Common wisdom says to never get into business with or loan money to your friends because you’ll lose your friends. I got into business with two friends—Randy and Jim. The common wisdom is wrong. You’ll lose only half your friends.
Jim was one of a special group of friends I made at Mississippi College. This group of friends made a huge difference in my life. You can read more about this group here.
Jim lived directly across the hall from my dorm room. Other than my roommate Randy, I may have spent the most time with Jim. (Remember Randy; he comes up later in this letter.) I think it’s because he was always friendly and approachable. I was deathly afraid of being seen as foolish or an outsider in our group. I was rarely treated this way, but that’s the way I saw myself. Jim had a way of getting me out of my absorbed self and into relationship.
I remember bringing Jim a just-released Peter Gabriel album, an actual vinyl record we played on a turntable. He really liked one of the songs on the album and started dancing around the room, hopping first on one foot and then the other. It’s this kind of spirit and serendipity that attracted me to Jim’s personality. He did things I was too self-conscious to do.
He had a bird in his room, a cockatiel. We could teach it to speak. It learned to mimic the sound and timing of the telephone well enough to fool us into thinking the phone was ringing.
Once I was on a date with my future wife Jamie. It was late and I hadn’t come back to the dorm. So he called me to make sure we weren’t doing anything we might later regret. He didn’t need to worry, but he was thoughtful to check up on me.
One of my college courses was in microprocessors. This was programming at the lowest level. My “computer” was a circuit board that included a central processor, a row of LEDs, a speaker, a memory chip, a rudimentary device to load binary numbers into memory, and not much else. We had to write a program, convert it to binary, and enter it by hand into the memory chip.
We wanted to play a song on the speaker. We could write a program to buzz the speaker at a certain frequency to play a note. We knew what frequencies corresponded to certain notes. But what song would we play? We settled on the Pac Man “intermission” ditty. If you’ve played Pac Man, you might remember it.
Jim was a music major, and I had heard that he had perfect pitch. So we asked him to write the notes of the Pac Man song. This he was able to do, and he helped us load the song into memory and play the song.
I don’t know if this was the motivation for him to switch majors. I only know that shortly thereafter he started taking computer science courses.
Jim transferred to a different college to finish his degree, and I moved up to Virginia to work as a civilian for the Navy. Randy was already there, and he recruited me. Jim joined us in 1986.
Over the next few years we all got married. Jim married Robin, and I married Jamie. Randy and his wife Cindy moved to San Antonio.
In 1986 I started a business writing a computer program for income tax preparers. Within a few years I could afford to hire a few people. I hired Jim as a programmer. Later we hired Robin’s sister.
In 1989 I recruited two major partners. I wanted Randy to become Chief Operating Officer, and a guy named Al was to be our V.P. of Marketing. With Jim and I in Virginia, Randy in San Antonio, and Al in Orlando, we had to find a common city in which to locate our business. So our little seven-person company went on the road in search of our new headquarters. We chose Rome, Georgia.
Business boomed, and we quickly outgrew two offices. In time we had a few hundred employees. Things stopped being so much about our friendships and became more about business. Al, Randy, and I were the three partners, the “three amigos.” I hardly noticed when Jim started to feel disaffected and unappreciated.
By the mid-1990s, I was burned out. Jim was ready to leave the company. A few others were ready to join him.
I found out later that this happens from time-to-time with mid-sized businesses. But it had never happened to us before. Randy and I in particular saw it as mutiny, insubordination, and a betrayal of our friendship. Never mind that we had taken his friendship for granted for a decade.
So when we suspected that Jim was planning to interview with a competitor without letting us know, we lawyered up. Jim had signed a non-compete agreement, and we told ourselves we had a right to protect ourselves. It was complete emotional over-reaction.
We could have just let him and the others go.
Instead, I’m ashamed to say that we hired a private investigator to follow Jim to his interview in Washington state. I’m pretty sure the investigator illegally recorded Jim, but he the PI didn’t admit it so it didn’t bother us.
When Jim got home, we summoned him to our attorney’s office, grilled him for hours, fired him, and confiscated his work computer. Is it any wonder he made it as difficult as possible for us after that?
Our resulting lawsuit to attempt to enforce our non-compete agreement was fueled by our anger and wanting to win at any cost. By any cost, I mean to say that we spent over a half-million dollars in attorney’s fees on our suit and a counter-suit that Jim and the other former employees filed seeking overtime pay.
I want to pass on a valuable lesson in the event you, dear reader, ever want to sue somebody. Don’t ever file a lawsuit because you’re angry. For every document you file pointing out the other guy’s outrageous behavior, he gets to file a document claiming that your behavior is even more outrageous. Yes, you get to drag him into a deposition and have your attorney grill him. Then he gets to do the same to you… and to your family, your friends, and your coworkers. Then the other guy’s attorney starts acting outrageously and you start to hate on him too. Lawsuits keep your emotions alive for years until it’s time for the trial and the anxiety overtakes you.
Near my home was a billboard rented out by a personal injury lawyer. The billboard said, “Injured or angry?” Having to pass this billboard every day was my penance for filing the lawsuit in the first place.
It was two weeks before trial. None of us wanted a trial, and yet we were entrenched in our positions. Somehow, some way, Jim and I realized that we’d have to get the attorneys out of the way and try to settle this ourselves, one-on-one.
Jim called me and we hashed out an agreement. I still remember it as one of the most difficult and stressful moments of my life. There were so many things either of us could have said, wanted to say, that would have blown up the conversation. Every word was deliberately prepared and carefully delivered. But somewhere, underneath all the animosity, a fragment of our underlying friendship still existed. It had to be Jim and me in that conversation.
In the end, only the attorneys won. We gave the former employees enough money to pay off their lawyers and Jim gave us his stock in the company. We figured that Jim would still find a way to work for our competitor, but we were done.
In the divorce, Randy and I got the mutual friends. Or at least summer visitation rights. Five families from our college group had been meeting every summer for years. Jim and Robin stopped coming. Perhaps they were willing to step aside for the good of the group, and to continue to step aside every year thereafter. For Randy and my part, we resolved not to force our mutual friends into the middle of our conflict with Jim. This letter is the first time our mutual friends will know most of these details from me.
About 11 years ago Jim’s father died. So when Randy lost his father under similar circumstances, Jim attended Randy’s father’s funeral. The two of them re-bonded over their respective losses. When our mutual friend Greg told me about this, I expressed that I was open to seeing Jim as well. But I didn’t know when the opportunity would present itself. Then Jamie recently reached out to Robin. When I started this project, I knew I couldn’t continue to put it off. I’m sorry it took a kick in the pants to seek out reconciliation.
Jim, for all of the above, I am truly sorry. I acknowledge that I treated you unfairly. I don’t want it to remain between us. I don’t deserve your forgiveness. Whether you forgive me anyway is up to you. Know that I’ve valued your friendship over the years, and I hope we can move forward as friends.
So much to say, where to begin? Steve made this much easier for me by telling the story first, but I think the best way to start a response is to say that restoration and forgiveness are incredible gifts he has given me. I deeply regret how my choices hurt him and his family; his forgiveness is a blessing that I will cherish forever. It is with great joy that I say all is forgiven and forgotten.
Steve was really wise to begin his post with the origins of our friendship. While I certainly remember those events, there also is a sense of discovery in that only now am I aware of the lasting impression that some of those moments made. In that spirit I want to share my perspective on the same events in his essay, from how our friendship began and all the way up to the present.
I first met Steve and Randy at the beginning of my freshman year, I think it literally was the first week. There was quite a buzz in the dorm to go check out their room. In order to maximize floor space in their room they had disassembled the bunk beds, moved the dressers and desks, and then rebuilt separate bunks with the legs on top of their dressers and desks, and they used milk crates to stabilize and level everything out. You could almost play basketball in their room with that configuration. You might ask “how did they turn off the light switch at night?” They tied fishing line to a washer and fit the washer over the switch lever and then mounted screw eyes strategically along the wall to a point next to the bed. Then they ran the fishing line through the screw eyes and tied equally sized weights, one to the line end next to the bed and the other to the end just beneath the switch lever so that you simply lifted the nearby weight to turn off the light, or tugged gently on that weight to turn the light back on. Marvelously clever.
Our friendship really gelled when our group all relocated to the same hall after our freshman year. Things that influenced me most about Steve included the music he liked, his computer projects, and his infectious laugh. I hope I haven’t misplaced these details, but I seem to recall Steve sharing during a late night talk that his family had relocated from Ohio to Mississippi just before his senior year of high school. I knew that had to be a really tough transition for anybody, but Steve had handled it. He also had the heart of a teacher. My participation in a couple of his micro-processor projects led me to try out a programming class, and his ability to show me quickly the programming techniques of functions and linked lists sealed my interest in computer science and enabled me to enjoy a very fulfilling career.
Steve, Randy, and our shared friend Greg had all moved with their spouses to northern Virginia to work at a naval base, and I was bound and determined to join them there when I graduated. Amazingly, that naval base sent a recruiter to a job fair at my university during my senior year, and the recruiter and I hit it off really well. On to Virginia, where I found the most amazing girl. She and I got married, and our wives bonded just like all of the guys.
I enjoyed doing defense work, but it was the early 1990’s, the personal computer industry was exploding, and I was hoping to find something in that area. Steve had determined that electronic filing of income tax returns was going to be a very big thing, and he had begun one of the first businesses to fill that niche. He was bringing Randy in to manage operations and he invited me to be a programmer. He even gave me an ownership stake in the company.
Right out of the gate, Steve had given me a tremendous responsibility of developing the software that managed the refund anticipation loan process…if a tax preparer had software that allowed them to offer these loans, their customers could get their taxes prepared professionally for no money down, the bank would allow the tax preparer to print a check for their refund (less the tax prep fees) in only a couple of days, and the IRS refund would go to the bank to pay off and close out the loan. The work to develop and test this required long hours but I pulled it off and it was exhilarating.
I will take a moment to go down a side road in this story: the PC industry today is highly standardized with entire organizations devoted to defining and enforcing the standards for the Internet, wireless communications, networking protocols, and more, but in the early 1990’s it was more like the wild west as companies offered competing ideas for similar technologies. At that time, laser printers were emerging as the clear replacement for dot-matrix printers, and HP seemed to offer the most promising long term laser printing models and features, including the ability we needed to print a digital image of the required bank officer’s signature on the refund check. It would have required a lot of programmers (and a lot of technical support) to support digital image printing on the wide array of dot-matrix and laser printer manufacturers available at that time, resources we didn’t have. So the company made the decision to allow the tax preparer to print refund checks only if they used laser printers that supported the HP printer control language, and I developed the check printing software to that standard. Then, on the Friday in January the week before the IRS would allow us to start sending tax returns electronically, our VP of Sales came in and said he could land a whale if I could extend our check printing software to work with the dot-matrix printers used at all of their locations before the start of filing at the IRS. I worked my tail off over the entire weekend and got it working, and he indeed landed that whale. This is perhaps the incident where my ego began to get in the way. To my mind at that time, all I got was a private attaboy. I felt that my extra effort had enabled a really big sale and some kind of bonus would have been appropriate. It never crossed my mind that Steve or Annette had been delivering far more substantial programming solutions for months on end, I thought I was being taken for granted.
Back to the main story. Steve and Randy were right…the refund loan process was hugely successful with taxpayers and because of our innovative software and quality customer support the company grew explosively year over year, regularly landing pretty high on the annual lists of national publications that cover the most successful small businesses. But my ego found ways to put a damper on all that was good…I determined I was the only shareholder that was not on the board of directors. Of course it never occurred to me that I had no qualifications to serve on the board, I just concluded it had to be a conspiracy against me. In retrospect I do believe I could have handled more responsibility with software development and that I was worth more money than I was paid, but I never pursued discussions to achieve those goals in a compelling manner. Ultimately I was fired when I interviewed with another tax software company, that other company hired me, and that led to the legal battle Steve described.
None of the lawyers on either side of the table were interested in negotiating what was best for anyone, they simply wanted to beat down the opposing lawyers. Depositions were needlessly cruel, any decision would be vigorously appealed, and strategies became more and more ridiculous over time. While I struggled to understand the logic of the decisions that went against me, I had a growing realization that all of the attorneys would happily be slugging it out for decades if their fees continued to be paid. Hoping that Steve was reaching the same conclusions, I called him directly to make a deal, and thankfully he was willing to talk it through. While we were able to end the legal processes, the damage to our personal relationship was done and we had no further contact for over 20 years. The break was excruciating for me, and I know it was for him as well, compounded by the realization of how my choices also ended the friendship between my wife and his, and seeing our mutual friends not choose sides per se, but how they also were innocent casualties of the fallout.
I am embarrassed to admit that it took years for me to realize that it was my ego, my selfishness, my choices that caused this to happen, but eventually my self-righteousness gave way to genuine regret. I mentioned this to our mutual friend Greg and wished there might be some way that I could tell both Steve and Randy how sorry I was. He knew our friendships had been practically totaled and he asked me what I would do if they wouldn’t forgive me. I said “I don’t care. I have forgiven them and all that matters now is to tell them how sorry I am.”
I got that opportunity, and it came about in a way I consider to be Providential. I lost my father to cancer, and a few years later Randy lost his father to cancer as well. That shared experience led to our reconciliation, which in turn encouraged Steve to make contact with me, bringing a happy ending to what are my greatest regrets.
We’ve got a lot of catching up to do, and I get to hear that infectious laugh again!