Pay It Forward / Not Zero Sum
October 3rd, 2007When a community makes an investment in you and, as a result, good things come to you then you have an moral obligation to feed back into the community that supported you.
This evening, at an informal meeting of tech entrepreneurs, I witnessed a counter example of this pay-it-forward principle that really took the wind from my sails.
One of the attendees, the founder of a local startup, sat down and informed me that he was, “sitting on a bunch of investor money.”
Over the last year this guy has taken all the free help available in town. Attorneys, executives, founders of other tech companies, branding people, developers, marketing people, rainmakers, mentoring, speaking spots are events, the works.
On top of that, he’s been teaching MBA students and — get this! — he has them write business plans for his startup. He credits the MBAs with developing business plans beyond what he could have thought of on his own. I appreciate the hutzpah, actually, but read on.
Our entrepreneur had been working to raise money for a while and I was pleased to hear of his success, particularly given that his company is based here in Minneapolis/St. Paul. I spent 6 years in San Francisco because it was so much easier to raise money there; my immediate reaction to his success was, “This is great, how can we duplicate it?”
Whenever someone raises money, and more to the point when they go out of their way to tell you that they raised money, the next two questions are, “How much?” and “From whom?” Those are universal. It’s part of the social contract. It’s expected. It’s even encouraged. When someone makes an investment in you, you share a mutual pride; you’re standing together, planting a flag and saying, “We mean to make something special here.”
He responded to the how-much question with a sizable figure. You will, however, understand my reaction — flabbergasted! — when he stonewalled on the from-who question with, “I’m not saying.”
Me, “What? You’re not saying?”
Him, “I’m not saying.”
Me, “Why on earth not?”
Him, “I’m not saying.”
Me, “You’re kidding, right? <Name>, it’s not like a lot of deals are getting done here. We need to feed the ecosystem, to duplicate this success.”
Him, “I’m not saying.”
Me, “Are you worried they’re going to take the money back? That they’ll be inundated with deal offers? What?”
Him, “I’m not saying.”
At this point continuing the transcript reaches the point of diminishing returns. We’d entered a conversational black-hole from which nothing could emerge. I did tell him that I thought that he was acting stupidly. You can fill in the rest yourself.
The whole conversation stung. Here’s a guy who had taken all that was offered, gained from it, and flatly refused to close the loop. The arrogance of this guy taking on a “gatekeeper” role floors me.
This position might be understandable if it was somehow “value-maximizing,” but it’s not. First, this isn’t a zero sum game. Second, Robert Axelrod’s “The Evolution of Cooperation”, demonstrates that your best course of action when deciding whether to (a) do good by someone or (b) screw them is to give them the benefit of the doubt in your first interaction and then to play “tit-for-tat” with them. If they’re good to you, you do good to them. If they’re bad to you, you do bad to them. This guy’s actions have put him into the “bad” camp, so he deserves to be screwed.