How we now negotiate a new business ashore: real-world unit tests





The idea to test the code by placing it in inconvenient situations did not appear immediately. Before that, it was not the developer who thought about how to break the code in different tests, but the testers tried to do it by hand. Roughly speaking, it was assumed that a wise developer would pierce the code with his thought and immediately present all its states in a quantum superposition.



A lot of things from the IT sphere are directly related to business processes. Toyota at some point came up with interim unit tests in production in its TPS ("every next link is an internal customer with acceptance criteria"), but in areas such as negotiations, the history of end-to-end checks has not gone far. In general, in solving typical negotiation situations there are a lot of ingenious mechanics like " Russian roulette " or " Texas shootout "in the division of property. Only few people agree to use this, because in the end you need to be able to decompose the situation and debug it.



About 7 years ago, I wrote about a very simple model of how the founders of a small company can negotiate at the start: who is responsible for what, who is in charge in a clinch situation, how important decisions are made, and so on. It was a good working mechanic, but as it turned out during this time, anything can happen. And all these exceptions need to be handled. For example, I did not think that we would have the death of a co-founder (and the ensuing problems, to begin with, with the mail and domain registered to him, and then with a bunch of everything with the inheritance of his share).



And at some point, a man came to visit us, who devoted half his life to the conflicts of the founders. The first thought was: "Well, this is not about us." And then common sense overpowered, and we tried its negotiation mechanics. And you know what? It smells like masochism, but works surprisingly well. In general, let's show what it looks like a very distant, but still analogue of unit tests of cooperation of several entrepreneurs.



How it looks



There is Dima Grits, he is a lawyer, but he acts as a psychologist, rather. He can ask hundreds of questions, after which the future founders may already fight on the spot - but the result will be an essential agreement on how to do and how not to do it. It can later be entered into the charter of the company, but the point is not in this, but in delineating the boundaries.



The same questions are in the form of cards, if partners want to do everything themselves - well, or if they do not want to share intimate things with some leftist people. Especially by lawyers.



It is interesting that this is a product of its time: more and more often we see various misunderstandings due to multitasking on projects. When a person works in 5-6 businesses at once (and this is normal, especially after the world has been turned upside down by the distance), then the boundaries are oh so needed. You need to know what is expected of you, what is allowed and what is not. It is clear that you can find out empirically over the years of grinding to each other - but you can sit down and discuss in advance.



So, you get ready for 3 hours, take a notebook for notes and start asking each other questions. It is clear that in fact it is too early to resolve many situations: the business still needs to be started, it still needs to be earned, and so on. But it is better to spend these 3 hours and then close the project than not to spend and find yourself in a conflict situation when the bear has already been killed and the skin needs to be divided.



What is this all for?



One of the first questions is why business is being done at all. It is not accidental, because there are many consequences from the goal. For example, if someone wants $ 3 million for a rare operation for the hamster Zinovy, then it may turn out that it is possible to achieve the goal not with money, but with something else during the project, for example, by providing an important barter service to a neurosurgeon. Well, it's just that it would be good for partners to know in advance what each of them wants. Because if the goal is to "move to Australia," that might slightly affect the plot.



But it is much more important to immediately decide whether the business is for yourself or for sale. Because these are different types of approaches, different management models, different priorities. For example, our "Meteor" is currently the largest non-franchise network of children's sports schools in Russia, but it will be very, very difficult to sell it if we want to. Nobody needs sports schools by themselves, they need a client base, they need technology and processes that allow all this to be combined and made into a system. If Mosigra was sold, in fact, according to the client base (more precisely, customer traffic was bought, the number of potential deals), then in the case of Meteor, it will be important for us to develop a methodology (there is already a second version from the Russian State University of Physical Culture), to monitor its effective implementation (we are working on neural network video analytics training) and create some kind of platform that brings customers together.That is, the physical education teacher Uncle Petya should find himself in a situation that even if he is a tough football player, it will be more profitable for him to open our department and work in it than to try to train children without our help. By the way, already now there is a network effect, when we can make district championships between schools thanks to a large number of departments, and collect teams by district - but if (when) we want international scaling, this will not be enough.and collect prefabs by district - but if (when) we want international scaling, this alone will not be enough.and collect prefabs by district - but if (when) we want international scaling, this alone will not be enough.



On the other hand, if a business is built for sale, it often has no goal to make a profit at the moment. Yes, the unit economy should converge, but you need to grow as quickly as possible in order to get maximum market coverage. Business for oneself can be comfortable and leisurely-cozy, but if we are talking about being No. 1 or, in extreme cases, No. 2 on the market, it’s just a hell of a race.



Somewhere in this place, it turns out that there are people who can clearly formulate expectations, and there are people who are incredibly infuriated by this. Until now, we occasionally meet interesting humanitarians who do not want to count financial models, because it is somehow difficult, and you need to predict a lot, we'd better start, and then we'll see. We consider them dangerous psychos. And here again Dima Grits helped, suddenly giving a tool: instead of asking them to give the state of the future, he breaks it all down into dozens of questions about “what if”. And it works.







Do it like this, don't do it like that



Once it becomes clear why a business is needed, for example, you can decide what is ethical and what is unethical to do. For example, in stories for investors, the principle fake it till you make it is often found - say that you have it, promote it, collect investments, and then do it. The principle is, in general, logical and effective, but not so honest. A recent example - Engineer.ai said they have AI for writing scripts similar to those from the site and verbal descriptions of what the program does. But there is a nuance : “Engineer.ai has only started developing the technology needed to automate the creation of applications in the past two months, according to a former employee. Several current and former employees stated that most of the work is generally done manually by staff . Somewhere immediately after the solution of this issue comes the question of bribes, kickbacks, is it possible to knock on a competitor at the prosecutor's office, is it possible to scold someone from partners, contractors or government agencies in personal social networks, and so on. And then you should ask yourself this wonderful question, which will remove many illusions:







I know a beautiful lady who manages personal relationships like projects. For example, she put forward the concept that first there should be a fast MVP for one night, and then you can deal with each other as individuals in more detail. She immediately exhibited cross-SLA like we did for franchises in due time: “Do you want the order to be completed 2 days faster? Are you ready to pay more royalties by 5 thousand rubles a month? " - that is, when something is important to a partner, and he puts an SLA on it, in response another SLA comes from you, which is already important to you. And, in theory, all relationships are described by such chains: if you agree right away (and we did not agree with the franchises right away in due time), it will be clear what is important to whom and what to do. The lady's merit is that she agrees on such a settings file not only in the business sphere,which at some point surprised me a lot, because people, as a rule, are not ready to rationalize and cover personal relationships with business processes.



Next, you need to discuss possible critical situations. Here, for example, is a great question with an excellent solution: but if it is not asked on the shore, time will be fatally lost:







Usually not illuminated areas



In small business, a lot of questions are related to who and what is doing on the project. It was not for nothing that I said above about multitasking: when you have one project, it is more or less clear that you all rush in and do it together. And when there are 5, 8 or 26 projects, you need to be very clear about where whose role ends. This can be time in hours, this is the closure of some goals, this is the ability to access the right people, this is money - it would be good to discuss all this right away in the form of concrete actions that are expected of each other. And also - whether there will be a mandatory office, whether it is necessary to coordinate their work schedules, whether everyone can immediately run away on vacation for May or someone will remain on duty, and so on. It is interesting to discuss salaries right there. In general, the history of salaries is very important in order not to miss the moment when you turn a project into self-employment.



It is assumed that the partners have shares (or options for 1 ruble for these shares, which is much easier to issue at the initial stages), and there is a salary. Salary is given in exchange for work. This is important because the business, in theory, at some point should work without founders: the financial model should converge in such a way that hired employees will replace them. This salary is written into the company's expenses, and the profit is distributed to development, a safety cushion, and only then to the payment of dividends and bonuses. By the way, it is also better to discuss the profit distribution scheme right away. We, for example, assume two states: salaries and the sale of a stake within the company or to an external buyer.







A large block of questions concerns how personal issues are resolved in the company. For example, is it possible to provide services to relatives for free, are there special discounts from the partners themselves, is it possible to suddenly hire a relative or friend. How and who are introduced to employees? What does anyone have on their business card? Is the partner ready to tell the co-owners about his personal money, his time, plans for life once a year?



Is it possible to discuss secret things by mail, telegram, telephone? Who can spend how much on taxis, travel hotels and restaurants?



Are there any customers with whom to work well, just absolutely zashkvar? Is it possible to do exactly the same project nearby or with other types? And from the same area, but different?



When exactly do you need to stop the business and scatter? Who gets the brand upon liquidation?



Who can be interviewed and who cannot?



It is very important what kind of reporting and how it is done. That is, our documents are open to all co-founders, and after the experience of retail, the reporting is quite tough. But there are companies where either something is simply not recorded, or it is necessary to receive data on the same financial analysis upon request. So, it is very good to discuss not only the fact that all this comes by itself and without question, but also specific forms of how it comes. The deeper meaning is not to show how you trust your partner, but to ensure that the system as such excludes the possibility of abuse. It's like hygiene.



Do I need to think in advance about a prenuptial agreement in case of divorce so that someone's ex-wife does not appear in the founders? What should be foreseen in the event of the death of a partner? What if someone breaks their leg or is thrown into a hospital, under arrest, in a maternity hospital or in the army?



Another interesting question is the terms of the revision of the partnership agreement. There are interesting models when it is concluded for a period of, say, 3 years, and after these 3 years it is revised according to the results of the work of each participant - with the redemption of shares, if necessary. Moreover, by the way, the issue of redemption of shares arises regularly: this is necessary both with additional financing for growth, and if the partner wants to go out of business, and so on. Naturally, right on the shore, you need to agree on the valuation of the company - on the methodology and the number, for example, that it will be EBITDAwith a multiplier. Well, and how is this very ebitda considered: according to official or "management" reporting.



In the model, a lot is still devoted to interaction with investors, employee options, various collaborations, and so on. It is like a training program for a flight engineer on the ISS: it includes both specific actions in case of typical accidents, and the procedure for action in emergency unpredictable situations. It turned out to be damn useful to discuss this when starting a new project: at the very least, it greatly reassures all adequate co-founders.



In general, sit down, write down all the questions that you misunderstand, study the mistakes of friends-colleagues and their conflicts, collect a collection of possible paranoid situations - and start discussing. If you think about it, such a procedure can be useful not only when starting an entrepreneurial project, but in any situation where it is much better to talk about risks and decisions to them in advance than to collect knocked out teeth with broken hands later.



Here is more about Dima , if you 're interested. And yes, he is one of the co-founders of our project, to which the link leads, so this procedure was applied to him too :)



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