Marketing People Are Crazy

So Marketing People - you know those people that are brought in to Move Your Company Forward, Sell Your Idea - are crazy. Let me provide you with a couple of actual stories that proves my point.

Mr. Seriously?!?

I met one guy when I was first getting my universal mobile company together (I will write about my equity nightmares another time). He was a nice person, young (maybe 26) and very energetic. Over the course of a few weeks he got what I was building and he even had one of his friends provide a (complete worthless BTW) pre-money valuation of $20M that would, according to the report, probably sell between 10x and 20x within 12 months.

So I then meet with this guy to discuss terms of a possible equity deal. I first ask him what he is willing to do and what he wants for his effort. He said that he could introduce me to a few companies and set me up to possibly obtain partnerships and that this effort would take him up to 3 weeks. I said that sounded great and I offered him a, rather rich, 5% finders fee for his efforts.

At this point he actually got offended. How DARE I suggest that a finder's fee would be sufficient - he was MUCH too valuable to be anything other than a core part of the team. He demanded that he be a CMO or higher. To be clear, I told him that, based on his own valuation I was giving him $1M in equity that his own report said would be $10M to $20M within a year. "That is not enough for my abilities" he responded - seriously?!?

I then asked him what major things had he done in the past to warrant such a position. Well, he had actually not done much of anything. I then asked how he was going to connect me to various companies. Through direct and indirect friends he responded but not through any direct contacts. Now he was doubly upset that I had the gall to question his credentials - even though he had no credentials that were worth anything. He got so offended that he dropped everything and left the $1M in equity to return to his $120K a year job as a salesperson for another startup! Crazy.

Mr. Invention

Early on in the development of the universal mobile company, my Deep Technologist (Mr. DT) and I went through numerous scenarios in order to determine the best way to monetize our invention. We knew we needed to place something on a mobile device but would that something be very simple or much more complex. The underlying question came down to whether we were building out technology or an actual retail company. We decided to build out and sell the technology using a rudimentary mobile platform that would prove our invention but not support full retail capabilities.

I then discussed this invention with Mr. Invention. This is important - we had TWO conversations about this invention - that is it. While he did discuss other items with me about the company they were all in the aim of obtaining funding. We agreed to a set finder's fee (I guess he was better than Mr. Seriously...)

So during our two calls Mr. Invention pushed me hard to go down the retail road. Since I am not a marketing guy, I listened and we decided to pitch that idea instead of just the technology. Mr. Invention understood that he did not actually change anything other than how we presented the concept to investors.

So we meet investors and - LO AND BEHOLD - we are told that going down the retail road is death and that we will be MUCH better off building and selling the technology. Yes folks, just like Mr. DT and I had thought originally.

OK, now the fun part. I am discussing equity with Mr. Invention and listing out his finder's fee and possible future equity should he do any work down the road. "But what about my upfront contribution?" he asks me. Thinking I missed something, I told him that we agreed that his efforts to land money was why he got the finder's fee. "No, no", he responded, "I helped you guys form your core invention."

So I asked him what he meant and he said that his efforts to push us into the retail space was core. When I showed him that we already had a rudimentary platform and he agreed he did not help with that part. I then got him to agree that we were not going to build out a retail component. "But I still gave you the retail idea", he said. He then agreed that the "retail concept" did not change the actual invention and that it only appeared as vaporware in a couple of presentations.

"But I still pushed you guys down that road". Sure, I said but first we explored that road prior to you and rejected it and, second, you took us down a road no investor agreed was a good idea. Did not matter to him - he felt he deserved at least 5% of the company for his contribution. To put things in perspective, I only have 30% and I have been paying people, writing patents and developing code for 6 months. His "contribution" stems from 2, 30-minute conversations that we ended up not using. He now refuses to talk to me and is still upset about only getting a finder's fee.

Crazy, right?