Business is built on trusting the other person to do what they say they are going to do. This is a relationship that extends across the entire business spectrum, and controversy aside, the issues with the Crunchpad/JooJoo Fusion Garage and Techcrunch demonstrates just how important it is to check your business partners and make a cold assessment as to how trustworthy they are.

Kraft Foods in their Code of Conduct sums up trust well.

Trust is Fragile. It makes many years to build, but can disappear in an instant. Source: Kraft Foods Code of Conduct (Opens a PDF)

Finding good responsible business partners is not an easy task. It is even more difficult when you are trying to do something novel and unique. Some business partners just are not going to work out, this is why you need to look at business partners carefully. What is disturbing from the post on Techcrunch this morning is the level of information about how shady Fusion Garage was. What is amazing is that Techcrunch continued the relationship. There is a lot of cynicism that can undermine the effectiveness of IT partnerships, and watching this very public breakup of Techcrunch and Fusion Garage should make anyone looking for an OEM/ODM partner to stop for a moment and think about how trustworthy the people we do business with actually are.

Even Google has their moments with trust, with the words of CEO of Google talking about USA Patriot Act and how privacy is not a guarantee when using Google products or services. This has caused a lot of angst and some interesting conversations online, much like the breach of trust between Fusion Garage and Techcrunch.

What is amazing is that Techcrunch did not pull the plug on Fusion Garage once the nature and background of the principles became known. Some of the comments in their note about the federal lawsuit filed tend to confuse the imagination, if Techcrunch knew the company was shady, why didn’t they pull the plug earlier?

Fusion Garage is, and always has been, a company on the edge of going out of business.

The company was constantly raising debt from unsavory investors, borderline loan sharks, to make payroll.

Source: Techcrunch

While I have deep sympathy for Techcrunch, Michael Arrington and everyone who worked on the project, what is simply amazing is that Techcrunch knowing these things about the company did not pull the plug and find another OEM/ODM for the project. Everyone in the blogosphere would have understood and supported Techcrunch if they said that they needed to find another OEM/ODM for their project. We would have waited patiently for the toy, we would have been still talking about it and offering our advice and our support.

Now we are simply looking at two former partners on a project where it was the duty of Techcrunch to be evaluating their technology partners. We all want to trust, but trust is fragile and it is easily destroyed by the most simple of issues. When a business partner becomes too much of a liability or they do not look like they have the wherewithal to bring a product to market in a timely manner, then any company needs to reevaluate the relationship.

While I am not a lawyer, the document embedded at the end of the Techcrunch article which forms the basis of the lawsuit is actually interesting and worth reading all the way through. What is interesting is that the JooJoo domain was registered 10 November 2009, fully 7 days before the relationship was “terminated” by Fusion Garage.

Registered through: GoDaddy.com, Inc. (http://www.godaddy.com)
Domain Name: THEJOOJOO.COM
Created on: 10-Nov-09
Expires on: 10-Nov-11
Last Updated on: 10-Nov-09

Source: GoDaddy

This would demonstrate some serious issues with Fusion Garage, and the original lawsuit document is a very good read. I’ll probably end up using this in my education job at CityU of Seattle in my Intellectual Property Class as a case study. I’ll post the case study publicly when the entire case is over with, but for now, this is a great learning tool, not just for students, but for anyone who is in hardware manufacturing.

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