Entrepreneur Lessons From Partnerships

All right, so let's talk about big entrepreneur lessons from partnerships. Who you end up choosing, not only for marriage, but also in business is ultra important. And Neil and I have had our handful of partnerships and we're just talking about, you know, some situations that we're dealing with or have dealt with. And so I think we'd share some stories here because you guys like the stories.

Yeah, Eric and I have been partners together on a few different ventures over the years. I remember one venture we were in, someone stole even money from a corporate account of ours. And the reason I bring up this one is in partnerships, no matter who your partner is, how close they are, you should always have checks and balances within your bank accounts. And the easiest thing to do is require multiple signatures for money to be spent. Even then, you can still have fraud. You like— a great example of this is in one of my entities, we have multiple signatures. Someone pulled out $900 grand-ish, I believe. And when you look at like the $900 grand, that's a lot of money. It's not going to break or, you know, hurt us. We can pop in more money from one of our other entities and just— this was an international entity— and just fund it with more cash. And then you just go through the normal legal routes and go after assets and freeze people's assets, you know, file criminal charges, etc. Typically you, you can recuperate, but just checks and balances. And then what we've learned over the years is we try to get people at least on the money end onto our banking system. And then when you have multiple transactions, anything over a certain dollar amount gets triggered to another person and you start having more things in place where it makes it harder for people to just ever take money from you.

You also, I mean, you need multiple signers, but also you need checks and balances in terms of approvers too. You might need 2 approvers to let it go through. And you, 'cause you have that set up with Chase, right? That's what we do with Chase.

We have multiple signers and then it, then I believe someone gets a phone call over a certain amount. My co-founder, I get a phone call to approve it internally. Even if there's 2 signers, our CFO typically gets a call for approval as well. Over a certain amount, not like 5 grand or 10 grand, but, you know, larger amounts.

I, I think a big thing too is when I think about you and Mike, for example, like Mike I know is a good person, but a lot of people in the world are good person. You can't, you can't partner with them just 'cause they're good people. He's a good person. Plus also he works really hard. Um, and I look at it as, so they have to work really hard. They also have to be good people too. And they, a lot of the values have to align with yours. It doesn't have to be picture perfect, But at least, at least those things need to align, right? And so when I think about you, I don't need to worry about you working cuz you're just gonna be working all the time. When I think about like my co-founder on the software side, I know he's gonna be working all the time. I know if I'm messaging him at 10:00 PM, he's gonna respond. You message him at 8:00 PM, he's gonna message him at 5:00 AM, he's gonna respond, right?

Yeah.

That is very hard to find in people. And if they're good people, like Warren Buffett likes to talk about, you, you wanna find people with integrity, intelligence, and energy, right? And, but if they don't have the integrity piece, the other 2 don't even matter. And so you and I have had situations where we worked with people where the integrity's not there, or you can say the humility's not there. And they start to think about them, them, them, them, them more. And then that ruins everything because when they start to become selfish or entitled, that ruins everything. So, which is inter— there's a whole nother discussion we can have. I could talk about a, like a little YPO dinner I did yesterday. But let's talk a little more about these lessons from partnerships and how to pick the right partners. 'Cause I think you had a great partnership with Heaton, even though eventually you guys went your separate ways. You guys are still, You guys are still family, right? I think it was still a really great partnership. So maybe there's some other lessons you can share before we move on.

Yeah, I'll share one on that one in which you want to pick someone who complements you. So like if you look at Hiten, he understands engineering, product usability. He's better at innovating than I am. I'm better at marketing and sales. If you look at my partnership with Mike, he's better at operations, recruiting, and sales. sales over me and people. He's much better with people, you know? And then the other thing I've learned from partners is you got to be careful where they're located. A great example of this is you and I are both in California. If something goes wrong, the court systems, we understand. Like when I was giving the example of like the $900 grand being pulled from me, it wasn't checks and balances. I learned from the lesson that we had when we lost money from our account. years and years ago. So I haven't really had issues in which people taking money other than the, the more recent one of $900-ish grand. But you're talking about in a country where there's corruption. So when you have partners in other countries, even though technically they shouldn't have been able to do this, you got to deal with people bribing others and things like that. It's just like Sequoia. Sequoia picks amazing companies or bets on amazing companies and picks amazing partners. Because I look at the people they invest in, are partners to them. And they're writing checks of billions of dollars in aggregate. And what do they do with China and India? They pulled out. It's no longer Sequoia in India, and it's no longer Sequoia in China. It's rebranded to something else. They had a lot of corruption issues in both countries in which people were faking numbers and all this kind of stuff. That's an example of picking bad partners. But But sometimes it's hard to vet them. And what makes it really hard is when you're dealing with other countries, cultures are different and the way people operate are different and the laws aren't as black and white as they may be in the United States.

Is there anything you would have done differently with this recent partnership?

The only thing that I would have done differently is, and I started doing this with NP Digital, you can now end up It costs quite a bit of money, but you can end up having— like, we use Bank of America for a lot of our global bank accounts. For US, we use CIBC combined with Wells Fargo, but we mainly use CIBC, and CIBC has been a great partner. I would've been using Bank of America internationally much more. And Bank of America is a US bank, so people are probably wondering how the heck is Bank of America in other countries? Well, what they do is they partner with local banks in every single country, so you can log into your Bank of America interface and control everything. And you have access to everything with a click of a button between countries. You can transfer money and we do all this kind of stuff. But I would've set that up from day one versus setting it up years later, because I could've saved a lot of money from people dealing with stuff. Like, you can go into a bank in a different country and no joke, even if you own all of it, they'll be like, oh, they're fighting with each other. You know, just listen to this guy because that guy's local. And I'm not saying people are bribing each other, but you have to deal with that. Like when we were talking with the police, you know, people are telling me like, oh, we have to get to the right person so that way they can't be paid off. And I was like, huh, would have never guessed this is still problems in today's world.

Yeah. Well, it's human nature. I think it'll always be a problem for at least the foreseeable future. But so are you saying if you do Bank of America internationally, they're partnered with all these local banks and then But these partnerships, they— Bank of America says, hey, we still want our security features and everything.

And you go through Bank of America's interface for their, you know, treasury accounts.

So Bank of America will cover you, they'll protect you.

Yeah, you don't have to worry about anything.

But no, none of these other banks do it. Chase doesn't do it.

Chase does do it.

Yeah, I have to imagine.

Wells Fargo does not do it. I can see that too. US Bank does not do it. From my understanding, there's not too many actually options for global banking.

If you're in B2B, here's the deal. LinkedIn account-based marketing sucks, but It doesn't have to. With Karrot, it allows you to create personalized ads towards your customers and also personalized landing pages that align with the ads. So you're gonna have higher conversions and influence pipeline reporting to prove that your ABM works. So if you wanna learn more, just go to karrot.ai and you can join the waitlist. Again, it's Karrot, K-A-R-R-O-T.ai, and we'll see you on the other side. Yeah, but going back to what we said too, I think, you know, sometimes I think it's harder to, to vet these international partners, which is why I think if you're gonna partner with someone, you have to meet 'em in person. And I do think this is a situation where you have to wine and dine them and meet their family and everything and spend extended time with them.

Dude, I've done all that.

And still not. Even then, it's still not enough, right? Ideally, it's with someone that you've known for a long time. So like, I've known you for a long time, or like this other guy that Sean, who I'm partnered with, I've known him for a long time too. So you, over a long period of time, people show who they are. Over a condensed period, even if they meet you for 24 hours or whatever, You can put up a front.

Yeah, but we've known each other for a long time. We've had businesses with other people that we've known for a long time and we've still had issues of like stealing and stuff like that. People may not see it as stealing, but in theory, taking money that is not yours is in essence considered theft.

Yeah, but you know, at least we know now. So it is what it is.

Yeah.

Yeah. Okay, well that's good.

Speaking— And I would go back if I had to reemphasize one thing on picking right partners, to double down on what you said in the beginning, you have to pick people with the same values. You and I work a lot. If one of us did not work a lot and then we wanted a partnership, one of us would grumble. The person who's not working is going to be chill, but the person who's working a lot is going to be pissed off eventually.

Yeah.

That someone—

Because there's resentment.

There's resentment.

Okay, I'll give you another example on partnerships. So I had partnered with— actually, I've tried partnering with a handful of high school friends, like different high school friends, so nobody can pin this on anybody. But I remember one time I was working on a software with, with a high school friend, and then this was when Snap was a big thing. Snapchat, right? And I looked at his Snapchat and I noticed he was, he, he wasn't working, but he was making meatballs. And I got so pissed. I was like, he's bragging about his meatballs and he's not working right. And I'm here busting my ass. And there's a handful of par— and I realized these partnerships didn't work out, not cuz these people are bad people, but they didn't wanna work hard. And that's okay. Like, Much less than 1% of people wanna work them. Yeah. Right. And so you have to understand that. And, and by the way, we have our core values at our company. Do you know what your NP Digital core values are?

I know some of 'em.

Here's the thing. Like what I wanna call out here is I know the core values of my company, but not necessarily my core values are gonna align with Neil's core values. I'm gonna give you my core values right now. Right? So the company's core values are to learn relentlessly, which I think you do have just in a different way. I do think you talk to a lot of people, right? That's one. You agree?

Yeah, I can pull 'em up right now. It's on our page. Okay.

Well, well, let me, let me finish while you, while you pull it up. Okay. A bias to action. I actually think you have that. So I, I need to do things right. Like I, I, like if I hear something, I just wanna do it. The third thing for us is to, to be unreasonably resilient. Actually, I think you have that too. So it's like you can take a beatdown, right? And then the fourth one is to make bold long-term bets. I think you have that too, just in different ways. So go ahead, name yours.

So we have 3 values listed on our website. These are already new, but I know we have more values than the 3 that are listed on our website because in our old office pre-COVID, we would have stickers everywhere of our values. The, the first one that's listed on our website is think big. Self-explanatory. We want people to really—

Do all of your people think big?

No, there's no way. When you scale organization to more than maybe like 500-ish, I would have to guess, is when we started hiring people, not necessarily who didn't believe in our core values, but You need to fill seats sometimes in certain roles and you're, you know, that someone may not align with everything, but they're in a position where it doesn't matter. Like they may be just an assistant. I'm, I'm, I'm making it up, right? Where you don't need 'em to have all these specific values. They just need to do one thing really well.

The line you said I think is true and it holds true today. I hope the line that you said does not hold true in the future.

I hope it doesn't.

We'll see.

And it gets worse as you get bigger. Like, I hate to say it, we're 1,000 plus. There's no way everyone has the same values. And it— I'm not saying we did a terrible job of it because of that. I think we can all of course do a better job, but there's no way everyone at Facebook or Microsoft or Apple, you know, believes in their values. A lot of them just go with the stock. Stock does well, they're happy. Stock goes down, they're sad.

We'll finish. Okay, think big is one.

Our second one is own it, right? So this one I'm really big on, so is Mike. You do something wrong, own it, learn from it, improve. Don't make the same mistake over and over again, right?

Totally. Have fun.

If you're not enjoying what you're doing, we believe that you shouldn't be working here. And the reason being is the people who enjoy what they're doing, and this also goes back to partners, if you both don't enjoy what you're doing or including the business idea, you're not going to spend the time and effort. And we believe that when people have fun and they enjoy working, they'll put in a ton of energy and they'll work nonstop. Like for example, my team and I, a lot of us were up at 3-something in the morning today. I wake up at 4, so 3:15 wasn't a stretch, but I had to put on the alarm for 3:15. And it was because we're terminating someone within a country and they had a major role and I had to send out an email to everyone within that country letting them know. Then you got to deal with email and security and people align. And it's just like, cool. Everyone had to be up in the US just to double-check that nothing's happening wrong within that country.

Is anybody flying over there?

No, we have a managing director on the ground. We have lieutenants there, but we have 3 people who have visas that are on standby in case they need to fly, in case something goes wrong in the next week or 2. But we don't think anyone will need to. It's just a question of time.

Interesting. All right, so that's, that's what we have around partnerships. Hopefully you guys found that helpful. But anyway, guys, hope you guys enjoyed that session. That is it for today. We're gonna be recording in Miami using my DJI Osmo next week. Neil and I will be, and we'll see you in Miami. See you in Miami.