My Business Partner
Sep 27th, 2008
When I started Big Nerd Ranch, I recognized my strengths and my weaknesses. I am a good teacher and a good programmer, but I’m not much of a sales/accounting/strategy kind of person. I really needed a boss.
I met Emily Herman when I was six. We grew up in the same neighborhood near Washington, DC. Because she is the most cunning person I know who still has a very strong sense of integrity, I asked Emily to be my boss. And, because I had no actual money to pay her, I gave her stock: 40% of the company. Over the last seven years, Emily has carefully grown the company and created space for me to do writing, teaching, and programming.
Emily did not want to build the ranch.
Emily has been a tremendous business partner. I have never worried that she was cheating me. Our customers find her helpful, creative, and professional. Our employees know that she is fair and kind. Most importantly, she has made creating a business truly fun.
Emily, however, does not like to own things. Purchasing anything that won’t fit in the back seat of her car causes her anguish. (Why? She fancies herself a nomad, and large possessions challenge her nomadic potential. The challenge is immediate and visceral.)
When I offered her the job, I was very clear: “… and we will buy or build an inn with a classroom.” But this was so far in the future, I don’t think she realized that the inn would not fit in the back seat of her car. As I became more and more committed to the process of building the ranch, Emily expressed more and more resistance.
Finally, we were in a bit of a jam. I couldn’t go forward without her support, and I was not going give up on the idea.
Emily, being a class act, came up with a solution: I would buy her stock. (She could work for a company that had an inn, she just did not want to own a piece of such a company.)
Her offer was very generous — she used the book value of the company and gave me a three-year payment plan. In this act, she made it obvious that she cared more about my dreams and our friendship than she cared about the money.
I am now the sole shareholder of Big Nerd Ranch, Inc. Emily is still my boss and my dear friend. I feel very blessed to have her in my life.
Wow, what a great solution! Silly Emily to sell her stock, though. But if that’s what it takes for her to have integrity, more power to her.
Emily is a total class act. And a great sense of humor. And that’s a great portrait of her.
Em is a truly amazing and wonderful creature, that’s for sure.
I hear she is a great cook too….
My father collected examples of “self-correcting heuristics.” The archetype is simple: cut first, choose last. For example, when his three sons wanted to share a pie, the one who cut the pie into thirds was the last to choose his piece. The other siblings invariably took the two largest pieces, giving the pie-cutter a strong incentive to cut fairly.
Another example, which can be included in all partnership contracts, is that whenever a partnership is being dissolved, one partner has to name a price. The other partner gets to take either end of the offer, either buying out the price-naming partner at the named price, or selling to the price-naming partner at the named price. Because the price-naming partner could get stuck with either end of the deal, they have a strong incentive to name a fair price.
For what it’s worth.