Just to clarify, what I mean by mixing money with friends is when you and a few friends start a venture that becomes profitable. I’m not talking about when you go out to eat with a friend and split the bill, or when you go on a trip with a friend and split the cost of the trip.
I’ve been thinking about this a lot lately, and I wanted to share my thoughts on the topic. I’m not sure if this is a common problem, but I’ve seen it happen to a few people I know. I’ve also seen it happen to me.
background
Back when NFTs were a big deal, a few friends and I started to run a few crypto projects on Ethereum. We had run a few projects before, but none of them were crazy successful. It was enough to pay for a semester or two of college (they went to pay for hospital bills for me though 😅), but not enough to live off of.
fun fact, ☝️ I actually own this NFT! At the time of mint, it was worth ~$75. As of writing, it’s only worth $1.43.
We made a few mistakes, but we also learned a lot:
- marketing
- having a competent team
- managing public-facing expectations
- timing launch date with project completion (if product wasn’t ready by launch date, not a good look publicly … especially if the project is run anonymously)
the “big” one
I guess apparently we hadn’t learned enough (hence this post). We decided to work on a new project, and we decided to do it right. We had a good team, and we were hoping to make a lot of money.
Everyone pretty much fell into their roles. Some guys were writing smart contracts, others were writing front-end, art, or marketing. This project didn’t really need all the people that we had on the team, but since we did every project together & we were all friends, we kept everyone on the team. We decided to split the profits “50/50” evenly among everyone. We thought it was fair, and we thought it would be a good way to keep everyone motivated.
Over the weeks, it was clear that there were some individuals putting in significantly more work than others, but it was always like this before. It wasn’t until a lot of public attention was focused on our project that we realized there was huge chance that it would be super successful. This caused people to start pointing fingers at each other. The “equal” contributions of everyone on the team came into question — completely understandable — by an overwoked member of the team.
If the project was a success, the amount of money involved would be life changing. If the project was a failure, we would have all been fine. We would have just moved on to the next project. But when we launched, this project was a success. We were making a lot of money. And we were all going to get a lot of money. But we were all going to get the same amount of money.
We had a meeting to discuss the situation and it turned out that frustrations within the group weren’t ever communicated well earlier to everyone, causing a bad situation to worsen to the point of no return. Some of the discussions were heated and it didn’t help that some individuals had a lot to gain and others had everything to lose. It was ugly.
At the end we decided to split the profits “50/50” but under the condition that future projects wouldn’t have been run like this one and everyone would have crystal clear responsibilities. This was a good solution with the future’s best interests in mind, but maybe it was too late. In the end, along with other extenuating circumstances, we weren’t able to run anything successful again and the team split up.
We were naive.
So, what’s the big lesson here?
lessons learned
- if you’re working on a team and you’re not comfortable with the status quo, speak up. don’t let things fester.
- make sure shit is straightened out prior to starting a venture.
- think before you fucking act.
- if you’re working on something with other people, don’t be a bitch and keep up your end. otherwise, speak up. basically just have good communication.
- a little unrelated, but be prepared to get a lawyer when a project unexpectedly goes big.
見利忘義
~ max
