Law of Unintended Consequences
A few states this week found themselves in precarious public relations positions as their legislatures tried to pass laws which would require internet retailers to collect sales tax in states where they do not have a physical presence. Amazon, Overstock and other big box internet retailers severed relations with advertising affiliates in those states to make the states’ arguments even more tenuous. Not only did the politicians in these states lose face as their governors threatened vetos, but the states lost tax revenue (and probably some jobs) from local businesses who were doing business with these retailers. While Rhode Island, North Carolina and other states feeling pinched by the recession went after deep pockets to fill their coffers, they found themselves with even more lent in their own.
This lesson is portable to startups. Intimately get to know your stakeholders (and competitors), and work with them to amicably resolve disputes whenever possible (even if only marginally satisfying) rather than slugging it out and risk damaging your balance sheet and image.
