I’m a firm believer that in general, “people do business with people they like“. I know there are exceptions but as a rule I stand by this.
In order to like someone in a business sense does not mean you need to be mates; there needs to be a mutual respect between each other that business will be conducted in a manner that you both expect.
When carsales looks at an international acquisition target, local management is a key component of the decision making process. Very early on in the process I like to understand what the local management structure is going to look like and ascertain if there will be issues from day 1 after closing.
“People do business with people they like” takes on an extra meaning when the management you are relying on to run the day to day operations of a business you have invested in is on the other side of the world. A true mutual respect as people first is important in this.
This is why dealing with and forging close relationships with local management is a key component as a strategic investor. The structure of our partners in our 4 international acquisitions (Webmotors.com.br in Brazil, Encar.com in South Korea, Soloautos.mx in Mexico & Chileautos.cl in Chile) are somewhat different but the relationships we have/are building are very similar. In each business we are very close to the executive management; talking on an almost daily basis and sharing more than just business.
When we started Digital Motorworks, very early on we did some business with News Limited’s then new digital arm called News Interactive (News Digital Media) for their online jobs platform Careerone. We saw our personal relationships (we didn’t know them beforehand) as important and worked hard on it. Our work with Careerone expanded (and then exploded) and before we knew we were performing the same services to The Times of London (News International) which then spread by recommendation to TES Education and Emap (also both in the UK). When News were looking at starting an online automotive platform they came to DMi first.
Yes DMi had some nice technology that served their needs but I have no doubt the relationships we formed within News Interactive were the driving force behind establishing our brand within their business.
Even internally, it is hard having a workable business relationship with someone you simply do not like, trust and/or respect.
“People do business with people they like” can take on a number of meanings. It may be “just business” but business involves people and where people are concerned, it is better to like people than not.