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Navigating Entrepreneurial Peer-to-Peer Organizations

Andrew J. Sherman, Partner, Dickstein Shapiro Morin and Oshinsky LLP

As General Counsel to the Young Entrepreneurs’ Organization (YEO) for nearly 20 years, I have experienced first hand, in a countless number of situations, the tremendous value that a peer-to-peer organization can deliver to leaders of emerging growth companies. Dozens of entrepreneurs have shared with me the importance of YEO’s forum groups, educational seminars, and networking events as applied to their ability to build companies and gain access to the resources necessary to avoid pitfalls and navigate through challenging times. In addition, many founders have cited the importance of access to mentoring and coaching that the peer-to-peer organizations, as well as industry groups, Chambers of Commerce, and trade associations, have provided for them.

The role that peer-to-peer groups play in supporting our economy is also growing in importance. Young Entrepreneurs’ Organization began with only 20 members in 1987; by 2004, its membership had exploded to more than 5,500 worldwide. If you are currently involved in a peer-to-peer network or are considering joining such a group, you should understand that certain structural, legal, and governance issues must be in place for the organization to deliver on its promise. Among them are the following:

  • Objective and Dedicated Leadership

Peer-to-peer organizations must have leadership that is passionate and objective. Getting such organizations started is not easy and keeping them going and growing is even harder. The leadership must be committed to devoting the resources needed to sustain growth, and it must also be objective. There is no room for hidden agendas, politics, or self-serving motives as a basis for decisions if an entrepreneur wants to take on a leadership role—or even just participate as a member.

  • Trust and Confidentiality

The success of a peer-to-peer network is built on the foundation of trust and confidentiality. For example, YEO’s forum groups, which are subsets of eight to 10 members who meet regularly to discuss company-building strategies and tactics from their own experience, would be shallow and meaningless unless each member embraces the pledge of confidentiality. The ability to share one’s deepest and darkest business and personal challenges in a trusting, caring, and truly helpful environment is a cornerstone of the peer-to-peer experience.

  • Clear Expectations

Prospective members and organizers of peer-to-peer networks should not expect a magic elixir to cure all of their problems at work or at home. Forum groups, educational seminars, and networking opportunities will provide an active and engaged member with a significant competitive edge. However, if expectations are set too high, disappointment will surely follow. The same holds true in a business coaching or mentoring situation—each party must clearly set expectations in order to maximize what he or she is looking for from the experience. Variables include time commitment, fees and costs, expertise, Rolodex access, timeframe, and confidentiality.

  • Circle of Friends (or Enemies?)

Many peer-to-peer organizations, as well as business and trade groups, cannot resist the quest for sponsors. The ability to raise sponsorship dollars may be critical to sustaining the organization. However, it can also be the beginning of the end of the integrity of the organization. No peer-to-peer organization event should look like the side of an Indy 500 racecar, e.g. cluttered with logos hawking sponsors’ own brands or value propositions. Yes, sponsors can play a role—indeed, the good ones can be very valuable—but those that try to influence the strategic direction of the organization or the content of events (or worse yet, view events as one big marketing bonanza) will send the organization into a spiral of destruction. Members will begin to resent meetings and feel like “the only sandwich at a picnic,” as sponsors overwhelm them with literature and hard sales talk. When members “vote with their feet” by not attending events, that is the beginning of the end.

  • "No Jerks Allowed" — Discreetly

The old adage that “one bad apple can ruin the whole basket” is true in building peer-to-peer groups. Member acceptance and standards of conduct should be clear, concise, and regularly communicated. The leadership of the organization — both nationally and at the chapter level — must take these standards seriously and not be afraid to enforce them when infractions occur, subject to the gathering and analysis of all relevant facts. If in doubt, leaders should seek legal counsel. When action needs to be taken against a member, such as suspension or removal, the undertaking should be handled with diplomacy and tact. Not only is this approach the best way to deal with sensitive matters, but it also will help avoid defamation or discrimination claims. Inaction, on the other hand, leads to frustrated members who lose confidence in the peer-to-peer process and in the leadership of the organization.

If you are currently involved in a peer-to-peer organization, you’re lucky if yours exhibits all of the above traits. If you’re about to join such a group, review the list and make sure the group you’re targeting does, in fact, comply.

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