digital marketing, video, and product planning. I’ve stopped using the title, however, and should have given it up sooner.

A few years ago, a client told me I wasn’t a “consultant” because I was doing work. That may or may not have been true, but I should have changed my branding at that time. I kept the title because, to me, taking a consultative approach meant acting like a doctor.

If someone goes to a doctor, they don’t just say “give me chemo”. Good, heck, even mediocre doctors diagnose patients and give them possible treatment options. My goal was in separating myself from the service provider whose proverbial service hammer causes everything to look like a nail.

Yes, if someone called me and said they wanted YouTube marketing, I was always happy to provide the service. But what I aspired to be was someone a company could call when they needed to know what services they should use.

The part of Miracle on 34th Street when the Macy’s Santa Claus is sending people to Gimbels rubbed off on me. An aspect of my career I’m proudest of is how many times I told someone they didn’t need a service they called me about. I felt the consultant moniker was the best way to convey the message of what I aspired to be professionally.

The word consultant has taken a hit recently with people on YouTube selling classes to teach everyone how to be a “consultant”. But honestly, it was never the best part of the business world. Even with all my analogies, appealing to authority of medical professionals, Kris Kringle and classic films, my experiences with consultants have been largely negative.

Often, I’ve worked on projects with a “consultant” who adds no real value and injects themselves into operations in ways that even hinder success. I joke that I will someday write a satirical book called “Sandbagging with a Smile: The Guide to Appearing Important by Forcing Everyone to Play a Game of Telephone.”

Here’s an example of the bad side of consulting behavior. Once, I’d spent a few months designing and documenting this product and eventually, I needed to hire a developer. I didn’t need design, or product management, just a programer. When I asked around for introductions, my mind was blown by how many non-developers not only wouldn’t just make intros, but wanted me to hire them to manage the developer.

I was so aware of the parasitic folks in consulting, that my branding at one point was that I was a “real consultant” not someone who’s only skillset was outsourcing work at a markup and holding account logins hostage. Basically, the same marketing play of used car lots, “used car salespeople are bad, but we’re different.” I should have given up the title sooner.

I’m still not sure what to call myself. I’ve used terms like “digital strategist” and “growth hacker” (I really went after the growth hacker branding) but those terms are unclear. Someday, I’ll figure out my own branding.

Header Image: Miracle on 34th Street

Why I Don’t Sign NDAs, Mostly

As a general rule, I don’t sign NDAs; meaning non-disclosure agreements, because as a general rule, NDAs are BS, meaning b******t. Here’s the thing, NDAs serve a narrow function. Enforcing confidentiality when no other legal structure would require it. It’s why you don’t need Lawyers or medical personnel to sign an NDA. You also don’t need an NDA to prevent the disclosure of information that would otherwise be a crime. 

NDAs are for trade secrets, and times someone’s work for hire needs to be treated as a trade secret. Someone working on new technology, or being hired to ghostwrite a book that they can never acknowledge having written. 

Oh, NDAs also work well when a company wants a legal tool to bully former contractors and employees if the need arises. The tobacco industry famously used NDAs as a legal threat towards associates to prevent them from testifying about known health risks associated with smoking. 

Frivolous Lawsuits Are Not Fun

When everyone is honest and above board, NDAs best serve all parties when they are specifically defined. For an employer, a clear and precise agreement is more likely to result in successful court rulings, should lawsuits occur. The benefit to employees is a lower likelihood of being sued frivolously or bullied with threats of erroneous legal action.

The confidential definition of an NDA being too broad isn’t favorable to a company in court.  However, even when fighting a bad, non-specific NDA, when you have clear defenses around publicly and priorly known information. It’s a beating to be on the receiving end of a lawsuit. Basically, being sued even if you have a strong case isn’t fun. 

I have some faith in humanity and believe most NDAs aren’t required with malicious intentions. My experience around NDAs is mostly with people who are playing business. People having nothing specific to protect, and without money to put up much of a fight in court. Still, why would I risk anything, under the assumption someone is being honest. Or will continue to be honest. Or won’t go crazy the day I win the lottery because they mentioned a method of picking numbers while I was working with them. 

I won’t sign most NDAs. However, I will sign some. I even have one in the Scope of Work I use for most of my life as a service provider.

The Five Criteria of NDAs I’ll Sign

1. I’m getting paid, highly likely to be paid, or really interested; This should go without saying. Don’t create legal agreements for the sake of having legal agreements.

2. “Confidential” is actually confidential, is defined as such, and is not trying to protect info so obvious from public records that it’s equivalent to a 4-year-old whispering a secret. 

The sentence “will not disclose identifiable information that is unknown publicly at the time of disclosure and is likely to cause financial harm.” sums that up. Saying “…any information related to our marketing channels or methods.” – Yes, someone really sent me this once – is not a viable NDA, as most “marketing channels” are publicly known or easily extrapolated.

3. The “confidential information” is worth protecting. Meaning both confidential and has a risk of harm to a person or business if disclosed. Saying someone likes cream in their coffee, may not be a public record, but unless they are Dave Asprey the disclosure of that info is unlikely to cause harm.

4. That you’re not trying to use an NDA to prevent me from reporting a crime. This is happened before and will likely continue until people just stop signing unneeded NDAs

5. That my use or disclosure of the information you’re trying to protect, wouldn’t itself constitute a crime. A fair number of things already have criminal and civil sanctions, some, apply to me. Please don’t write those into an NDA and act like without that signed sheet of paper, you have no protection. It’s sort of like asking me to sign a document saying I won’t murder you. I sware to you, if I sign or do not sign that sheet of paper, I will be in the same amount of trouble if I commit a murder.

Recap

While most NDAs are BS, some are worth signing. But if you have little or no confidential information, a broad scope for the NDA, ambiguous clauses, aren’t paying me, or are already protected by existing laws I won’t be playing Art of the Deal with you, even if you’re the president. 

Here are a few other posts about the ridiculous prevalence NDAs have reached.

NDAs Are Out of Control. Here’s What Needs to Change via hbr.org
No I Won’t Sign Your NDA: Why Non-Disclosure Agreements Are Stupid via cinematlmagazine.com
5 Pieces of Etiquette for Startups Approaching Advisors via business2community.com
Please Steal My Scope of Work. I Want You to Have it. via masonpelt.com 
The Problem With Non-Disclosure Agreements (NDAs) via pointsandfigures.com
Why I Don’t Sign NDAs via markwelchblog.com

Disclaimer

Mason Pelt is not a lawyer, this doesn’t constitute legal advice. These are his personal opinions and are general business advice. 

Header Image: “Golden” by chrisdonia is licensed under CC BY-NC-SA 2.0

10% Happier, Book Review

I want to call this book “life-changing”, but I’m not going to because reading it didn’t change my life. What I’m trying to say is, the book has the capacity to be life-changing. If someone handed me this book five years ago, for example, I think it would have changed my life.

The problem is, five years ago, I wouldn’t have read this book. Such was my conviction against woo-woo crap. A title like 10% Happier, read to me, like a neon sign saying “Deepak Chopra style word salad inside”. I thought this book was for “healing” crystal wearing hipsters and idiots, my perception was way off.

This is a book for everyone from the top shelf skeptics of meditation (that I once was) to the deeply determined silent meditator. What Moonwalking with Einstein is to memory 10% Happier is to meditation. It’s difficult to make this a review and not simply a love letter to a book.

If you’d been able to convince me to read this book five years ago, I think it would have been the catalyst that caused me to take up meditation. It’s incredibly well written, sharing the science behind meditation and the journey of the author. The combination of personal anecdotes and medical literature citations is clearly the way to convince me to try something.

My Journey Into Meditation

I started meditation about two years ago, after seeing a study showing meditation’s association with lengthening Telomeres. Telomeres are the cell caps at the end of your DNA, protecting DNA from damage. That was enough to convince me I should learn more. Eventually, I decided to try meditation for a month and have not stopped for more than a few days since.

My journey into meditation followed a path very similar to Dan Harris’s, even involving many of the same cast of characters. Granted, for me, those people were virtual. And for my first anxiety attack, I was driving a car; not live on television. I’ll let you decide who had a more frightening experience.

People Dan Harris (full name to avoid ambiguity) mentions like Sam & Annaka Harris, Terra Brock, and Mark Epstein, are people from my journey of learning how to meditate. Even Dan Harris was a part of the journey, making it strange it took me so long to read this book.

Keeping Your Edge

Besides being an enjoyable read, how to not lose your edge, as Dan Harris puts it, was a major take away for me. In avoiding conflict, even before I started meditation, I became overly docile. As a mentor of mine told me “I avoided conflict like alcoholics avoid bars. I can do no confrontation or go to war, the difference between Bruce Banner and the Hulk”

In the beginning, meditation made it easier for me to be docile. Knowing when to say, “Hey, not acceptable!” rather than just saying “Hey, everything is a matter of experience occurring moment by moment” is still something I’m unclear on. Dan Harris’s description of this problem resonated with me and I’m testing a few of his proposed solutions.

Did This Book Change My Life?

While this book didn’t directly change my life, we’ve seen a culture that has evolved around meditation. In the west the practice of Buddhist monks (who I always respected). And of Birkenstock wearing Berkeley dwellers (who I sometimes found disingenuous). Has become something that corporate leaders claim they do on lists of their morning routines. Basically, meditation is now so acceptable that it moved from the fringes to something that is virtue signaled.

Looking at my own timeline around discovering meditation caused me to realize that this book did, in a way, change my life. The culture around meditation changed, in some part because of this book. I don’t think I would have ever evolved past a guy who mocked meditation as “hippy crap” to someone who does it daily without that cultural shift.

So this book didn’t directly change my life, but indirectly, I think it changed the world. Leading to a set of circumstances that caused me to change my life for the exponentially better. And there are some people that were a part of my journey who are owed a thank you.

So, Sam Harris, Terra Brock, Dan Harris, Rhonda Patrick, Joe Rogan, Timothy Ferriss, Joseph Goldstein, Annaka Harris, (I’m surely missing a few names) thank you. The work all of you have done in promoting meditation, has clearly helped western culture become more accepting. You have all been instrumental in getting me to the positive place I now find myself, because of meditation.

Another worth reading book in this vein is The Happiness Project by Gretchen Rubin review by my mom.

Header Image via the Joe Rogan Experience

The Chaotic Language of Art

A friend asked for help promoting an “amazing and underrated artist” on display at a Dallas museum. Over coffee, we crafted a press release for Igor Samsonov‘s exhibit. I’d never met or heard of Samsonov before, but his work was indeed amazing.

The visual depth of every painting is striking. Scenes and subjects have an appearance reminiscent of songs. Rather than telling a story as a movie or book does, they evoke emotion, showing a story’s undercurrent. If you know the story, you can’t help recognize it, if not, you are cognizant of a deeper meanings existence.

After the press release went live, I thought the manic time-crunch favor was complete and went back to a normal day of work. I’d learned no great lessons, and met no new people, but that’s not a good story…

A Good Story

The next day I get a call. The press release we’d written had also written a check my friend couldn’t cash. He’d announced a live-streamed Q&A with Samsonov, and need help. It was an unplanned adventure that went astray of all expectations I had. The day of the shoot, the ideas incubated at an insane speed.

With no clear plan, differing expectations, personalities, and goals from various involved parties meant production was a little wild. What I thought would be a live stream in the style of the NY Times Live Illustration series. Became a request for an early 90s Oprah style walk-through the museum, that sounded like a walking shot from The West Wing.

It’s been years since my day job was video production – first real love or not – and I was a one-person crew. So my running and gunning live stream, with a rented Steadicam and a mobile hotspot, in a massive open museum, featuring two unscripted people wasn’t going to happen. Eventually, we ended up with several short interviews of Samsonov taking a deep dive into his works.

Limits of Expression

Due to some of the reasons I stated above, the interviews took longer than expected. A takeaway from the pandemonium, you can’t push your limits of knowledge, and language at the same time.

I spent much of the day with Samsonov. He’s undoubtedly fluent in English, and an incredibly good-humored and gracious man. But English wasn’t the language he used over the six years spent earning a graduate art degree at Ilya Repin Leningrad Institute for Painting. As he put it even in Russian he’s pushing himself to articulate the meanings behind his paintings.

After recording for the majority of the day in English (mostly). I asked to shoot one of my favorite paintings again, in Russian with the interpreter. It was among my favorite of Samsonov’s paintings, and also my favorite interview of the day.

I feel it’s very fitting “Salome’s Dance” was shot twice that day. Salome is a frequent theme in Samsonov’s work, he’s painted her 5 or 6 times in various, positions, compositions, sizes, and formats. He even painted this concept twice, First in 2014 with the painting “Salome III”.

The above images reflect the difference between the two Samsonov paintings. However, the inability to control and match lighting conditions exaggerates some of the differences in color, and paint texture. The Book about Igor was written by David Salomon

PR Advice

If you wanted a PR lesson from this, check out these posts I’ve written in the past.

6 Tricks PR Professionals Use to Get Press
What Milton Friedman Taught Me About Guest Blogging
How to Get Press for Your Startup

You May Enjoy

Whatever Tragedy Just Occurred, I Don’t Assume You Approve

Tragedies happen. Every single day something terrible happened someplace.

Some tragedies are of a variety that go viral. A school shooting, a crime motivated by race. A lot of things in a state with bizarrely open public records that creates nearly self-writing headlines. None of these are good things.

And You & I agree; the terrible thing is terrible. What’s more, I know we agree even without talking with you. If someone came up to me and said, – You were thrilled about the thing that just happened – I wouldn’t believe them. I would never believe an accusation like that without evidence.  

I’m saying this because; In the wake of a trending tragedy, I’m used to seeing the social web light up with a flood of people clarifying they disapprove. As if in the absence of clarification that they believe the heinous act was heinous others will believe they wanted it.

I think that we feel powerless, because in many ways, at least in the immediate moments after a Dante Alighieri style comedy, we are unable to do anything… So we post. We share that we don’t agree with the indefensible thing, we get likes, and comments and we feel a sense of power return.

Sometimes public outrage holds powerful people accountable. But that is not what is happening here, is it?

The posts online, they aren’t a rallying cry against someone who abused and will continue abusing their position; are they? Is anyone responsible for this even alive?

Is the collective outrage fueling a machine that makes lone lunatics famous? One where cable news shows the body count as a video game graphic, counting up.

Will the vile person responsible be put on the cover of a magazine, like some kind of rockstar? Will reporters talk like it was a game of duck hunt… “it’s almost a world record for the most deadly of its kind…”

Is our outrage putting a villain on a pedestal for other unstable people? Will the ill and evil come to the understanding that their feelings of powerlessness can become a voice that will be noticed? That by causing enough harm, they can set public discourse for a news cycle?

I can’t tell anyone what they should be doing. I don’t believe I have the answers. But I think it’s worth asking, why are we doing this?

The rush of dopamine from social likes, giving us a small sense of power when we feel weak after a tragedy… Is that the same rush, as the ones felt by those perpetrating these tragedies?

We are not committing violent acts. But are we, in some way, part of the problem?

Header Image “Divina Commedia” by naevus


PS. The header images remind me of a Samsonov painting.

In A Decade, Devices of Twenty Years Ago Will Be The Hot New Gadgets

This post was originally published on Business 2 Community by Mason Pelt. It’s syndicated it here to maintain a record of guest posts.

In ten years, devices from twenty years ago will become the hot new gadgets of the day. They will be improved, shinier, and better with technology advancement. But limited function devices, that just play music, help you navigate or wake you up in the morning will be all the rage. Not only among the same people currently buying 8 track tapes, but by everyone.

That’s my prediction, and I make it from a place of frustration. There’s been a departure from building technology that better serves its users to seeing how many features one object can have. WiFi enabled toaster, Bluetooth coffee machine, smart hairbrush; all things that really exist and I can’t think of a reason they would improve the lives of users.

My phone is a flashlight capable of playing Pac-Man. It’s a compass pointing at both true North and where people are outraged today. How I access my plane tickets, and how the NSA knows who I’m meeting when I land.

Phones do so many things; you almost forget that glowing rectangle is a communications device. You forget until feeling a slight twinge of annoyance and anxiety when an unknown number interrupts the music you’re playing.

Humans seem to adapt to their ambient threat level, and I realize how fortunate I am that anonymous callers interrupting a Tom Waits marathon are where I find my angst. However, I’m not the only one in this boat.

When mp3 players first came out, they had problems, skipping, miserable battery life and more. By the time stable, reliable mp3 players were available affordably, phones were taking their place. But even the early flawed mp3 players weren’t interrupted by calls… In a way wasn’t the old technology better then what replaced it?

Cramming every possible function into a device doesn’t make that device better than the sum of its parts. Swiss Army knives are a multi-function tool; a blade, a wood saw, a bottle opener, screwdrivers, corkscrew, wire stripper, and awl. Every one of these tools is inferior to a standalone version.

I use alarms, timers, and the stopwatch on my phone every day, and I don’t own an alarm clock. But while a hybrid watch timer makes a lot of sense, an alarm clock that allows others to summon you at a whim is counterintuitive, even if we all use them.

Convenience lets the Swiss Army knife do in a pinch, but it’s not ideal. For the most part, people who routinely need a screwdriver won’t hold off on buying one because they own an amazing all in one tool that lets them feel like Batman.

People in a decade will totally still buy phones able to accidentally photograph them on the toilet. And much like a Swiss Army knife, most of the extra functions will do in a bind. But I expect to see more people buying, and relying on limited function tools that serve their needs. Not just relying on one expensive device that, kind of, does everything.

Alarm clocks and mp3 players are cheaper and at least as good as they’ve ever been. Maybe now is the time to move away from our phones being the magic glowing rectangles receiving our undivided attention. We’re spending our days staring at our devices, like Theodore Twombly in a version of the movie Her, where the technology makes you sad and angry.

Header image by stephen4 / Pixabay

Default Diet Advice

First, understand a calorie deficit is the only reason you will lose weight. Second, understand that fat, carbohydrates and proteins can all be converted to adipose tissue. If you cut carbs, or fat and lost weight it was because of a calorie deficit, not magic.

But I ate 3,000 calories of only meat daily for a month and lost a ton of weight!

Some People

Protein has more of a thermic effect – than carbs and fat – meaning you burn more calories turning protein into energy than carbs to energy. That doesn’t change fat loss from being about calories in versus calories out, it changes your default caloric burn.

But I only at 1600 calories a day and didn’t lose weight.

Other People

If you restrict calories, your body tries to conserve energy. If your NeAT (Nonexercise Activity Thermogenesis) rate changes this also doesn’t change how calories work. If you consume fewer calories, and also burn fewer calories, you don’t lose weight.

Peoples NeAT rate is a reason they lose weight when prescribed amphetamines. It’s also the reason professional fighters tend to blink slowly when they weigh in.

Now that I have the “there are no magic foods that don’t count” ranting out of the way.

My Advice: Control calories, protein & fiber

Calculate how many calories you should be eating to lose, gain or maintain weight. A lot of calculators exist online, I’m not going to endorse one and the formula is a bit complex to write out.

I recommend getting 0.8 – 1.2 grams of protein per pound of lean mass, yes, you can get by with less. But high protein diets tend to be more satiating and even 1.2 grams per pound of lean mass is not close to the proposed maximum anabolic effect of protein.

For Fiber get 15 grams per 1,000 calories. If you eat meat, eat fiber along sided it, because that seems to lower the increase in colon cancer resulting from red meat consumption.

But what about…

Note: I’ll update this post-overtime with more types of diets and questions that are frequently asked about.

Keto?

I like the way I feel on a ketogenic diet. Also, keto seems to have major positives for those with (or at risk of) Alzheimer’s, Epilepsy, and Cancer. That said, keto is not magic for fat loss.

I won’t go into depth on keto safety, but most of your body’s tissues are conditional glucose users, and can be fueled on ketones. Most humans bodies can create more than the 100 grams (or so) of glucose needed for your central nervous system and red blood cells.

If you try keto, feel good and don’t feel overly restricted, Do it. But don’t start saying crazy things like: “Your body is better at burning stored fat in ketosis.” Or “The human body can’t turn fat into stored fat.” both are untrue.

Header Image by p_a_h