8 signs your business partner is out to get you

As the editor of Hypergrid Business, I regularly hear from people with stories of projects that failed. Most of these don’t make it into print — nobody wants to go on the record in a story about things going wrong, no matter how useful or enlightening it may be for other would-be entrepreneurs.

And there are lots of lots of reasons why things don’t work out. Virtual worlds are such a new and quickly-evolving space, it’s easy to come out with a product that’s too early, or too late to a market. Or to have problems with technology. Or to have trouble explaining the benefits of your products or services to customers who could benefit a great deal — but can’t get past the whole “virtual” part.

In most of these cases, there was no way to know ahead of time that the project was going to fail. The only way to find out was to go ahead and try it. And even it failed once, twice, three times — it could still work for someone else in the future, at the right time, with the right technology, the right customers, or plain old luck.

But sometimes, the project fell apart because of a bad partnership. The trusted business partner turned out to be no so trustworthy after all, and doomed the business.

You can't always recognize criminals by their masks and guns. (Still from the movie Point Break.)
You can’t always recognize criminals by their masks and guns. (Still from the movie Point Break.)

I myself have been in a position where I put my trust in the wrong person, and was burned as a result. The easy reaction is to say, “I’ll never trust anyone again. I’ll run everything myself. I’ll be the sole owner and sole decision maker. I’ll micromanage everybody.”

But it turns out that there’s an alternative, and I came across it in a book with the super-cheesy title of “Life Code” by Dr. Phil McGraw. Yes, Oprah’s Dr. Phil. Although couched in a writing style and approach that seems suited to a daytime talk show, there’s actually some useful stuff here, based on McGraw’s experience as a business consultant, among other things. Who knew?

The good stuff is in the first half of the book, about how to identify bad guys, and spot the techniques they use to manipulate you and con you.

In retrospect, all these warning signs were there for me, but I didn’t recognize them at the time. With this checklist, I now have a tool for evaluating potential business partners or key employees. I can go ahead and rely on people, but if they ring any warning bells, I’ll know to stop and do a more thorough background check.

It’s Reagan’s old “trust but verify” motto in practice.

So here are eight warning signs you might be dealing with someone who can’t be trusted. If you come across one of these signs, investigate. There could be a reasonable explanation, or it could turn out to be the tip of an evil iceberg and you’ll have saved yourself a lot of grief, and spared yourself the agony of having a business go under before it even had a chance to prove itself.

1. Sense of entitlement

Some people believe that they are meant to be great, and if they work hard for it, they will get there. Other people believe that they deserve to be great even if they don’t work hard and that people who do work hard are just schmucks. To them, you are the schmuck, and they’re happy to let you do all the work while they step in and take all the profit.

Maybe they had too much self-esteem as children. These people think that they are entitled to get what they want. They’ll lie, cheat, steal and be proud of it, too. As long as they get their way, they are winners.

You can spot them because they think that they are better than other people. They demand trust and respect without having earned it. They’re unhappy when other people have success that they don’t, and accuse them of having cheated their way to get there.

The clever ones will try to disguise this attitude because they’ve learned it doesn’t play well, but it will still come out.

For example, they might say that they were almost successful in their previous business, but their former partner sunk the ship. Now, with you, they can finally build the kind of company that they want to build. They will make you feel sorry for them, that they haven’t been able to achieve their dreams. They will tell you that the did everything right, that they deserved to be successful. And they are completely convinced that they will be.

Now, every entrepreneur has to have some degree of optimism and confidence — otherwise, they’ll never get anywhere. But if it goes too far, into entitlement, especially at the expense of other people, do some digging. Did they really do everything right in their former business, or did they screw everything up, while the partner actually did all the work?  Do they really care about the business plan, or is it just their stepping stone to quick success, and they’re just echoing your enthusiasm back to you?

2. No empathy

Do they feel bad for someone who is suffering? We might all laugh at pratfalls, but once we see that someone is actually in pain, we’ll stop and help. Empathy is what keeps us from royally screwing over our customers, employees, business partners, and investors.

When they suffer, we suffer with them.

But some people just don’t care.

When my old company went out of business, I suffered a lot. Okay, there was a blow to my ego, but you recover from that quickly. What still bothers me was having to lay off my employees. I had to fire people who trusted me, because I messed up. Okay, the financial crisis didn’t help, but, at the end of the day, it was my company and my responsibility for how I reacted to the downturn.

The fact that other people had to pay for my mistakes still bothers me. A lot.

Most human beings would feel the same. You forget your own pain much more quickly than the pain you caused others. I don’t like awake at night revisiting the pain of childbirth or of back surgery. But the expression on a friend’s face when I accidentally said something that really hurt — that stays with me.

The guys who want to stay away from are the ones who are exactly the opposite. They feel every slight intensely, but are completely obvious to the pain they cause others. They’ll be oblivious to the pain they cause you, your customers, your employees, and your investors.

Worse still, they’ll tell you about all the miseries that they experienced, in order to get sympathy out of you. They’ll screw everybody over, and then rub salt in the wounds by trying to sell you a sob story. To them, empathy is just a weakness in other people, a weakness to be exploited.

Pay attention to how they treat people who are less powerful than they are. Do they walk all over them without a care? Are they willing to lie and manipulate to get what they want, without taking into account the suffering they cause? Do they try to pass of this attitude as being business-savvy? Do they tell you that you have to toughen up to be in business, and make you feel bad for actually caring about your employees or customers?

You don’t want that kind of attitude anywhere near you. It’s poison.

3. No guilt, no remorse, no lessons learned

Most of us, when we do something wrong, we feel bad. That feeling inspires us to try to do better next time. To plan ahead for economic downturns. To set aside reserves.  We learn from our mistakes.

The toxic people you most want to stay away from don’t learn from their mistakes. They don’t feel sorry for what they did. They blame everyone and everything but themselves.

You can spot them by the fact that everything bad that happened in their life was someone else’s fault. And also by the fact that they have a hard time giving an honest apology.

“I’m sorry, I was wrong. I won’t do this again. Meanwhile, what can I do to make things up to you?”

That’s what a real apology sounds like.

A faker, instead, will say something like: “I’m sorry you took that the wrong way.” Or: “I’m sorry you feel that way.”

In effect, they’re blaming you for the mistake.

People who can’t take responsibility, who feel no guilt, who think they’re always doing the right thing have no reason to learn from past failures. And they won’t change.

Someone who always has an excuse for being late, each excuse less believable than the last, will never learn to leave for a meeting a few minutes earlier. They’ve convinced themselves that the problem wasn’t their procrastination, but the traffic, or the weather, or the football game, or the school bus, or the flat tire, or that one red light they hit on the way over.

Be careful not to confuse this with saving face. You might be late for a meeting because you lost track of the time, but lie and blame the traffic — even though you know it was your own fault. If you get caught in the lie, you’ll be embarrassed. Most people will make up excuses at one time or another. But they don’t actually believe those excuses, and when pressed, might cough up the real reason.

The fakers believe their own lies, and make the same mistakes again and again.

4. Self-destructive tendencies

Toxic people take the short-term view, going for quick self-gratification. They’ll lie to the customer to land the account. They’ll lie to an employer to get a job. They’ll lie to coworkers to steal their work. They’ll lie to investors, they’ll lie to you. And, at first, their tactics might seem to work. They land the customer, the job, the credit for work well done, the investment money.

And then they’ll lose it all again. They’ll ascribe the win to their own cleverness, and the loss to external factors.

Over and over again. Eventually, everyone around them will catch on to the pattern, and start distancing themselves as much as they can.

5. Love of drama

Some people get involved in drama against their will, and do their best to reduce tensions. Some people get caught up more than once through unfortunate coincidence.

And some people have drama and crisis circling around them everywhere they go.

Of course, it’s never their fault. It’s always other people.

Check with the other folks involved and find out whether they’re just spectacularly unlucky, or whether they like to stir things up.

Related behaviors include angry fits and temper tantrums. Some folks don’t mind leaving scorched earth behind them if they don’t get their way.

Imagine the kind of damage this can cause in a company.

6. Proud of their scams

None of us are perfect. We sometimes treat other people badly, fib on our taxes, put a positive spin on our resumes. And we usually worry about it a bit, try not to broadcast it around.

Folks who don’t think they did anything wrong, and don’t sympathize with their victims, see successful scams as just that — success. So they have no problem bragging about it.

They’ll brag about cheating on their taxes, their spouses, service providers — anybody and everybody. If they cheat those guys guys, they’ll cheat you.

7. Short term relationships

Scammers tend to go through partners like potato chips. They sound great when you first meet them. They can be very persuasive, charismatic. They’ll flatter you, listen to you to find out what you’re looking for, then tell you exactly what you want to hear. They’ll sound too good to be true.

But they can’t deliver, so the partnerships end quickly.

Unfortunately, in the virtual worlds space, people like this can simply create new identities and move on.

A good rule of thumb is not to do any real business, not to invest any more money than you can afford to lose, with people with no history and nobody who can vouch for them.

8. Delusional fantasy world

We all want to live in a fantasy world where we are the heros and can do no wrong. Some people actually do live there. Some are so convinced they can actually pass a lie detector test.

That world can be extremely appealing, and you might be tempted to join them. That world might even be crafted deliberately to draw you in. These delusions can include delusions of grandeur.

Unfortunately, when a delusion meets reality, reality usually wins.

The average person — say, someone with a dream they want to make come true — can adjust to setbacks. If my dream is to become a ballerina, but I’m a 50-year old out-of-shape guy, I will probably soon realize that this isn’t possible. But I might write a novel about a ballerina heroine, I might become a choreographer, open a ballet school, help fundraise for a ballet company — I can adjust my dream in many different ways.

A delusional person, however, would ignore reality and continue with the fantasy.

To the degree that this fantasy touches on your business, it will be a cancer that eats away at any potential for success. Events that contradict the fantasy will be ignored or explained away. People who try to bring in a reality check will be undermined or driven away.

Nobody needs that in a business, especially a risky cutting-edge technology startup.





Maria Korolov