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MenuIs it a good idea to work with a remote business partner in the e-commerce space?
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It really depends on your relationship with this person, which I didn't think you mention. Do you know him and trust him?
If you trust him that's fine. The only issue I see is the time zone difference, you'll just have to work it out between the two of you.
You could ask yourself this question: Do I really need a partner? Partner relations as it is are difficult to manage for most startups but having one on a remote basis will make it even tougher.
I personally think that avoiding partnerships unless they are absolutely critical is a good idea.
You could hire someone as an employee or you could hire someone with an understanding that he gets some equity but is not a part of the decision making process.
Feel free to try a 15 minute call to discuss more:
"Mutual benefit" is the main idea, must be in the mind for every step of the designing of the partnership.
There is no certainty of viability, need many factors for consideration
~ Is it really viable?
Distributed teams are very common. If you are startup is not having to deal with shipping/receiving or if onsite events are not critical; then there are plenty of proven examples where a remote team is viable.
~ Will it be harder to bounce ideas and be innovative?
As long as all stakeholders communicate regularly and a system like Slack or Discord is adopted, it shouldn't be.
~ Will this kill momentum?
Only time this might is around an actual product launch where timing is critical for success. Otherwise it shouldn't impact anything.
~ What are your immediate concerns?
My only concern would be that adoption is key. If you both are unfamiliar with or haven't adopted agile methods for remote work, I think there will be some growing pains. But if you both commit fully to the process and the project, being remote shouldn't slow you down.
Nothing, not even video conferencing will replace face to face exchanges. Make sure you connect regularly face to face to keep the relationship tight and to make sure you are in control or at least aware of what is really happening when you are not present.
Related Questions
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Do co-founders decide everything together or does the CEO call the shots?
Hi! Partner disagreements happen all the time. The good news is, most of the time, they are disagreements that get resolved for the better. I'm a business performance expert, a CPA, a CGMA and highly experienced at leadership and managing companies. Allow me to suggest some options for you. This looks like you and your partner need to reach an agreement on how to operate the company. You can do this verbally or you can do it in writing with an operating agreement. I suggest you get this agreement in writing. The results you seek are to clearly define, and understand between both of you, the way both of you may smoothly run the company. Operating agreements may have many different segments in it including (but not limited to) defining everything from who has an operating role vs who doesn't, your responsibilities, how the company ownership and profits are split, entry and exits of partners and even the method of accounting chosen. Once you decide with your partner who has authority regarding your product direction, the person responsible should provide good leadership to see the products are well developed, and the other should follow their respective role as agreed and defer product development decisions to the other. If one partner breaks out of the agreed role, you should have a private, positive conversation with your partner to set your boundaries and remain in your agreed roles. When this happens, you need to have this conversation within a reasonable amount of time after the disagreement. Don't be afraid of what they think, because your product and your company are at risk. Just be respectful and let them know they crossed the line and ask that they step back behind it. I hope this helps! Please feel free to call me if you need help with this operating agreement, including a sample for your reference. To prepare it, you can expect you'll need a legal expert and a business expert to contribute to your desired operating agreement. Best of Luck! Rodger Stephens, CPA, CGMA Business Performance ExpertRS
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I want to start an ecommerce business that imports goods from India to sell in the U.S.. Where in the world do I start re: tax/legal implications.
TAX is US. For export paperwork (free tax delivery) is India. Use business location may in delaware for lower state taxML
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How to deal with co-founders that aren't pulling their weight?
I feel your pain — I've been there several times in a couple of my companies. Each situation ended up being unique, and had to be handled differently. I think there are a few things to consider before you make your decision: -- 1. What is in your cofounder's way? Is you cofounder being held up by a lack of clarity? Lack of motivation? Lack of autonomy? One of my past cofounders was very good at getting the job done, but didn't naturally have the skill to lay out tasks in a manageable way. To get around this, I worked with the whole team (4 people) to write up process documentation that removed the need to "figure out what to do next" that was tripping up this cofounder. -- 2. What job was your cofounder brought on to complete? And is it being completed? One of my companies brought on a cofounder simply to give us a marketing platform — he had a huge online audience — but he did nothing else. At first, this caused tension; once we had specifically laid out who was on the team and for what purpose, it was easier to identify where responsibilities lay. -- 3. Is your cofounder capable of doing the job? One of the more painful ordeals I've gone through in business is bringing on a good friend, then realizing that — despite his talent and intelligence — he just wasn't able to perform the job I'd hired him for. His skills were better suited for a different job: he needs hands-on management; he works better with repetitive tasks that don't require big-picture thinking; he lacks assertiveness and confidence, which were critical for the management-level role he'd been hired to do. After I tried to clear everything in his way, it became clear the company couldn't survive if he remained on the team. I had to lay him off. -- 4. Do you just simply not like the way this cofounder works? In one of my startups, there was a cofounder who I didn't know all that well, but he had amazing industry contacts and domain knowledge. However, once we started working together it became clear that we had VERY different working styles. He drove me completely nuts with (what seemed to me to be) a very ADHD-style of planning, with projects starting and being dropped and then coming out of nowhere with a call at 21:00 to discuss something critical that would be forgotten tomorrow. I'm sure I drove him nuts, too. So eventually we ended up selling that company — it was that or shutter it — because we knew there wasn't a chance we'd be successful if we continued as we were. -- Working with other people is tricky in general. Our instinct is to assume that we're the best workers on the planet and everyone else is incompetent, an idiot, a slacker, or all of the above. Usually it's a combination of an organizational-level lack of clarity, poor communication, no processes, and (sometimes) plain ol' we-don't-see-eye-to-eye-on-things-ness. Hopefully that helps. Feel free to get in touch if you'd like to hear specifics on my situations, or if you'd like any help devising a strategy for resolving your cofounder trouble. Good luck!JL
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How should I structure my real estate partnership?
I've been a commercial real estate broker for 5 years now and have ventured into a handful of business partnerships - some have worked and some have nearly ruined me. What I find, on a surface level, is that you must absolutely share the same VALUES and MISSION as your potential partner. Having even stake in the game also helps, as it avoids one partner eventually grabbing "the upper hand". If you are not bringing cash or equity to the table, be prepared to demonstrate how your hard work can be translated into $ value. If you have more detailed scenarios or questions, feel free to bounce them off me at anytime. Cheers! -S.SD
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I'm looking to get off the Yahoo platform. Shopify seems to be nice, and BigCommerce just looks like a slightly better Yahoo. Thoughts?
Shopify is best use case for $0 to $1M ish, depending on product line, how many transactions that makes up, and if their are some custom things that are not possible on Shopify that realistically lead to huge gains that would cover more costs of a custom solution with something like magento. I recommend Shopify to everyone starting out. That's what we used at Diamond Candles up until about a $5M run rate. We were/are growing quickly so we hit a point where payoff of customizing checkout flow, add of social sign on, etc. that could not be done because of Shopify, would cover and surpass costs of a more custom option. Best to think about this simplistic example. View the ecom platform market in about 3 buckets. 1. Starting out: $0-$1M ish 2. Wow looks like you have a business: $1M-$20 or 50ish 3. You are/could be publicly traded: $50M+ Take a look at usage #'s for market share size from independent third party analytics tools from Builtwith: http://trends.builtwith.com/shop/Shopify/Market-Share http://trends.builtwith.com/shop http://trends.builtwith.com/shop/hosted-solution Just because something is found on the web more isn't the full picture. Ie. I could make a blogging platform and have a bunch of scripts and bots install it on millions of domains and I would have majority of the market for blogging platforms (ya that would take a while and isn't a realistic scenario but you can get the point). Providers dominating the different categories by companies in those areas actually doing volume and being succsessful? 1. Shopify, BigCommerce, Volusion, Magento GO, 2. Magento (varying editions), Yahoo Stores, Symphony Commerce 3. Demand Ware, GSI Commerce, Magento (varying editions) At the end of the day a good illustration goes like this. A truck and a moped are two different things. A truck is not trying to out 'moped' a moped and a moped not trying to out 'truck' a truck. They are both perfectly suited to different applications, situations, needs, and circumstances. The same goes with who you choose to handle your ecom platform. For 2-3 search for internet retailers first 500 and second 500 lists. Pull off all ecommerce companies doing between $10-$50M as an example. Use the builtwith.com chrome toolbar to tell you what platform they are using. Hire someone for $2 an hour via odesk to make a spreadsheet of everything and the make a pretty little pie chart. Now you know what each revenue volume level chooses as 1, 2, 3 preferred platforms. Option 3 as a side note but very important one, is primarily a platform and commerce as a service model with companies like Demand Ware and GSI Commerce leading the market with platform and services including but not limited to customer service for the brand, fulfillment, marketing services, website product photography etc. Their pricing models are based on gross revenue share. ie. SportsAuthority.com does $100M online this year, GSI takes 30% of that to cover everything. (I am not sure who Sports Authority uses, just an example) You can almost pick any traditional brick and mortar retailer and if they have a website where they sell things, they all do, GSI or DW are the people behind the scenes running the call centers, shipping etc. Diamond Candles, my company, who started on Shopify decided to not go with a the market dominating option of Magento for a few reasons. One of which being upfront cost for an agency or on staff magento CTO type. We decided to partner with a newer entrant, Symphony Commerce, which blends the 3rd category model of platform plus service. Rev. cut is significantly smaller than providers in category 3, but still get benefits of volume savings on shipping volume, scalable customer support that can handle rapid growth and occasional spikes without us having to worry about scaling or implementing best practices, and a fully customizable platform as a service so to speak that doesn't require us to have in house tech but where we are essentially renting part time ecommerce engineers from with resumes that list Google, FB, Twitter, Magento, Amazon, etc. So in summary. If you are <$1M in revenue just roll with Shopify. Greater than that but less than $50M ish then I would recommend looking into Symphony. If Symphony is interested in letting you in then you won't have to incur the upfront costs of an agency or implementation and you will have an ongoing partner equally incentivized i your long term success financially which I prefer as opposed to an agency model which economically is incentivized to offer a one time finished product and their revenue is not tied to my financial success. It is the closest thing to an equity partner while returning our full equity.JW
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