Picking the right business partner

Combo is one of Australia’s leading start-up IT firms. Founded in 2002, the company has posted solid growth, picking up numerous clients and awards along the way.

However, the company, founded at home by Melbourne-based duo David and Rachel Markus, was nearly derailed in its formative years by a partnership that backfired.

Combo prioritised the real estate market as a key target for its IT consultancy services, which are now mainly aimed at small- and medium-sized businesses.

At their new real estate partner’s request, Combo hired its local sales person, with a sales commission structure promised to the company.

Unfortunately, this structure wasn’t revealed to Combo for several months. During this time, Combo’s founders say that they worked “in good faith” without commission, anticipating a formal arrangement.

The structure, eventually, appeared to be due for implementation but things took a turn for the worse.

David Markus explains: “On the day the new commission structure was announced, they also introduced a new partner company in the local market who promptly poached our salesperson.”

“We tried to back fill the position to close the sales in our pipeline and failed. As a result of this debacle, our company was forced to reduce staff and went from eight people to four people within three months.”

Happily, this damaging situation didn’t scupper Combo’s growth plans and within a few years the company boosted its workforce up to 16.

So what lessons did the company take from its brush with an unsuitable partner?

Markus says: “Like clients, partners should share our values in business. We now carefully qualify potential partners very carefully from both a business and values perspective.”