THE FORE-GIVER: A powerful story about a simple business idea. Part 1

“And if someone asks, ‘Then what about those wounds on your chest?’ he will say, ‘I was wounded at my friends’ house.’”¹

Jack Davidson turned and pressed the dismiss button to turn off the alarm on his phone like he did every day for the last ten years. He stretched, yawned, and scrolled through his phone to check the weather and the news headlines—an old habit of his. He didn’t need to look at the time; it was exactly 4:50 a.m. He had set his alarm ten minutes early, enough time to drag himself out of bed by 5:00 a.m. That extra ten minutes was all his—to stretch, to roll over, or to do whatever he liked, guilt-free. It made him feel like he had some control over the all-controlling alarm clock because he was never an early morning person. He didn’t mind working until late into the night to get his work done, but getting up so early in the morning was just not his thing. But his alarm clock had become his stern schoolmaster, reminding him each morning that he had to do his “homework”—to get up early in spite of himself. He trained himself to be at work each day at 6:00 a.m. He realized ten years ago that he was much more productive when he got to the office earlier than the others did. The peaceful and quiet atmosphere helped him think more clearly and creatively. Many of his most promising ideas had come while he was alone in the office well before everyone else arrived at 8:00 a.m.

However, today was different. As he reached out to stop the alarm, he was almost glad to hear its insistent buzz, having shut it off for the last three weeks in a row. He hadn’t been to the office in all this time—too disappointed and too depressed to face life at work. Today, though, he was going back to take over what was rightfully his. He was going to fight, and to fight very hard if he had to, to claim his business back. As he got ready for work, he couldn’t help but think about the events of the last three weeks, for the umpteenth time.

Jack had always been an avid reader and always retained a special love for learning. He considered himself a student of life, reading hundreds of books on leadership, management, self-help, and personal development. He also enjoyed reading biographies of people who have managed to do remarkable things despite the odds stacked against them. When he didn’t have time to read, he listened to seminar messages and audio books on his way to and from school or work.

The idea that started it all had come to him while he was driving back from a graduate class at the Harvard Business School where he was getting an M.B.A. at the time, almost ten years to the date. He was listening to an audio recording when he had hit on an idea to launch JackedInspirations.com. He reasoned that he could not possibly be the only one who appreciated the practical instructions provided by these books and audio recordings. He wondered if making such materials available to people in one single platform, at one low monthly price, would be well received. Instead of buying each book or audio recording individually, what would happen if every person suddenly had access to the best of all leadership, business, and personal growth resources available in one easy-to-use platform, neatly organized and categorized? Something like Google for business and personal development resources.

Excited with this idea, Jack drove straight to Mike Orwell’s place at the Soldier’s Field Park apartment complex, instead of going to his own apartment. Mike was his classmate and his best friend. Jack couldn’t help but smile as he recalled the way in which he had barged right into Mike’s one-bedroom apartment without even knocking. He proceeded to paint a rosy picture of the kind of difference they could make if only they could launch JackedInspirations.com. Jack was always the idealist, the dreamy let’s-change-the-world person, while Mike was always the practical and analytical type. Mike had listened patiently even though his preparation toward a business accounting exam the following day had been abruptly interrupted. When Jack finished, Mike had only responded by asking, “What would the financials look like?” Financials? Jack hadn’t even thought about that. He was much more interested in the possibilities of this idea than to have thought about financial issues. He knew that he could trust Mike to focus on the financials. Mike was a moneyman through and through. It wasn’t surprising that his areas of concentration included both accounting and financial management.

Once the issue of money came up, Jack remembered that his father had bequeathed to him a retirement fund of almost $3.2 million when he passed away two years earlier. As a real estate investor, his dad had accumulated a modest amount of wealth before his death. Jack had been too saddened by his parent’s passing that he had not even given much thought to how he might invest the money. Right there and then in Mike’s apartment, he made up his mind to invest all of it, if he had to, in this new venture. For him, it made perfect sense. It would help lots of people, and in the process, he might even make himself richer, too. Therefore, Jack reassured Mike that the initial money to invest in the business wouldn’t be a problem. By the time he left Mike’s apartment that day, he had a gentleman’s agreement with Mike to form JackedInspirations, Inc., and formalize the agreement later through their attorney. Mike would spend time running the numbers and coming up with a solid business plan they could follow in terms of financial implications. As the executive vice president, Mike would serve both as chief financial officer and as chief operating officer. In return, Mike would own 20% of company equity. As the chairperson/president, Jack, on the other hand, would be the majority owner with an 80% stake, provide all initial financial investments, and oversee leadership, strategy, and product development.

With characteristic gusto, Jack and Mike both invested themselves in building the business immediately after graduation from Harvard Business School. They hired a software engineer who helped code and build their website from scratch in record time. At that stage, they did a lot of outsourcing using independent contractors. Nate, the in-house programmer, came up with the complete design, hired five additional programming engineers, and paid them on a contract basis. It was amazing what a good fee could accomplish. They delivered a fully functioning site in six months. Meantime, Jack and Mike had also hired Mandy, a gorgeous, no-nonsense marketing professional from Wharton Business School. It was her job not only to develop and to build a business-to-business relationship with the top providers of media (print and electronic) content, but also to recruit individual and corporate subscribers. It was Jack’s duty to work with Mandy and with Nate to get their jobs done. Their roles were crucial to the survival of the company. In fact, unless they developed a once-in-a-lifetime, user-friendly, and highly intuitive website for their subscribers, there was no business. Jack practically lived at the office during those first six months. Gradually, their efforts began to pay off. The site was live and working well. They were also able to sign up 200 content publishers with premium content fully loaded and ready to go.

The next assignment involved recruiting users. Mandy proved to be the best person for the task. She gave it her all. Jack poured more money into the venture too—a total of $3.0 million from his inheritance. It was such a reckless gamble, both his family lawyer and Mike had told him, but he was convinced about what he wanted to build. Gradually and steadily, people began to register and to use JackedInspirations.com. The New York Times did a piece on their innovative platform. Soon, it was picked up by many other news outlets including The Washington Post, USA Today, and The Wall Street Journal. By the end of the second year of the site going live, and exactly three years from their official launch, JackedInspirations.com had 250,000 active subscribers and was growing by the day. Everyone seemed happy with their progress, except Jack. While he was glad that they were growing steadily, he was also sure that there were many more people out there who could benefit from their platform. His ambition was to build the largest subscription-based online community around a powerful idea—the idea that developing one’s self is fundamentally important to success. As far as Jack was concerned, this wasn’t about making money, although it helped that they were already bringing in over $12 million in gross revenue by the following year. Jack continued to push hard for more subscribers, and he aggressively reinvested their income into the business. By their fifth anniversary, JackedInpsirations.com boasted 1.5 million subscribers.

With a strong balance sheet and with a growing subscriber base, Jack and Mike were ready to bring in investors to raise even more funds to take the business to the next level. Jack wanted 10 million subscribers in the next five years, and to achieve that, he needed a large cash infusion that he and Mike alone couldn’t afford. Yes, they were already successful and could easily retire at this stage. In fact, that was exactly what Mike had pushed for—to sell the company now and to head out with cash that they could use for whatever they wanted. However, Jack stood his ground. He had offered to buy Mike’s share if he wanted out. He had big plans for this site. His ultimate goal was to build a community of at least 100 million active users and then to go public. First, he had to get to 10 million subscribing members, and to do that, he needed a lot of money and fast. Jack must have sounded very persuasive because Mike eventually bought into this long-term vision.

They began their search for heavyweight venture capitalists who were sympathetic to their vision. Jack insisted that it couldn’t just be about the money—an investor who wanted to invest only because of the prospect of taking the business so far and then selling off as soon as the first opportunity presented itself. Instead, it had to be an investor who shared their vision of a dynamic online community built around the highest form of inspiration known to humans. They had some offers, and it drove Mike crazy when Jack turned them down because he didn’t think they were in for the long haul. Finally, when they were beginning to wonder if they had made a mistake by turning down the initial offers, along came George Welch and Steven Meyer. George offered a cash infusion of $50 million for a 5% stake, while Steven offered $100 million for a 10% stake. Steven was a powerful hedge fund manager who convinced Jack and Mike that he was in the investment for the long haul, as long as management was going in the right direction. Jack had some concerns about this management-in-the-right-direction condition, but he needed the money and Steven appeared genuine enough in his commitment to the core business principle.

If Jack had any reservations about his biggest investor, Steven, he felt an instant connection with George, the other top investor. George himself had been an ardent reader and student of human psychology. He had been profoundly impacted by the writings of the early pioneers of the self-help genre—Napoleon Hill, Sidney N. Bremer, and Samuel Smiles, among others. In fact, George grew up in the 40’s in abject poverty as his parents struggled to settle into a new country as first generation immigrants, but he had read Napoleon Hill’s Think and Grow Rich and Sidney N. Bremer’s Successful Achievement. These books taught him the value of thinking big and of working hard. He credited these writings to helping rescue him from the debilitating shackles of poverty. Jack was elated. He had found someone, an investor no less, who shared his love for personal development materials. He and George had, in fact, talked for hours, comparing books they had read and sharing quotes that had helped them over the years. After the investment deal was sealed, both men agreed to meet once a month over coffee to chat about their mutual interest in books, especially since they both lived in the same metro area; they to meet to this day.

Jack and Mike gave up some of their shares proportionately in order to get these new partners onboard. With the adjustments, Jack owned a 70% stake in the company, Mike owned 15%,and 15% was owned by the two investors. Steven and George trusted Jack and Mike totally to run the company. Freed to pursue his dream for JackedInspirations.com, and with a huge infusion of cash, they both hired new employees, including programmers, cybersecurity experts, accountants, and customer representatives to make sure that their online infrastructure was equipped to handle heavy traffic.

Jack and his team worked hard and pushed themselves to the limit. The goal was to recruit 10 million paid subscribers in five years, but Jack and his team achieved and surpassed that goal by their tenth anniversary, with 10.2 million paid subscribers. They were making over $500 million in gross annual income and became the darling of Silicon Valley and of the news media. All of a sudden, Jack’s name had become a household name, but he would constantly remind reporters and analysts that JackedInspirations.com still had big plans for the future.

~~~~~~~

For the last ten years since establishing JackedInspirations.com, Jack had not had a real vacation. However, with so many subscribers and enough cash flow to pursue long-term strategic goals, he felt that the time had finally come for him to ease up a bit and to take a short vacation to reflect and to do some big-picture thinking for the future. He had planned to tour most of Europe and end his trip with a visit to Kenya. His uncle was based in Kenya and had arranged to receive him, as he planned to tour some important game reserves in the area. He looked forward to this break. He made all the necessary arrangements, properly briefed all his associates, and communicated effectively with the board and employees alike. As part of his careful planning, he handed over full leadership roles to Mike for the time he would be away so that nothing would be held up because of his absence. He had built this company from day one with Mike; he trusted him like a brother. Mike had been his friend all along, and although they had their disagreements over what direction the company could go, they always found a way to work out their differences in the interest of the company. Therefore, Jack confidently wrote the board to tell them that Mike had his full confidence while he was away and that they should corporate with him fully, just like they had cooperated with him.

Before leaving, he had one more coffee meeting with George Welch, his friend, confidant, and business partner. He had pleaded with George, who had had some distrust for Mike lately, to cooperate with Mike and to make sure things ran smoothly. George promised to not only help in any way he could, but he also told Jack that he would be his ear and eye on the ground, just in case. Doubly reassured, Jack headed off to Europe on his first vacation.

Five days later, while on a flight from London to Frankfurt, Germany, Jack suddenly felt unease for no apparent reason. Once he landed in Frankfurt, he turned on his phone and noticed quite a few missed calls from George. That was unusual. George knew that he was on vacation and would not try to reach him unless it was urgent, so he proceeded to return George’s call.

As soon as Jack heard George’s voice on the other end of the line, he knew something was seriously wrong. “George,” he said, “Give it to me straight, man. What is going on?”

“The board just returned a vote of no confidence on your leadership and effectively removed you as the president and C.E.O. The board voted to have Mike replace you, with immediate effect,” George reported with deep sadness in his voice.

Jack could not believe his ears. How could this happen? He had delivered more than stellar results. Why would anyone do this to him? He trusted Mike, not only as a friend, but also as a brother. Right there, Jack canceled the rest of the trip and paid for the next flight out of Frankfurt to the United States. JackedInspirations.com meant more to him than merely a source of income—much more. It was more like his very mission in life—his life’s calling. Losing ownership of the company felt like losing an important piece of himself. From what George had said, it appeared that the current change was only in terms of leadership of the organization and not ownership. Nevertheless, if the board could do this to him, especially in his absence, who could tell what else was coming?

On arrival the next day, Jack drove straight to meet with George. Over coffee in his sitting room, George gave Jack the complete run-down. He had gotten a notice the previous day summoning the board for an extraordinary emergency session. “Mike stated that a matter of urgent importance had arisen that required the board’s immediate attention. I quickly called you, believing that perhaps you might know what happened, to get a quick brief from you before I got to the meeting. I feared the worse—perhaps a major cyber-attack had taken place and compromised members’ information. Perhaps, a major server malfunction had taken us offline. Therefore, when I did not get you after several attempts, I drove straight to the head office. I got there a few minutes early, but two other members of the board were already waiting in the boardroom—Teddy, Steven Meyer’s proxy, and Mark. I was anxious. I had asked if they knew what this was about. They all said they had no clue and were so worried that they quickly drove down immediately. However, I noticed that, for people who said they were as anxious as I was, they appeared rather calm and resolved. I asked for Mike and was told by his secretary that he was meeting with the corporate secretary and with the lawyer preparing for the board, so he could not see me. Again, there was nothing suspicious about that.”

George continued, “When the meeting finally commenced, all five board members were in attendance: Mike, Mark, Teddy, Teresa, and myself. Mike told the board that the meeting was to elect a new chairman of the board and C.E.O. of the company. He said that your management style of the company was no longer suitable to the company for the next phase of growth. He persuaded the board that while the company was trying to grow a strong customer base, your aggressive approach may have served the company well. He argued that, now, with millions of subscribers and with potentially billions of dollars at stake, a more measured, calmer, financially savvy guy was needed to give structure and stability to the company. He said it was nothing personal against you; after all, you still owned the largest share of the company. He went so far as to assure the board that as far as he was concerned, there would not have been a JackedInspirations.com without you. That guy is a snake. If he had come out like a man on a vendetta, he might have appeared mean and conniving and may have lost the vote. However, he came out as one seeking the very best interest of the company, even against his personal preference. He praised you profusely and admitted that he only called this meeting in your absence, knowing that if you were there, you might have talked them all out of doing the right thing. He insisted that it was a hard decision that needed to be made by the board right away. He also reminded the board that the company constitution fully supported what he was asking for and read the section aloud to them. Anyway, by the time he finished his fifteen-minute talk, he had won over the others. I could see it on their faces. All of my protestations did nothing to dissuade them. So, the vote was 4-1, since he voted for himself.

After the vote, I stormed into his office and confronted him about what he just did to his long-term friend and business partner. At first, he said nothing. He honestly did not seem to have an answer for his behavior. After a while, all he could say was that I would not understand if he told me. He merely reminded me that, as a co-founder of JackedInspirations.com, he had as much investment in the company’s future as anyone else.”

Jack listened with bewilderment. He was beyond shocked. If anyone else had pulled off such massive betrayal, Jack would still be surprised. But Mike? This person had been his friend. This was the same Mike he had shared his idea with in the beginning. The same Mike who was so risk-averse that he had asked to be brought onboard as a salaried employee to help run the financials of the company because he didn’t feel like the idea had much in it to risk everything on it. However, Jack had insisted on giving him a 20% stake in addition to a generous salary. This was the same Mike he had been careful to acknowledge in almost every board meeting or media interview, even though he was a junior partner in the company. Jack had shared all of his business plans and strategies with Mike because he saw him as a friend and believed that Mike would always give him honest feedback, no matter what. He had often taken Mike’s pushbacks as his way of being a good friend, providing honest and challenging perspectives that nobody else would provide for him. It never even occurred to him that Mike felt jealous and embittered about anything. But about what? This was my company, my investment, my idea, my sweat, he thought. Yes, Mike had stayed along with him all the way and played a key role in managing the financials. He was very thankful for that. Still, he could have hired any other savvy accountant if he wanted. Besides, he paid Mike handsomely with an initial 20 percent of the shares. Yet, he still pulled out this kind of backstabbing stunt against me? He did not even have the courage to do it with me in the room and to give me a chance to defend my record and myself. It made Jack want to puke in disgust. He had been warned of being too trusting and idealistic. Yes, he was a fool for trusting Mike so completely. He had even written the board asking members to fully cooperate with Mike in his absence. So much for trusting people, Jack thought.

Jack was devastated. He was emotionally spent by this betrayal, physically exhausted from his trip, and jet-lagged. He was numb. Too numb to fight. Too shocked to scream. Deflated. He simply drove back home, took a long shower, and slept until the next day, and the next. He lost all appetite for food. His wound was too deep and too raw. He was wounded by a dear friend in his own house. And it hurt badly.

Please leave a comment below. We will love to learn about your own reactions to this developing story.

Notes:

1. Quotation from  Zachariah 13: 6

2. The preceding is an excerpt from The Fore-Giver, available at Amazon: https://www.amazon.com/dp/1946277223) .