Startup CTOs #2: Tear The Contract Up
Well Done! You’ve been living off credit cards and Ramen for the past 8 months. and now, you’re ready to start delivering. Now, take that contract you just signed, and run it through the shredder. What??? ok, you’re right. That won’t do. Instead, put it in an envelope, seal it, and put it in a file cabinet. Yes, I’m serious. But, you say, it has the specs of the solution we’re going to deliver to our client! No, it doesn’t. Sorry. it simply doesn’t. What it does have is the bare minimum solution you need to deliver if you have a dispute with your client. read that again – if you have a dispute.
Contracts only exist for one reason – what to do if things go wrong. a contract is completely unnecessary if nothing goes wrong. The bank gives you $400,000 to buy a house, you pay it back at $2400 a month for 30 years, everyone’s happy. Why do you need a contract? because sometimes, people don’t pay it back. So the bank needs a way to say what has to happen if you don’t pay it back. makes sense? but wait, your contract is different – yours specifies exactly what you’re going to deliver to your client. But it doesn’t. In fact, without even seeing your contract, I can tell you what you need to do for your client. you need to make them successful. Some people would say happy, but I think happy misses a key factor – a client who drinks a lot of beer and watches a lot of football (on your dime) may be happy, but their job is not better because of what you do. So, as long as you focus on delivering to them what they need, they will be successful, and you will be rewarded.
And no, this does not mean charging less than the value of something. It means you sold them something – some service or product to help them solve a problem. whether that problem was explicitly stated in the contract or not (coincidentally, it almost certainly was not), that’s why they’re buying your product. Give them that solution, and don’t worry about the letter of the contract.
No client ever complained “man, these guys are terrible – they solved our problem, have fantastic customer service and have saved us a ton of money, but they didn’t specifically do item 13.2.3.2.1 on the contract, so let’s sue them.” Why? because you gave them what they needed. Don’t give them any reason to have a dispute with you, and the contract will never come up. Solve the problem they have, keep your client successful, and you will be successful as well.
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