The Karl Principle

All stupid business books are either titled _The/A/An_ _Noun_ _Principle/Rule/Law_ or something that couldn’t even get into a fortune cookie: Blue Balled Roosters Don’t Fly Planes. This is one of them. But hey, it’s free!

The Karl Principle

You should only work with the people you like.

{ Two hundred pages of fodder to follow, justifying a $29.99 price for a single idea }

We used to work with a company out of Los Angeles that we just hated. I’m sure they tried their best but I think everyone on my team thought they were out to get us. Not only has that company gone out of business through the years but their building no longer even stands in Downtown Los Angeles. We couldn’t count on them for crap and oh did we let the frustration show. It was agony from the moment we signed up and the only positive thing that came out of it was the day we ripped out equipment out and moved it a few blocks down the street. I am sure they were glad to see us go.

Most businesses, when they are hurt, rarely try to work together towards the same goal. It’s the sad truth that we’re all busy and most of us would rather just go on with our bitter day till the clock hits 5 than take some extra time to smoke the peace pipe.

It’s just business. Money for service, service for money, wham bam thank you ma’am.

Yet, there is a far different reality to this which brings many a joy to do business. Beyond money.

I’ve widely blogged about OWN’s growth pains. We really f’ed up some billing mid-2006 that took towards the end of 2008 to resolve. The person that won that “brown lasso” challenge shot out the correct invoices to clients all over the world. Earlier tonight I got an email from a guy I frequently work with:

Heya there Vlad,

I just wanted to let you know that I got your letter today and saw the amount of how much I owe…

Forgive the frankness but “FUCK!”.   A bit of a surprise there…  It shouldn’t be, it’s my bad that I am running at 150% all the time to not even consider it (after all, I’ve set up the services).

It’s a bit of a fright and a panic – but I will sort out with you what I can as soon as I can.

…..

I’ll square with OWN.

Want to guess what my response to that was? It might surprise you:

Considering that you are our cheerleader in UK you can feel free to ignore that letter.

Friends are hard to find and we can all use some in this market. Consider this a small token towards that.

-Vlad

Yep, debt wiped clean.

Why? First, because this person has brought in 10x the business to OWN than he owed us. Second, because this is my investment in someone that has invested in me.

This is where The Karl Principle really changed how I go about our partnerships. I learned that there are two kinds of businesses out there. Those that are just looking for a service and little else, and those that are fully invested in building my company because the growth of my company is going to make them better off.

In case you are wondering, this is how we decide which services to roll out. Yes, there is demand for everything and anything under the sun to make a buck. But we look at what our core partner base that we are very close to is looking to fit in their portfolio. Why is ExchangeDefender LiveArchive going to Australia before Europe and Canada even though the two combine for more revenue-wise than Australia? Because it’s the right thing to do – our partners in Australia are recruiting for us, demoing our products and constantly treating us like gold. Why is it that there is an entire continent of people where I only know one asshole? Outspoken my ass. Yet on the other side of the planet I have to keep a list of people whom only one engineer is willing to work with because every support request is laced with insults and taunting?

Seriously, who do you think gets a better rate? Someone that is always promoting us and always polite and courteous to the staff? Or the highest tier account that is a perpetual dick that everyone on the support portal dodges requests from because they know they are about to be smacked around?

Our goal in 2009 is to work closer with our partners and help improve them. We want to be better friends than we’ve been over the years. Future of this company is in software, so we’re going to do our best to be nice to the actual people that work with us.

The Karl Principle taught me to fire people that did not want to treat my staff with respect. The Karl Principle taught me to fire accounts that were unprofitable and showed no hope of ever being satisfied. In 2008 I took it a step further, if I knew I had a loser on my hands I politely told them to go to Postini or MX Logic or MessageLabs or anyone else, please!

Did that make me the Public Enemy #1 when I told a bunch of people to suck it? You bet. But man, I wouldn’t wish them on my worst enemy. We’ve all had clients like that, where their new provider asked for a reference and you nearly bit your tongue in half wondering just how hard you’d be sued if you were completely honest?

The Karl Principle: Make your business partners people you’d enjoy going out to lunch with.