My guest today is Corey Northcutt, the founder of the Northcutt agency. The company is highly successful and Corey has built an impressive SEO and Cloud service. However, it wasn’t always that way. Before Northcutt, Corey was a co-founder of Ubiquiti, a web hosting company. That company grew wildly, but it became a nightmare once the four business partners involved began seeing dollar signs.

Corey tells me about his time in a highly political and stressful business. His story is a cautionary tale about how to structure your company in the beginning to maintain a fair balance of power. Corey left his company in a massive blow-up that left him aimless and shell-shocked. He tells me how he found his direction and how he’s done things differently this time around with Northcutt.

You will learn about:

The beginnings of Ubiquiti.

How Corey pivoted into other services.

Why Corey chose his first business partner.

When Ubiquiti merged with one of its clients and two more partners joined the team.

The benefits of catering to a niche market.

The initial partnership structure Corey and his partners used.

The issues Corey and his partners had.

Lessons Corey learned from dealing with potential buyers.

The cracks that appeared within the partners’ relationship.

The toxic environment that developed during the sales process.

How Corey left the company.

Life after the buy-out.

The lessons Corey took from his time at Ubiquiti.

Why does Corey choose not to work from an office?

Corey’s advice to the audience.

Office politics is a little more serious than we give it credit for. On today’s show, we talk through a ‘hostile work environment’ that’s hard to make a joke out of. Corey Northcutt experienced first-hand what it’s like to have your baby ripped away from you—and there was nothing he could do about it.

Founder, Smounder

As Corey found out, it didn’t matter one little bit that he was the originator for Ubiquity, his web hosting company. Yes, he owned the domain name and he had done a lot of the back-end work to get their servers up and running, but in the end, that wasn’t enough to get him anything better than a buyout.

Unless you have the right operating agreements or other paperwork in place that cements roles, expectations, salaries, etc., you lose a lot of your authority (and in this case importance) to a company when you bring on partners. And most of us need partners! Someone has to fund the expansion or figure out how to distribute on a wider scale.

One of Four

And here’s the other fun factor. Once you bring on your partners, you become a voice among many. While there are a lot of ways this can work for you, there are also a lot of ways it works against you. The biggest detractor to multiple partners (especially without a tie-breaker) is decision making. Your voice, which used to be 100% of the decision making process is now only 25%, for example. So unless at least two of your other partners agree with you, you’ll never have final say on something.

This bleeds into the exit process as well. If everyone is after something a little different, it’s hard to align operational goals, let alone exit ones. Someone wants the most about of cash possible, someone wants to stay on as a developer, someone wants to sit on the board with stock options and earnouts. That’s