Nasir and Matt discuss the potential benefit of PiinPoint, the digital location finder, will have on small businesses. They also answer a question on whether you should make the first draft a contract.
NASIR: Welcome to Legally Sound Smart Business!
This is Nasir Pasha.
MATT: And this is Matt Staub.
NASIR: And we are starting our new format at Episode 25 – a quarter of the way through to a hundred. I think that’s 1… 2.5 percent of a thousand.
MATT: Great math lessons we’re giving here.
NASIR: Is that right? I don’t even know. I’m probably off.
MATT: Yeah, 0.25 percent is correct. As long as you put the percent after it.
NASIR: Perfect, yes. Or 0.025 which is a decimal.
MATT: It would be 0.0025 or, no, you’re right.
NASIR: No, 0.025.
MATT: Sorry, I screwed up at the beginning.
NASIR: All right. Well, so long as we got our math correct. Good thing we’re not mathematicians and we’re attorneys.
Well, let me talk about this new company – I guess it’s not a new company. It’s new to me. PiinPoint – I don’t know if you’ve heard about this but it’s a pretty unique thing that they’re doing. It’s this digital platform and it basically allows companies to, first of all, you have to pay for the service, of course. Once you’re in, it allows companies that want to add a new location – or maybe add a first location, I suppose – to use their information, their data to find the most ideal location for your business.
MATT: They just got about $250,000 in funding but it’s still relatively new-ish. I don’t know if they even have a model that’s even fully functioning yet but this would be pretty cool for businesses looking for a new spot.
NASIR: Yeah, it seems like they really take data and analyze it. They do everything from monitoring locations, your locations, exploring new locations, reviewing your competitions’ locations and things like that. I don’t know what kind of data they’re actually collecting and how they’re accessing it but I think the most important thing to get from this transaction is for startup companies, I think they said – as far as what they disclosed, they started in July – right now, they have only around ten customers but they were able to raise $250,000. Understand the concept here is we’ve hear a lot about this minimum viable product is get out to market in the fastest way possible and see if it’s viable. This company was able to show that they were able to attract ten customers and it seems like they’re actually pretty sizeable customers as well and raised $250,000 overnight with angel investors.
MATT: I just went to the website. Right now, you can only sign up for the pilot program. But I’m really interested to see how they do this because we still don’t really know. I’m sure they obviously have some sort of algorithms that they use. But is it based on people checking in at locations? I don’t know what access to data they even have. I think it can be a good thing, especially for startups. Location is pretty key. They say that’s one of the most important things you have is location.
NASIR: Yeah, especially if you need a retail environment. I had a friend back in high school and his family owned a Long John Silver franchise. I remember distinctly that one of the reasons why it went out of business is because it was at a corner which was very difficult to get at in the sense that the driver would miss the line and so forth. Just because of that alone, it wasn’t producing the amount of customers that it needed. So, location is obviously important. But getting the information and data, getting this information that probably these bigger companies have ready access to through their market research but being able to aggregate it in a way that’s reachable to the smaller guy I think is pretty huge.
MATT: Yeah, just like the frozen drink bar that has been open up in Downtown San Diego. San Diego is one of the biggest beach towns – it has the most beaches in the US – and for some reason they opened up downtown, a frozen drink place, not close to any beaches at all. They probably could have used this. But I wonder too if it just gives locations or if they actually corresponds to real estate that’s open, too. Like, is it this actual building or is it just this general area? It’s hard to say whether this could be worthwhile for businesses. I think it can but we also have to look at price point and whether it’s useful or whether it’s successful, too. But I think this can be a good thing.
NASIR: Very good.
MATT: Well, let’s get into the question of the day here. This comes from a tech company in California.
“If I’m doing business with another company, is it better to have them draft the contract or should I make the first offer?”
NASIR: Oh, that’s a good question!
As attorneys, we always want to use our own draft but the question is too, is it better to have them draft it? If you don’t have an attorney or not, that makes the question a little bit more complicated.
You know, sometimes, I prefer – especially if it’s a transaction that is very easy and I just don’t want to draft the whole thing, sometimes, I like it when the opposing party drafts it because I can easily redline it and revise it to my liking. Sometimes, also, you get an idea of what they want to do with the actual transaction and get some of the business terms out in there and you can use it as a tool for negotiation. It’s almost like who asked for the price first or who names the price first usually loses, right? Same kind of concept.
I don’t know. What are your thoughts on this?
MATT: I think that’s a key part of it. Someone like you or me or an attorney might know or should know what they should be looking for in an agreement. If this is someone that’s not as familiar with what the contract should have in it. Maybe it could be helpful for the other side to draft it first. It might still be helpful for the other side to draft it first because you might not even know what you’re doing but, at the same time, you still don’t know what important things need to be in there and maybe the other side slips something in there that you don’t even notice and it’s very detrimental to you and you just sign off on it.
So, there is something to be said about drafting it first but I think, either way, it’s probably better to at least have some knowledge of the substance in the specific clauses of the agreement. I agree with you; there’s something to be said about the other side sending you their agreement so you get kind of in their mind what they’re thinking and it’s not a final draft by any means so you can always make changes. Maybe they make it very favorable to their side – as they probably would – and you can always make the necessary changes to make it more even or even favorable to you.
NASIR: Yeah. Also, I think even working with our clients, they sometimes are in a rush to get everything into a contract, especially if you expect negotiation, if there’s some business terms here and there, especially working with investors or if you’re acquiring a company or what-have-you, then I think it’s more important to just get the general terms, maybe use a term sheet or a letter of intent instead of getting into the actual agreement because there’s so many different ways that you can get into trouble once you start with a form and the business terms start to change and then you’re working with a form, especially if you’ve got non-attorneys working on the document and you’re using a template and editing it yourself. There’d be all these irrelevant clauses that don’t make sense and end up getting yourself into trouble.
But this guy mentioned who should make the first offer – that’s a little bit different, right? Obviously, well, I don’t know if it’s obvious but I find it better if the other party makes the first offer in that respect.
MATT: Right. If you’re drafting the contract or making the actual in part of the agreement, I would hope you’d have at least discussed the price or some of the terms before just jumping into it. Maybe they haven’t but, yeah, I like the other side too making some sort of offer in terms of those important provisions. It’s a negotiation process. Nothing’s final until both people sign on the dotted line.
NASIR: They’re never dotted anyway. I mean, it’s a solid line nowadays.
MATT: That’s true.
NASIR: Terrible idiom. Well, anyway, I think that’s our episode – our nice short episode for you guys to listen on your way to work or on the way back. You guys requested more of us so, instead of just getting a long episode a week, we’re going to do three short episodes – nice, short and sweet. I think, on our next episode, we’re going to talk about office space which I’m kind of excited about.
MATT: Oh, yeah, looking forward to that one.
NASIR: All right. Well, send your questions in to firstname.lastname@example.org. Of course, visit our website and – also, we haven’t said it in a while – leave a review on our iTunes. You know, that helps us out to get more listeners.
MATT: Exactly. With more episodes per week, now you have more opportunities to leave reviews, too.
NASIR: Very good.
MATT: Even though you can probably only leave one, but who knows?
NASIR: All right, thanks for listening!
MATT: Keep it sound and keep it smart!