As a chemist I know what coumarin is but had no idea of its place in the chemical industry, least of all as a substitute for vanillin which looks nothing like it. Often, two molecules that are just sliiiightly different will have entirely different functions. Here, two molecules that are completely different can be substituted in some capacity.
But, damn, what a fine piece of writing. A seamless connection of facts and reminiscences all taking me somewhere. The author tells his family's and their extended family's story, without all the contortions and schnookery involved in "telling a story" in our marketing-besotted culture.
"Touching the product makes it different" is a remarkable turn of phrase.
> without all the contortions and schnookery involved in "telling a story" in our marketing-besotted culture.
This is probably the only story I've read on here that didn't reek of self promotion or self aggrandization, or even a "I did this so you don't have to" -- it was the kind of story you might find on Blogger back in the day. Exceedingly rare now.
I wonder if that has something to do with the experience of death. Narcissistic god complex in those who haven’t had it. Humility and a real sense of purpose, legacy and a connection with those who came before and who will come after in those who have.
Probably not true in such simplistic terms. But I can certainly observe a change in that direction in my own life. And if you read works of people in their 20s from 100 years ago (pre antibiotics), you see a lot less narcissism also. (May just be survivorship bias, of course.)
Writing to process and reflect on loss naturally brings more vulnerability and introspection to one’s writing. I’m not sure that would carry over to all your subsequent work, though.
I eagerly read some of the other posts on the author's site and came away rather disappointed. But, that doesn't detract from my appreciation of this one.
Vanilla bean != Vanillin, since the smell of natural vanilla bean has a many more components to it other than Vanillin which lend it that characteristic odor (sweet, animalic, slightly woody and herbaceous).
Vanillin by itself is of course a principle component. However, coumarin and vanillin don't smell too similar. Coumarin has more of a herbaceous, 'hay' smell, quite different from vanillin itself.
I know it’s a rhetorical question—but I’m sure that someone discovered animal glues because they were cooking, left the animal products to cook in water, and then let it dry out.
You cook it because it’s supposed to be food, but sometimes you’re left with this thick, sticky substance. Voilà, glue.
A few years out of school, I took a detour from tech/entrepreneurship to work in my family business (overseeing operations in a construction manufacturing facility, in Egypt), mostly with my Uncle. In my case, though I fully prefer tech as an industry, the deal-breakers were a dismal economic/political climate and an... interesting Uncle.
Apart from that, a lot of the article resonated. A few other things that stood out and made the transition hard for me were: corruption (in the construction industry, hard to avoid) and culture/hierarchy.
Same here. I'm a big wheel at a big company (tech) everyone here has heard of. But My father passed a few years ago, he ran an old box factory in Tajikistan. I ran it into the ground. Sometimes you need to run a box factory in tajikistan to run in the ground to learn a thing or two about life.. things you don't never learn in silicon valley
In case the author is reading this, I am wondering why Dad did not have a succession plan, and was it ever discussed in the family what should happen after? What was dad’s plan?
This is a big question tbh and the lack of a succession plan is a function of many things:
1. This was my dad's baby. He loved the engineering and the science of it and so the idea of retiring from it was difficult for him to conceive. Doing that also requires thinking about one's mortality which I also believe was difficult for him.
2. This was a small market business in a tier 2 city in India. Attracting talent that could take it over was challenging. And myself and my siblings having been born and brought up in the States and being utterly clueless about the engineering/science of the company made us a non-starter.
3. As others have pointed out, he was thinking about succession/exit because he knew it was required for the biz to live on and grow. But life unfortunately had other plans and he was taken away from us unexpectedly.
There are definitely lots of could haves, should haves, would haves, etc I've thought about afterwards, but this was clearly one of those "play the cards you're dealt" kind of situations.
I don't think there is an Indian social contract but having been born and brought up here in the USA, I'd be talking out of my a$$ on that topic :)
This was maybe more of an implied or expected contract I had with my dad and mom who built the business and by extension the Atlas team.
Job hopping is quite common in India, but that's probably more common in larger cities. In a tier 2 city like where my dad's business was, there are limited options for a plant engineer for example, and as far as I can tell, the skills they have in a fine chemicals plant may not be immediately transferable to a plastics manufacturer.
And finally, many were with my dad for 10+ years so probably some amount of comfort in knowing the domain, the job, the boss, etc.
Thanks for the story and for putting the employees first. M&A of your sort should always select suitors based on chemistry fit - so when I read your list of candidates, it was already clear to me you would sell to the one listed last, and I'm glad it worked.
Selling to Private Equity is almost never what any founder would have wanted, as their job is to slice and dice, "cut the fat" and sell the pieces to different highest bidders.
>Selling to Private Equity is almost never what any founder would have wanted, as their job is to slice and dice, "cut the fat" and sell the pieces to different highest bidders.
Depends on the founder, I'm happy that the OP decided to look after his workers, but there's no loyalty in business.
Many founders would just look at the largest payday and be done with it.
I guess you can have a George Lucas moment and criticize the new owners for destroying what you made, but you're sitting nice with your profits.
OP comes off as someone who was already really comfortable, and the business appears to of been profitable.
But it would have been a completely different story if they were losing money, at a point you might just have to sell the company for parts and cut your losses.
Maybe offer some of the lifers generous severance packages.
There are lots of family owned businesses in the US that look after their employees. I think it’s more that there are significantly fewer tech companies in general that are family owned businesses.
I think maybe it's because the tech industry is so young, and because it was mostly populated by the young when it exploded in the 80s and 90s.
In IT I've never has a boss a generation older than me. Folk were/are basically my generation. In the early days there wasn't an "adult in the room" so we made it up as we went along.
We (as people) tended to be more about "people" than "money" (although I'm sure not all ex employees would agree.) There's a fine line between caring for people and staying profitable. But one can do both.
I'm not one for job-hopping (and I've likely left cash on the table for that) but that seems to permiate down. (Half the staff are 10 years+ now). We're also only adding a few posts a year. We don't hire fast. We don't fire fast.
But the industry in general was build by narcissistic folk in their 20s, who had ideas like "young is better", grow-fast, high risk, break things etc. IT culture is still like that (despite us being in our 50s now.)
But I don't think this reflects the world in general, or indeed industries in general. I feel like most people want a stable job, a stable life, and dont feel the need to move all the time.
As an employer, the OPs criteria of caring what happens to our staff has been front and center when succession planning. Just cause we retire shouldn't mean they're out of a job.
Thanks for sharing. Curious how things are now 6 years later: do you still keep in touch with some of the employees? Has the outcome been good for them?
I'm curious if you can share: how were you raised in the US while your father was in India? You were raised by a relative, or your mother lived away from your father?
This was a great ride, a very gripping read and a very touching story. Congratulations on your adventure and I'm sure your father and his second family is proud of you.
From reading it, and the various references to various potential buyers his father had already been in discussion with, it appears his plan was to sell it before that.
This is a big problem with these kinds of businesses. A lot of these solo owners who build up a business over the course of many decades serious underestimate how hard they are to sell, and have an unrealistic idea of what valuation they'll be able to get.
There is a whole industry of those bottom feeders the author referred to, who's business is precisely waiting for these sole owners to either die, or better yet become incapacitated to the extent they are forced to sell their businesses (but not so much that they can't hold a pen and read a sales contract), so that they can swoop in and offer them 2x or 3x - "what's your best alternative?".
I'm not commenting on OP or their family business, but a multiple of 2x or 3x could be more than fair for a hands-on small business.
Consider that there are large public companies with established management systems that you can buy and hold, completely hands-off, for multiples of 5x - 10x. GM is trading at 5x, lots of banks are in that range, huge equipment rentals, mines, etc.
Perhaps, but investors are neither fully informed nor fully rational.
People get overexcited about new trends, then everybody jumps on the bandwagon, and good but boring stocks are ignored. Doesn't mean these are weak businesses though.
Why are the buyers referred to in derogatory terms? By the same logic, the seller should also be referred to in the same derogatory terms, for holding out for too high of a price.
Or one could do the sensible thing and leave emotion out of it, and realize business is just business. The market price is the price that results in a transaction.
>Why are the buyers referred to in derogatory terms?
Because they are taking advantage of the owner's impaired judgement due to their personal situation/ill health in trying to extract an unfair price. Such behavior is referred to as "morally reprehensible" at best, and is skirting the legal line of what would be considered a contract made under duress at worst.
> Because they are taking advantage of the owner's impaired judgement due to their personal situation/ill health in trying to extract an unfair price
I think you are assuming way too much - a lot of older folks sell things "because they are done", and much is upside from when they purchased or started originally. Even when they are ill, many folks just don't care enough about the money enough to wait it out, negotiate, etc.
I'm not assuming anything. I was answering a question based on:
> There is a whole industry of those bottom feeders the author referred to, who's business is precisely waiting for these sole owners to either die, or better yet become incapacitated to the extent they are forced to sell their businesses (but not so much that they can't hold a pen and read a sales contract), so that they can swoop in and offer them 2x or 3x - "what's your best alternative?".
It's not material to my answer whether that statement is true or not. If you think it is untrue, take it up with user "_rm".
So no one should ever buy from someone who is dying or ill?
That’s crazy. Supply and demand curves are in constant flux. The seller didn’t like the market prices when they were healthy, that does not mean they are entitled to a minimum price. Everyone gets ill and dies eventually, and everyone knows it. They are free to sell before that at the market price.
> So no one should ever buy from someone who is dying or ill?
You can do that. However there's an issue with basing a business around reaching out to people with bad-faith offers the week their parents died or they were hospitalized themselves.
Easy to see how specifically targeting the dead or dying for profit is worthy of derogatory terms.
If you think otherwise, maybe you shouldn't view "bottom feeder" as derogatory? They keep the seabed clean do they not? It's all just "business".
And yes, the sellers in this case are also in the wrong, best case being bad luck, mid case being failure to prioritize, through to ignorance, delusion, stubbornness, arrogance, etc.
There's vastly more profit in buying a few companies at 33 paise on the rupee than in buying lots of companies at 99 paise on the rupee. And coordinated punishment of any newcomers - who try to disrupt a status quo of systematic underbidding - does not even require communication between the incumbents.
Then who is buying at 33 paise? You are contradicting yourself.
If something “worth” 1 rupee is not selling for 1 rupee,then the logical conclusion, absent collusion/cartel/monopsony behavior, is that it is not worth 1 rupee or even 99 paise, but rather the 33 paise that it is selling at.
The established players - and occasional well-behaved newcomers - are buying at (say) 33 paise on the rupee.
The "1 rupee" is what the business would be worth, in a highly efficient, open market. Which this market clearly is not. And the regulars are quietly colluding to keep it that way.
The context of _rm’s post is not about the OP’s dad’s specific business in its specific regulatory environment which may or may not constitute a “highly efficient, open market”.
> lot of these solo owners who build up a business over the course of many decades serious underestimate how hard they are to sell, and have an unrealistic idea of what valuation they'll be able to get.
From this, I get the sense that _rm was talking about owners of niche businesses that are surprised to find a smaller market of interested buyers, and hence are surprised they cannot sell their business at a price they hoped to get.
My point was simply that just because a seller cannot get a buyer to pay the price they hoped, that does not make the buyer a “bad” person.
Quite true. And it's possible that (due to regulatory/tax/social/etc. factors in India) small businesses could only be sold at large discounts to their "Wall Street theoretical" values - even in a perfectly efficient market.
I originally commented in response to amadeuspagel saying "If there's a whole industry of them, shouldn't there be lots of competition to buy these companies?" - by pointing out a simple way in which the market could be very inefficient.
Yes, even if there's a carved-in-stone rule that businesses sell for (say) 10X their annual profit, there will be plenty of business owners who imagine that their business is somehow the exception.
Related is the problem of owners misrepresenting their businesses to potential buyers. Which would lead perfectly rational and honest buyers to offer them far below 100 paise on the rupee, due to the risk of being swindled.
The author mentions that his father was in touch with a PE-backed chemical company a month before he passed, who re-engaged a month after- sounds like that might have been his succession plan?
This was in India where succession planning for small business is non-existent and if kids don't pick up their family business, it's over. However, even in America, this situation exists for small businesses. With so many baby boomers retiring from businesses like HVAC etc, their kids don't necessarily want to continue the business.
Left field comment but I’d love to be thrown into an MBA-like simulator (HBS?) and have to figure out the industry and the company and stabilize it/make it grow and whatnot within some time window.
Great read, thank you to the author who took the time to write up all that, it was very insightful and must have been fucking difficult in many ways.
But the same word has also been over used to provide cover or respectability for all types of anti-patterns from poor planning, to lack of any safety net or margins, to cutting corners, disregard for standards and regulations, and hustle culture where the ends justify means however questionable.
Maharashtra has a long history of cooperatives, some of whichquite successful. I wonder if employees brought up or were given a option to form a cooperative, if immediate liquidity was not a major requirement.
I think these aren't more popular because actually, there are things that genuinely suck about small business ownership. Offhand: stress, uncertainty/having to make payroll, having a significant % of your net worth tied up in a single, undiversified investment that's near-impossible to sell.
Given the choice, I think a normal cash-paying salary job (maybe with bonus) is vastly preferable to most people.
Thank you for sharing this unique story. Some parts of your story resonated with my life, hope you don’t mind me sharing:
* At times it felt like the true sons are the companies they started. They live and breathe in them. I have a strange detachment to my own family because of this.
* Thus, they have serious attachment issues and zero succession plans.
* My mom later passed away too soon and missed out much of the life experience she could have had. Glad that she did travel around the world before death.
* Even after all that, my old man still doesn’t have succession plan. Dunno what’s gonna happen to all the people working for him. And the clock is ticking.
* Like OP, I spent most of my life in the US, so I too would be useless in dealing with the businesses. Even the real estate company (something I know a bit in the US) is far too different back there.
Also, blatant corruption is simply not my cup of tea.
I tried to help them multiple times. I offered to sponsor them green card, but they consistently refused. I offered if they need help finding private equity to liquidate and just retire. Sometimes I wonder if my mom could have been saved with US quality healthcare.
Oh well, I did my best, there was nothing I could have done.
Fascinating article, but reading it I kept asking myself: Why not promote someone to CEO? Surely any top-level manager already working at the company will do a better a job then someone who's only qualification is working there 18 years ago.
The author had business experience having founded and running the successful CB Insights so it's not like some naive well-to-do kid took things over.
By the end you realize the author 1) researched the industry, 2) improved the product mix 3) grew the highest-margin product and 4) sold to a buyer with values that protected his workers and his dad's legacy.
Someone with that quality/ability is really hard to find, even at really big companies.
1. He died suddenly so would have been a good thing to explore and do with time. It certainly would have made my life easier :)
2. Building a business that is small to medium-sized with no brand recogntion in a tier 2 city in India doesn't afford you access to tier 1 talent. India's talent and talent preferences are incredibly different than the USA.
1. Most importantly, we didn’t have the talent internally to do that. Running the biz requires a set of generalist biz skills and the company was comprised of specialists. They could tell me about issues in their domain but business requires skills across many domains. And running a biz of this size in a location as challenging as Nasik/Sinnar requires someone being the top dog as decision by consensus wouldn't work (rarely does).
2. Capital availability / accessibility - The team just wouldn't have had it. Indian credit and debt markets would not be available.
3. Non-traditional structure would have required a lot of education - Even if capital was somehow available (0% chance), this would have been an exercise in 'herding cats' and wasn't something I had time for. I was running a business here in the USA plus had a wife and 2 young kids. My work hours were already insane just operating the businesses. I was optimizing for a simple, clean deal for many reasons and a co-op would have been an amount of 'brain damage' I wasn't game for especially given factors above.
--
Finally, I'll say that I don't think this would have been feasible in India at the scale and location we were at for one other intangible and cultural reason.
And that is because the employee to owner mentality transition would be non-trivial to impossible. The gulf is just too big. The reality is that reimagining yourself as a founder or owner requires a different mindset. There is no 'leaving the office' especially at the scale of Atlas (small/mid-sized). You're always on call to some extent and all problems seek you out (or you have to go find them). This is not the kind of responsibility and weight most people want at the end of the day.
Amazing story - shows the importance of succession planning - worked for a family-owned company but the apples did not fall close to the tree - the sons and daughters could not match the father.
Like what happened to Wang.
Today they are technically bankrupt and reluctantly handed over control to seasoned management and they are spinning out parts of the company to raise capital to save the core business.
Very common that the children don't wish to run the family business – I always wondered why. Wonder how much things would have turned out differently had the Dad introduced the company to his son at a young age and "groomed" him to be the future leader of the organization.
interacting with parents as an adult is weird, you're expected to be perpetually deferential to them simply because you started your relationship that way. (perhaps even more so in asian cultures like mine and the author's). I'm not surprised that people would rather not have even their work lives pushed into that framework.
it's a luxury that modern life affords us. Traditionally boys would go into what their father has done, as he did his father and his father before him. It’s only relatively recently that society affords children an opportunity to branch out from the circumstances of our birth. The idea of royal succession seems less weird when the rest of the whole world is also organized that way
My father had a fragrance company (now owned by Givaudan) as client and every time he visited he came back with reproductions of famous perfumes (sampler size). I always found it interesting that they lasted longer or smelled nicer than the original. Of course, most of the time he only brought it back for mom.
First time, I visited, the company with my dad, I was surprised in how much things a fragrance is used. From perfume, shampoo but also cleaning products. It's a fascinating business.
> Candidly, my only qualification to run Atlas at this time was that I was the founder’s son.
It seems like an even more important qualification was that the founder's son was also a founder. Otherwise this would have been much less likely to work.
It’s an odd sentence to be honest. Being the son of the founder of a business has been the strongest qualification for running that business for at least 3,000 years.
On top of that he had worked in this same company for two years, had an Ivy League degree, had worked both in startups and large scale investment banking firms, and had founded and run an unrelated $100M+ enterprise.
The author was born/raised in the US which, not explicitly mentioned, means his father must have spent most of his time in India, away from the family, running the business. If so, that's a big sacrifice that the son amply reciprocated.
Maybe. Frankly this is a very impressive outcome that is attributable both to the Father's business and management practices, as well as the Son's business and management practices. No matter how good you are at running a web business, if you inherit a totally fucked business with poor practices, very unlikely you could engineer this outcome.
My condolences to the OP and I was happy to read such a well-written article describing a fantastic outcome for his father's company.
Having founded and run CB Insights certainly helped mostly cuz I had some sense of where to focus.
In this case, we had product-market fit to use a tech term. My dad's product was great.
And so I didn't need to worry about that. If I had to worry about that, this probably doesn't unfold as it did.
That meant I just had to worry about 2 things:
1. Making sure we were buying raw materials at rates that allowed us to sell the product profitably
2. 'Ringing the register' aka making sales. And that ultimately is not intellectually hard but just requires effort, i.e. researching, calling, emailing, etc.
Hey. This is completely unrelated but I wanted to ask if you provide an RSS feed for your blog? I did find a /feed page but I'm unsure if it's working.
I just started getting a few texts from friends saying 'your post is on HN' and was confused. Prob been 10 years since anything I wrote has been on here so was an unexpected surprise especially as the comments are almost all quite nice (didn't expect that :)
this was an absolute incredible story. I would absolutely watch a movie about this story. learning history and family through something that at its surface seems so cold and difficult to process is very intriguing, a triumph of small business, cultural differences (americanized indian returns to india), i sense a great film in this story. thanks for sharing!
My brother died almost 10 years ago and he ran his own software company. He had no plan, because he thought he could beat cancer. His wife had to get his passwords while he was on his deathbed.
The day of his funeral, his wife begged me to look at his work laptop and help her out. She even mentioned us being partners in the company. I was already running my own successful company at the time and had almost no time do this.
I found the time and saved her probably close to $150,000 in customers pissed off because my brother stopped handling support due to his illness, forgotten about purchase orders, and a website that he pre-paid for $20,000 and was never delivered because he died and never told them he was sick. They sent over the entire amount within a few days of me explaining the situation.
I never expected any money for this work, I was just trying to clean up the business and get it back to a functional level. A few months later, when she had time to grieve and think about things, she wanted to talk partnership. Her first offer was to pay me $15/hour, which I rejected (and laughed about later with my wife).
Her second offer was to give me 10% of the company and when her kids turned 18 in 8 years, they would get full control over the company (including my 10%). I was personally offended because she essentially wanted me to maintain and build up the entire company, take a very low percentage along the way, only to hand over the entire company to her kids (my nephews).
When I explained this to her and rejected the offer, she told me that I had no skills beyond 'answering emails' and that I didn't 'understand how business worked'.
Shortly after this, she found an email from my brother's old friend who was very religious. She had also recently found god and as a result, convinced this person that he needed to help her for free. For the last 6 or 7 years, the business has been in maintenance mode with this person answering emails, for free. I know the technical capabilities of this person and most responses are basically re-installing the software or rebooting the computer. I am also in the tech industry and the job this person has is about the level I was at when I was 15 (I'm 45 now).
The result was as I expected: Most of his clients stopped re-purchasing licenses because there is no more support or bug fixes and you also just can't trust the security of software after it hasn't been updated in 10 years.
She now has to work a minimum wage job making meals for the elderly (which isn't a bad thing) and the company is close to bankruptcy. It was good we were never partners, because I probably would not have been able to start my next business.
It took my brother over a decade to build his successful company, and a few years for his wife to destroy it.
> A few months later, when she had time to grieve and think about things, she wanted to talk partnership. Her first offer was to pay me $15/hour, which I rejected (and laughed about later with my wife).
That's an immediate red flag that tells me:
1) She doesn't value other people's time, but thinks that her's is invaluable.
2) She thinks this is a "simple job" (It never is, regardless of the business in question).
This is exactly right. After that first offer, I was just going to walk away. The sad part is that the business would have done very will during covid. It could have reached a new level of profitability.
She was able to take all of the money out of the company for a couple of years before the software contracts expired. After all the value was gone, she tried to sell the company for $1,000,000. The potential buyer almost laughed in her face.
She doesn't seem to have the experience to make it successful (either the ability to run it or hire) and you didn't have the time to run it either, given that, the company halting is almost a given as with any sole proprietorship when the founder suddenly dies
These are both good points. I sold my company a year or two after this and got into a new venture shortly after. I was looking for something different and could have made time to maintain the current company and even get new clients.
Why didn't you elevate someone from inside to the CEO position? Seems like a great way to maintain ownership (and take care of people) while also rewarding the best employees.
This is such a heartwarming story. Thank you for sharing about this Anand. I loved the part about how your dad’s legacy is all the children of employees who could continue their education.
Anyone know of any similar stories like this one? I don't know why, but I really enjoy reading these and hearing the thought process and decisions made.
Wouldn't it have been better if ownership of the company, essentially comprised of the workers and managers, actually passed to the workers who knew what they were doing?
To me this just highlights the absurdity of capitalist ownership.
For them sure, not for OP and family? It wasn't run on a total profit share before OP's father died, it would be weird (and very bad incentive) if that suddenly changed.
No doubt that sort of thing happens sometimes, or especially donating an inheritance to charity, but it being the default would be more absurd to me, when it was already in 'capitalist ownership'.
But you seem to imply that if capitalism didn't exist, nor would chemical companies, etc. Something like this business would still exist if there was a need for it under almost any political-economic system.
There are numerous other ways for people to cooperate and work together, partnerships, co-operatives, etc, etc, that do not involve single individuals reaping all the profit of everyone's else's hard work.
IMHO any collection of workers deserve that their 'owner' at least understand the nature of their work, and ideally they should themselves be owners.
There are a series of overlooked axioms in that train of thought, in that:
- All people involved are capable of learning skills outside of their knowledge domain as quickly as those inside those domains (People interchangeability)
- All people involved won't have ideological splits for the direction of the company
- That everyone involved wants to partake in the risks of ownership (market uncertainties/shifts, illiquid buyout scenarios, dealing with ownership transfer headaches, new incoming co-owners, ownership dilution, etc.)
- That there is time outside of their work to manage the overhead of this co-op
- That the talent required to ease their workloads is receptive to the co-op concept, or cheap enough to hire (not likely) in cases where they just want a stable income (see point 3)
- That the decision overhead from the co-op is lower than the standard corporate structure (possible, & likely the easiest axiom to fulfill out of the list, if the time of the co-owners is cheaper)
The author of the post responded to a similar question made earlier: Certain mental, financial, & cultural logistics are just not there/available given the time-frame involved. The co-op ideal is wonderful, but it requires a series of fulfillments that not everyone is as receptive towards.
Some of the largest companies in Europe are co-ops, and they don't require employees to become CEOs overnight. Those companies still have recognizeable structures, just that the profits don't get sucked out at the whim of a small group of 'owners'; the employees have a stake in those profits and some say in how the company (that they maintain, and likely helped to build) is run.
The fact that there are co-ops still doesn't refute the fact that a series of prerequisites need to be fulfilled, just so that the co-op doesn't collapse in on itself. Co-ops exist, only after the requirements are fulfilled.
Furthermore (and more important for me personally), axiom 3 (That everyone involved wants to partake in the risks of ownership) still isn't addressed in the given response: What if I found a job in a co-op, but I don't want the profit sharing & just want a fixed salary?
So far, the best procedure that I've seen addressing this issue allows for the existence of non-member workers, from which workers can invest a fixed sum to become member workers:
As a chemist I know what coumarin is but had no idea of its place in the chemical industry, least of all as a substitute for vanillin which looks nothing like it. Often, two molecules that are just sliiiightly different will have entirely different functions. Here, two molecules that are completely different can be substituted in some capacity.
But, damn, what a fine piece of writing. A seamless connection of facts and reminiscences all taking me somewhere. The author tells his family's and their extended family's story, without all the contortions and schnookery involved in "telling a story" in our marketing-besotted culture.
"Touching the product makes it different" is a remarkable turn of phrase.
> without all the contortions and schnookery involved in "telling a story" in our marketing-besotted culture.
This is probably the only story I've read on here that didn't reek of self promotion or self aggrandization, or even a "I did this so you don't have to" -- it was the kind of story you might find on Blogger back in the day. Exceedingly rare now.
I wonder if that has something to do with the experience of death. Narcissistic god complex in those who haven’t had it. Humility and a real sense of purpose, legacy and a connection with those who came before and who will come after in those who have.
Probably not true in such simplistic terms. But I can certainly observe a change in that direction in my own life. And if you read works of people in their 20s from 100 years ago (pre antibiotics), you see a lot less narcissism also. (May just be survivorship bias, of course.)
Writing to process and reflect on loss naturally brings more vulnerability and introspection to one’s writing. I’m not sure that would carry over to all your subsequent work, though.
Pre-internet and an ever-increasing race for attention, too.
I eagerly read some of the other posts on the author's site and came away rather disappointed. But, that doesn't detract from my appreciation of this one.
Vanilla bean != Vanillin, since the smell of natural vanilla bean has a many more components to it other than Vanillin which lend it that characteristic odor (sweet, animalic, slightly woody and herbaceous).
Vanillin by itself is of course a principle component. However, coumarin and vanillin don't smell too similar. Coumarin has more of a herbaceous, 'hay' smell, quite different from vanillin itself.
Agreed. My use of "substitute" was a bad choice. I would not have thought that coumarin could/would be used as a component in vanilla substitutes.
"They make glue out of horses. I don’t know who started that. Who saw that potential? That’s pretty amazing to me..." --- Jerry Seinfeld [1]
[1] https://scrapsfromtheloft.com/comedy/jerry-seinfeld-im-telli...
I know it’s a rhetorical question—but I’m sure that someone discovered animal glues because they were cooking, left the animal products to cook in water, and then let it dry out.
You cook it because it’s supposed to be food, but sometimes you’re left with this thick, sticky substance. Voilà, glue.
I spend an inordinate amount of time wondering how people discovered amadou, https://en.wikipedia.org/wiki/Amadou as well as glue.
manioc is the one that really makes me wonder, it needs some pretty complex and time consuming processing before it's not poisonous.
Right- reminiscent of nixtamalization.
This was a great read.
A few years out of school, I took a detour from tech/entrepreneurship to work in my family business (overseeing operations in a construction manufacturing facility, in Egypt), mostly with my Uncle. In my case, though I fully prefer tech as an industry, the deal-breakers were a dismal economic/political climate and an... interesting Uncle.
Apart from that, a lot of the article resonated. A few other things that stood out and made the transition hard for me were: corruption (in the construction industry, hard to avoid) and culture/hierarchy.
Same here. I'm a big wheel at a big company (tech) everyone here has heard of. But My father passed a few years ago, he ran an old box factory in Tajikistan. I ran it into the ground. Sometimes you need to run a box factory in tajikistan to run in the ground to learn a thing or two about life.. things you don't never learn in silicon valley
In case the author is reading this, I am wondering why Dad did not have a succession plan, and was it ever discussed in the family what should happen after? What was dad’s plan?
Hi - author here.
This is a big question tbh and the lack of a succession plan is a function of many things:
1. This was my dad's baby. He loved the engineering and the science of it and so the idea of retiring from it was difficult for him to conceive. Doing that also requires thinking about one's mortality which I also believe was difficult for him.
2. This was a small market business in a tier 2 city in India. Attracting talent that could take it over was challenging. And myself and my siblings having been born and brought up in the States and being utterly clueless about the engineering/science of the company made us a non-starter.
3. As others have pointed out, he was thinking about succession/exit because he knew it was required for the biz to live on and grow. But life unfortunately had other plans and he was taken away from us unexpectedly.
There are definitely lots of could haves, should haves, would haves, etc I've thought about afterwards, but this was clearly one of those "play the cards you're dealt" kind of situations.
Thanks for reading.
Thanks for writing a great article.
I was honestly impressed with how much you cared for your employees.
The American way would be to just sell it to the highest bidder without any concern for anything else.
Does India have a different social contract? I'd never expect a company to actually look out for my best interest.
It seems like you really cared for your team. Are lifers common in India?
Back in my grandpa's time, you worked at the same place for 20 years, they gave you a gold watch, and then you retired.
Now your expected to jump ship often or your leaving money on the table.
Thank you.
I don't think there is an Indian social contract but having been born and brought up here in the USA, I'd be talking out of my a$$ on that topic :)
This was maybe more of an implied or expected contract I had with my dad and mom who built the business and by extension the Atlas team.
Job hopping is quite common in India, but that's probably more common in larger cities. In a tier 2 city like where my dad's business was, there are limited options for a plant engineer for example, and as far as I can tell, the skills they have in a fine chemicals plant may not be immediately transferable to a plastics manufacturer.
And finally, many were with my dad for 10+ years so probably some amount of comfort in knowing the domain, the job, the boss, etc.
Thanks for the story and for putting the employees first. M&A of your sort should always select suitors based on chemistry fit - so when I read your list of candidates, it was already clear to me you would sell to the one listed last, and I'm glad it worked.
Selling to Private Equity is almost never what any founder would have wanted, as their job is to slice and dice, "cut the fat" and sell the pieces to different highest bidders.
>Selling to Private Equity is almost never what any founder would have wanted, as their job is to slice and dice, "cut the fat" and sell the pieces to different highest bidders.
Depends on the founder, I'm happy that the OP decided to look after his workers, but there's no loyalty in business.
Many founders would just look at the largest payday and be done with it.
I guess you can have a George Lucas moment and criticize the new owners for destroying what you made, but you're sitting nice with your profits.
OP comes off as someone who was already really comfortable, and the business appears to of been profitable.
But it would have been a completely different story if they were losing money, at a point you might just have to sell the company for parts and cut your losses.
Maybe offer some of the lifers generous severance packages.
Does it count as business, though, if you're just busting it out, light a match? Is that not more, vandalism? Seems not as difficult.
He means “just business” in the mob sense.
There are lots of family owned businesses in the US that look after their employees. I think it’s more that there are significantly fewer tech companies in general that are family owned businesses.
I think maybe it's because the tech industry is so young, and because it was mostly populated by the young when it exploded in the 80s and 90s.
In IT I've never has a boss a generation older than me. Folk were/are basically my generation. In the early days there wasn't an "adult in the room" so we made it up as we went along.
We (as people) tended to be more about "people" than "money" (although I'm sure not all ex employees would agree.) There's a fine line between caring for people and staying profitable. But one can do both.
I'm not one for job-hopping (and I've likely left cash on the table for that) but that seems to permiate down. (Half the staff are 10 years+ now). We're also only adding a few posts a year. We don't hire fast. We don't fire fast.
But the industry in general was build by narcissistic folk in their 20s, who had ideas like "young is better", grow-fast, high risk, break things etc. IT culture is still like that (despite us being in our 50s now.)
But I don't think this reflects the world in general, or indeed industries in general. I feel like most people want a stable job, a stable life, and dont feel the need to move all the time.
As an employer, the OPs criteria of caring what happens to our staff has been front and center when succession planning. Just cause we retire shouldn't mean they're out of a job.
Lifers are common in manufacturing/industrials in India. Jumping ships is the norm in tech as it is in the US.
Thanks for sharing. Curious how things are now 6 years later: do you still keep in touch with some of the employees? Has the outcome been good for them?
I'm curious if you can share: how were you raised in the US while your father was in India? You were raised by a relative, or your mother lived away from your father?
> Attracting talent that could take it over was challenging.
Was promoting upwards from within not an option?
This was a great ride, a very gripping read and a very touching story. Congratulations on your adventure and I'm sure your father and his second family is proud of you.
This was a great read. You could sell this story to Netflix.
From reading it, and the various references to various potential buyers his father had already been in discussion with, it appears his plan was to sell it before that.
This is a big problem with these kinds of businesses. A lot of these solo owners who build up a business over the course of many decades serious underestimate how hard they are to sell, and have an unrealistic idea of what valuation they'll be able to get.
There is a whole industry of those bottom feeders the author referred to, who's business is precisely waiting for these sole owners to either die, or better yet become incapacitated to the extent they are forced to sell their businesses (but not so much that they can't hold a pen and read a sales contract), so that they can swoop in and offer them 2x or 3x - "what's your best alternative?".
I'm not commenting on OP or their family business, but a multiple of 2x or 3x could be more than fair for a hands-on small business.
Consider that there are large public companies with established management systems that you can buy and hold, completely hands-off, for multiples of 5x - 10x. GM is trading at 5x, lots of banks are in that range, huge equipment rentals, mines, etc.
Doesn't a multiple of 5 basically mean the market is seriously worried that the business will shrink / go bankrupt?
Perhaps, but investors are neither fully informed nor fully rational.
People get overexcited about new trends, then everybody jumps on the bandwagon, and good but boring stocks are ignored. Doesn't mean these are weak businesses though.
Why are the buyers referred to in derogatory terms? By the same logic, the seller should also be referred to in the same derogatory terms, for holding out for too high of a price.
Or one could do the sensible thing and leave emotion out of it, and realize business is just business. The market price is the price that results in a transaction.
>Why are the buyers referred to in derogatory terms?
Because they are taking advantage of the owner's impaired judgement due to their personal situation/ill health in trying to extract an unfair price. Such behavior is referred to as "morally reprehensible" at best, and is skirting the legal line of what would be considered a contract made under duress at worst.
> Because they are taking advantage of the owner's impaired judgement due to their personal situation/ill health in trying to extract an unfair price
I think you are assuming way too much - a lot of older folks sell things "because they are done", and much is upside from when they purchased or started originally. Even when they are ill, many folks just don't care enough about the money enough to wait it out, negotiate, etc.
I'm not assuming anything. I was answering a question based on:
> There is a whole industry of those bottom feeders the author referred to, who's business is precisely waiting for these sole owners to either die, or better yet become incapacitated to the extent they are forced to sell their businesses (but not so much that they can't hold a pen and read a sales contract), so that they can swoop in and offer them 2x or 3x - "what's your best alternative?".
It's not material to my answer whether that statement is true or not. If you think it is untrue, take it up with user "_rm".
So no one should ever buy from someone who is dying or ill?
That’s crazy. Supply and demand curves are in constant flux. The seller didn’t like the market prices when they were healthy, that does not mean they are entitled to a minimum price. Everyone gets ill and dies eventually, and everyone knows it. They are free to sell before that at the market price.
> So no one should ever buy from someone who is dying or ill?
You can do that. However there's an issue with basing a business around reaching out to people with bad-faith offers the week their parents died or they were hospitalized themselves.
Easy to see how specifically targeting the dead or dying for profit is worthy of derogatory terms.
If you think otherwise, maybe you shouldn't view "bottom feeder" as derogatory? They keep the seabed clean do they not? It's all just "business".
And yes, the sellers in this case are also in the wrong, best case being bad luck, mid case being failure to prioritize, through to ignorance, delusion, stubbornness, arrogance, etc.
If there's a whole industry of them, shouldn't there be lots of competition to buy these companies?
There's vastly more profit in buying a few companies at 33 paise on the rupee than in buying lots of companies at 99 paise on the rupee. And coordinated punishment of any newcomers - who try to disrupt a status quo of systematic underbidding - does not even require communication between the incumbents.
What exactly is the coordinated punishment of newcomers?
The simplest tactic is to bid up anything they're trying to buy to 101+ paise on the rupee.
Then who is buying at 33 paise? You are contradicting yourself.
If something “worth” 1 rupee is not selling for 1 rupee,then the logical conclusion, absent collusion/cartel/monopsony behavior, is that it is not worth 1 rupee or even 99 paise, but rather the 33 paise that it is selling at.
The established players - and occasional well-behaved newcomers - are buying at (say) 33 paise on the rupee.
The "1 rupee" is what the business would be worth, in a highly efficient, open market. Which this market clearly is not. And the regulars are quietly colluding to keep it that way.
The context of _rm’s post is not about the OP’s dad’s specific business in its specific regulatory environment which may or may not constitute a “highly efficient, open market”.
> lot of these solo owners who build up a business over the course of many decades serious underestimate how hard they are to sell, and have an unrealistic idea of what valuation they'll be able to get.
From this, I get the sense that _rm was talking about owners of niche businesses that are surprised to find a smaller market of interested buyers, and hence are surprised they cannot sell their business at a price they hoped to get.
My point was simply that just because a seller cannot get a buyer to pay the price they hoped, that does not make the buyer a “bad” person.
> My point was...
Quite true. And it's possible that (due to regulatory/tax/social/etc. factors in India) small businesses could only be sold at large discounts to their "Wall Street theoretical" values - even in a perfectly efficient market.
I originally commented in response to amadeuspagel saying "If there's a whole industry of them, shouldn't there be lots of competition to buy these companies?" - by pointing out a simple way in which the market could be very inefficient.
Yes, even if there's a carved-in-stone rule that businesses sell for (say) 10X their annual profit, there will be plenty of business owners who imagine that their business is somehow the exception.
Related is the problem of owners misrepresenting their businesses to potential buyers. Which would lead perfectly rational and honest buyers to offer them far below 100 paise on the rupee, due to the risk of being swindled.
A whole industry of bottom-feeders buyers, but the companies they are buying are not necessarily in the same markets as each other, at all.
Yeah his father probably had been receiving lowball and unserious offers for years if one were to find the right email folder
The author mentions that his father was in touch with a PE-backed chemical company a month before he passed, who re-engaged a month after- sounds like that might have been his succession plan?
The Dad probably expected to live longer and run the business until then. Sounds like it was a big part of his identity.
Besides, most closely-held businesses don't have succession plans anyway.
This was in India where succession planning for small business is non-existent and if kids don't pick up their family business, it's over. However, even in America, this situation exists for small businesses. With so many baby boomers retiring from businesses like HVAC etc, their kids don't necessarily want to continue the business.
Wow !! We have supplied machinery to this company, how wonderful to find such write up at other end of the spectrum. World is small and gol.
Gol == round
Left field comment but I’d love to be thrown into an MBA-like simulator (HBS?) and have to figure out the industry and the company and stabilize it/make it grow and whatnot within some time window.
Great read, thank you to the author who took the time to write up all that, it was very insightful and must have been fucking difficult in many ways.
https://www.capitalismlab.com/
I noticed the word 'jugaad' from his speech and looked it up: https://en.wikipedia.org/wiki/Jugaad
It seems like a very befitting word for the eponymous "hacker" ethos of this site.
But the same word has also been over used to provide cover or respectability for all types of anti-patterns from poor planning, to lack of any safety net or margins, to cutting corners, disregard for standards and regulations, and hustle culture where the ends justify means however questionable.
So a pinch of salt needed when we hear this word.
see also "bricolage"
Maharashtra has a long history of cooperatives, some of whichquite successful. I wonder if employees brought up or were given a option to form a cooperative, if immediate liquidity was not a major requirement.
I think these aren't more popular because actually, there are things that genuinely suck about small business ownership. Offhand: stress, uncertainty/having to make payroll, having a significant % of your net worth tied up in a single, undiversified investment that's near-impossible to sell.
Given the choice, I think a normal cash-paying salary job (maybe with bonus) is vastly preferable to most people.
Thank you for sharing this unique story. Some parts of your story resonated with my life, hope you don’t mind me sharing:
* At times it felt like the true sons are the companies they started. They live and breathe in them. I have a strange detachment to my own family because of this.
* Thus, they have serious attachment issues and zero succession plans.
* My mom later passed away too soon and missed out much of the life experience she could have had. Glad that she did travel around the world before death.
* Even after all that, my old man still doesn’t have succession plan. Dunno what’s gonna happen to all the people working for him. And the clock is ticking.
* Like OP, I spent most of my life in the US, so I too would be useless in dealing with the businesses. Even the real estate company (something I know a bit in the US) is far too different back there.
Also, blatant corruption is simply not my cup of tea.
I tried to help them multiple times. I offered to sponsor them green card, but they consistently refused. I offered if they need help finding private equity to liquidate and just retire. Sometimes I wonder if my mom could have been saved with US quality healthcare.
Oh well, I did my best, there was nothing I could have done.
Fascinating article, but reading it I kept asking myself: Why not promote someone to CEO? Surely any top-level manager already working at the company will do a better a job then someone who's only qualification is working there 18 years ago.
The author had business experience having founded and running the successful CB Insights so it's not like some naive well-to-do kid took things over.
By the end you realize the author 1) researched the industry, 2) improved the product mix 3) grew the highest-margin product and 4) sold to a buyer with values that protected his workers and his dad's legacy.
Someone with that quality/ability is really hard to find, even at really big companies.
Author here
1. He died suddenly so would have been a good thing to explore and do with time. It certainly would have made my life easier :)
2. Building a business that is small to medium-sized with no brand recogntion in a tier 2 city in India doesn't afford you access to tier 1 talent. India's talent and talent preferences are incredibly different than the USA.
Similar vein question
> Atlas has a great team with lots of experience. I assumed if I was doing something really really dumb, they’d tell me
If that's the case why not sell it to them and make it a co-op?
Didn't consider this for many reasons:
1. Most importantly, we didn’t have the talent internally to do that. Running the biz requires a set of generalist biz skills and the company was comprised of specialists. They could tell me about issues in their domain but business requires skills across many domains. And running a biz of this size in a location as challenging as Nasik/Sinnar requires someone being the top dog as decision by consensus wouldn't work (rarely does).
2. Capital availability / accessibility - The team just wouldn't have had it. Indian credit and debt markets would not be available.
3. Non-traditional structure would have required a lot of education - Even if capital was somehow available (0% chance), this would have been an exercise in 'herding cats' and wasn't something I had time for. I was running a business here in the USA plus had a wife and 2 young kids. My work hours were already insane just operating the businesses. I was optimizing for a simple, clean deal for many reasons and a co-op would have been an amount of 'brain damage' I wasn't game for especially given factors above.
--
Finally, I'll say that I don't think this would have been feasible in India at the scale and location we were at for one other intangible and cultural reason.
And that is because the employee to owner mentality transition would be non-trivial to impossible. The gulf is just too big. The reality is that reimagining yourself as a founder or owner requires a different mindset. There is no 'leaving the office' especially at the scale of Atlas (small/mid-sized). You're always on call to some extent and all problems seek you out (or you have to go find them). This is not the kind of responsibility and weight most people want at the end of the day.
This is quite a good story. Since it happened in 2018, I wonder what’s happened to the business since then?
Pitch it to Bollywood, has script potential
The speech given to the Atlas team was really touching, I actually teared up a bit when reading through it.
@asanwal thank you for sharing this.
Amazing story - shows the importance of succession planning - worked for a family-owned company but the apples did not fall close to the tree - the sons and daughters could not match the father.
Like what happened to Wang.
Today they are technically bankrupt and reluctantly handed over control to seasoned management and they are spinning out parts of the company to raise capital to save the core business.
Very common that the children don't wish to run the family business – I always wondered why. Wonder how much things would have turned out differently had the Dad introduced the company to his son at a young age and "groomed" him to be the future leader of the organization.
interacting with parents as an adult is weird, you're expected to be perpetually deferential to them simply because you started your relationship that way. (perhaps even more so in asian cultures like mine and the author's). I'm not surprised that people would rather not have even their work lives pushed into that framework.
it's a luxury that modern life affords us. Traditionally boys would go into what their father has done, as he did his father and his father before him. It’s only relatively recently that society affords children an opportunity to branch out from the circumstances of our birth. The idea of royal succession seems less weird when the rest of the whole world is also organized that way
My father had a fragrance company (now owned by Givaudan) as client and every time he visited he came back with reproductions of famous perfumes (sampler size). I always found it interesting that they lasted longer or smelled nicer than the original. Of course, most of the time he only brought it back for mom.
First time, I visited, the company with my dad, I was surprised in how much things a fragrance is used. From perfume, shampoo but also cleaning products. It's a fascinating business.
> Candidly, my only qualification to run Atlas at this time was that I was the founder’s son.
It seems like an even more important qualification was that the founder's son was also a founder. Otherwise this would have been much less likely to work.
It’s an odd sentence to be honest. Being the son of the founder of a business has been the strongest qualification for running that business for at least 3,000 years.
On top of that he had worked in this same company for two years, had an Ivy League degree, had worked both in startups and large scale investment banking firms, and had founded and run an unrelated $100M+ enterprise.
Yeah, but other than that, ... ;-)
The author was born/raised in the US which, not explicitly mentioned, means his father must have spent most of his time in India, away from the family, running the business. If so, that's a big sacrifice that the son amply reciprocated.
Maybe. Frankly this is a very impressive outcome that is attributable both to the Father's business and management practices, as well as the Son's business and management practices. No matter how good you are at running a web business, if you inherit a totally fucked business with poor practices, very unlikely you could engineer this outcome.
My condolences to the OP and I was happy to read such a well-written article describing a fantastic outcome for his father's company.
Wonder if the author could speak about how him already being a founder played into the equation.
Let's say he was a software dev, no team lead, no manager, individual contributor. How would things play out?
Hi,
Having founded and run CB Insights certainly helped mostly cuz I had some sense of where to focus.
In this case, we had product-market fit to use a tech term. My dad's product was great.
And so I didn't need to worry about that. If I had to worry about that, this probably doesn't unfold as it did.
That meant I just had to worry about 2 things:
1. Making sure we were buying raw materials at rates that allowed us to sell the product profitably 2. 'Ringing the register' aka making sales. And that ultimately is not intellectually hard but just requires effort, i.e. researching, calling, emailing, etc.
Hey. This is completely unrelated but I wanted to ask if you provide an RSS feed for your blog? I did find a /feed page but I'm unsure if it's working.
I set this blog up 24 hours ago and just started moving old writings to it and still have another 200ish to go.
So the honest answer is I don’t know.
Tbh, getting on HN today was completely unexpected.
I believe you can subscribe via email for updates. And hopefully I’ll figure out the RSS thing soon as well. Thanks
OP here. @asanwal, in case you're wondering, a mutual connection of ours liked your LinkedIn post featuring this article. That's how I found this.
Gotcha and thanks.
I just started getting a few texts from friends saying 'your post is on HN' and was confused. Prob been 10 years since anything I wrote has been on here so was an unexpected surprise especially as the comments are almost all quite nice (didn't expect that :)
Looks like this is a WordPress site, and the HTML source does contain:
So I'd assume that https://anandsanwal.me/feed/ is indeed the RSS feed. IIRC, /feed/ is what WordPress uses for that purpose.I worked at CB Insights for a while. One of the best company to work for.
"Plus, margin is hard to rally the team around."
"Growth is tangible."
Love the way he packaged this!
This is incredibly well written (in addition to being substantively compelling). Bravo!
this was an absolute incredible story. I would absolutely watch a movie about this story. learning history and family through something that at its surface seems so cold and difficult to process is very intriguing, a triumph of small business, cultural differences (americanized indian returns to india), i sense a great film in this story. thanks for sharing!
Sorry to hear about your dad. Seems to have been a good and smart man.
This was a pretty insightful story. Thank you for sharing it.
My brother died almost 10 years ago and he ran his own software company. He had no plan, because he thought he could beat cancer. His wife had to get his passwords while he was on his deathbed.
The day of his funeral, his wife begged me to look at his work laptop and help her out. She even mentioned us being partners in the company. I was already running my own successful company at the time and had almost no time do this.
I found the time and saved her probably close to $150,000 in customers pissed off because my brother stopped handling support due to his illness, forgotten about purchase orders, and a website that he pre-paid for $20,000 and was never delivered because he died and never told them he was sick. They sent over the entire amount within a few days of me explaining the situation.
I never expected any money for this work, I was just trying to clean up the business and get it back to a functional level. A few months later, when she had time to grieve and think about things, she wanted to talk partnership. Her first offer was to pay me $15/hour, which I rejected (and laughed about later with my wife).
Her second offer was to give me 10% of the company and when her kids turned 18 in 8 years, they would get full control over the company (including my 10%). I was personally offended because she essentially wanted me to maintain and build up the entire company, take a very low percentage along the way, only to hand over the entire company to her kids (my nephews).
When I explained this to her and rejected the offer, she told me that I had no skills beyond 'answering emails' and that I didn't 'understand how business worked'.
Shortly after this, she found an email from my brother's old friend who was very religious. She had also recently found god and as a result, convinced this person that he needed to help her for free. For the last 6 or 7 years, the business has been in maintenance mode with this person answering emails, for free. I know the technical capabilities of this person and most responses are basically re-installing the software or rebooting the computer. I am also in the tech industry and the job this person has is about the level I was at when I was 15 (I'm 45 now).
The result was as I expected: Most of his clients stopped re-purchasing licenses because there is no more support or bug fixes and you also just can't trust the security of software after it hasn't been updated in 10 years.
She now has to work a minimum wage job making meals for the elderly (which isn't a bad thing) and the company is close to bankruptcy. It was good we were never partners, because I probably would not have been able to start my next business.
It took my brother over a decade to build his successful company, and a few years for his wife to destroy it.
> A few months later, when she had time to grieve and think about things, she wanted to talk partnership. Her first offer was to pay me $15/hour, which I rejected (and laughed about later with my wife).
That's an immediate red flag that tells me:
1) She doesn't value other people's time, but thinks that her's is invaluable.
2) She thinks this is a "simple job" (It never is, regardless of the business in question).
This is exactly right. After that first offer, I was just going to walk away. The sad part is that the business would have done very will during covid. It could have reached a new level of profitability.
She was able to take all of the money out of the company for a couple of years before the software contracts expired. After all the value was gone, she tried to sell the company for $1,000,000. The potential buyer almost laughed in her face.
She doesn't seem to have the experience to make it successful (either the ability to run it or hire) and you didn't have the time to run it either, given that, the company halting is almost a given as with any sole proprietorship when the founder suddenly dies
These are both good points. I sold my company a year or two after this and got into a new venture shortly after. I was looking for something different and could have made time to maintain the current company and even get new clients.
Great Story! I have a question.
Why didn't you elevate someone from inside to the CEO position? Seems like a great way to maintain ownership (and take care of people) while also rewarding the best employees.
Unfortunately, didn’t have the talent internally to do that.
Running the biz required a set of generalist biz skills and the company was mostly specialists.
Wasn’t your dad also a specialist in that sense (the technical founder as you put it)?
Great writing, btw.
Thanks. Dad was a specialist on the engineering/science side. He learned and grinded enough over time to become quite dangerous on the business stuff.
I guess he'd be what some folks would call T-shaped. https://en.wikipedia.org/wiki/T-shaped_skills
from the article:
> Option 3 — Find a young, aggressive, ambitious person to run Atlas
> [...]
> This would have been an amazing opportunity for the right person, but it wasn’t in the cards.
This is such a heartwarming story. Thank you for sharing about this Anand. I loved the part about how your dad’s legacy is all the children of employees who could continue their education.
Anyone know of any similar stories like this one? I don't know why, but I really enjoy reading these and hearing the thought process and decisions made.
> business is about growth or margin.
> To grow, we could do 1 of 2 things:
> - Sell more of our existing products, primarily Coumarin
> - Add new products
> If we focused on margin, that’d mean focusing on:
> - Increasing efficiency in manufacturing
> - Reducing expenses
Good insights. I’m curious if there are other models of business that are just as simple and useful… :)
heartwarming!
Wouldn't it have been better if ownership of the company, essentially comprised of the workers and managers, actually passed to the workers who knew what they were doing?
To me this just highlights the absurdity of capitalist ownership.
For them sure, not for OP and family? It wasn't run on a total profit share before OP's father died, it would be weird (and very bad incentive) if that suddenly changed.
No doubt that sort of thing happens sometimes, or especially donating an inheritance to charity, but it being the default would be more absurd to me, when it was already in 'capitalist ownership'.
The author answered that in another comment:
https://news.ycombinator.com/item?id=40766367
The business exists in the first place because of capitalist ownership.
in this particular instance.
But you seem to imply that if capitalism didn't exist, nor would chemical companies, etc. Something like this business would still exist if there was a need for it under almost any political-economic system.
There are numerous other ways for people to cooperate and work together, partnerships, co-operatives, etc, etc, that do not involve single individuals reaping all the profit of everyone's else's hard work.
IMHO any collection of workers deserve that their 'owner' at least understand the nature of their work, and ideally they should themselves be owners.
There are a series of overlooked axioms in that train of thought, in that:
- All people involved are capable of learning skills outside of their knowledge domain as quickly as those inside those domains (People interchangeability)
- All people involved won't have ideological splits for the direction of the company
- That everyone involved wants to partake in the risks of ownership (market uncertainties/shifts, illiquid buyout scenarios, dealing with ownership transfer headaches, new incoming co-owners, ownership dilution, etc.)
- That there is time outside of their work to manage the overhead of this co-op
- That the talent required to ease their workloads is receptive to the co-op concept, or cheap enough to hire (not likely) in cases where they just want a stable income (see point 3)
- That the decision overhead from the co-op is lower than the standard corporate structure (possible, & likely the easiest axiom to fulfill out of the list, if the time of the co-owners is cheaper)
The author of the post responded to a similar question made earlier: Certain mental, financial, & cultural logistics are just not there/available given the time-frame involved. The co-op ideal is wonderful, but it requires a series of fulfillments that not everyone is as receptive towards.
https://news.ycombinator.com/item?id=40766367
Some of the largest companies in Europe are co-ops, and they don't require employees to become CEOs overnight. Those companies still have recognizeable structures, just that the profits don't get sucked out at the whim of a small group of 'owners'; the employees have a stake in those profits and some say in how the company (that they maintain, and likely helped to build) is run.
The fact that there are co-ops still doesn't refute the fact that a series of prerequisites need to be fulfilled, just so that the co-op doesn't collapse in on itself. Co-ops exist, only after the requirements are fulfilled.
Furthermore (and more important for me personally), axiom 3 (That everyone involved wants to partake in the risks of ownership) still isn't addressed in the given response: What if I found a job in a co-op, but I don't want the profit sharing & just want a fixed salary?
So far, the best procedure that I've seen addressing this issue allows for the existence of non-member workers, from which workers can invest a fixed sum to become member workers:
https://www.reddit.com/r/cooperatives/comments/o9lyrr/commen...
> While I don’t think most people would ever find themselves in a similar situation (I certainly hope not),
I'm not sure what the author means by this. Sad though it may be, most people will experience their dad dieing.
And inheriting control of a company sounds like a 1%'er problem if I ever heard one.
What is OP wishing to spare the rest of us from, exactly?
I know exactly what the author meant by that. He meant losing a parent at a young age. It doesn't happen to most people.
I think he meant "inheriting a company in a sector you know nothing about".
The difference is that usualy after a few days you resume your normal life. In this case, he was constantly reminded about his father death.
It'd definitely not something I can relate to. My parents will leave me nothing, and have spent most of their life taking from me.