In these years of entrepreneurship, what truly gave me a concrete sense of the word “business” was an experience from the past two years. There are three remarks made by friends who helped me over these two years that I would like to share here:
In any form of partnership, never give up the business;
Most organizations in this world are makeshift operations;
Do not waste too many words on people who don't get it.
What Happened
In mid-2023, I discussed a partnership with Q. The initial terms were to combine my industry experience and my company with his resources to jointly pursue university business. In the process, I introduced him to M, my technical partner. At the end of 2023, Q proposed not using my company and instead using his own, but did not offer a corresponding equity arrangement. I was not interested in his company either, so I withdrew. After that, Q and M cooperated directly, splitting 70–30, with Q taking 70% and M 30%.
The matter itself is not complicated, but when reviewing it, I realized that what I lacked at the time was a few basic judgments. Below is an analysis of this experience.
1. Where Is the Boundary of the Duty of Good Faith?
As the project initiator, I brought industry experience, company resources, and the technical party M into the cooperation framework. Although no formal agreement was signed, a cooperative expectation had in fact been formed.
Q directly cooperated with M without explicitly terminating the cooperation, which is problematic with respect to the implied duty of good faith in business dealings. In particular, after I withdrew, Q and M's cooperation directly benefited from the earlier resource integration, while I received no compensation—this comes close to “free riding.”
Of course, we should also look at it objectively: if Q's client resources were assets he had maintained personally over the long term, his cooperating with M separately would not constitute infringement; but if these resources were jointly developed during the cooperation between the two sides, exclusive appropriation would violate the principle of fairness.
2. Information Transparency Is the Prerequisite for Trust
Before Q and M cooperated, Q did not explain the situation to me. This deprived me of my right to know about the reuse of resources.
Commercial cooperation depends on long-term trust. Whether consensus was reached on terminating the cooperation is key to judging its nature—if both parties explicitly terminated it, then Q and M's cooperation is lawful; if no consensus was reached on termination, Q's conduct is closer to opportunism.
In addition, M, as an independent entity, had the right to choose a partner, but he did not proactively inform me of the change in cooperation, which was likewise inadequate in terms of information disclosure.
3. Three Lessons to Be Learned
Agreement first. All cooperation should be governed by a Cooperation Framework Agreement, clearly setting out clauses on resource ownership, non-compete restrictions, and exit compensation. The technical party should sign an exclusivity arrangement, and cooperation with other parties should require written consent.
Institutionalize trust. Mechanisms such as regular meetings and transparent financial sharing can turn implicit trust into traceable standards of conduct. However good the relationship, there should be evidence on record.
Securitize resources. Turn industry experience into quantifiable intellectual property—methodologies, industry databases—to avoid being copied without compensation. A more thorough approach is platformization: build a resource-matching platform and replace direct participation in operations with service fees or equity dividends, which will greatly reduce risk.
Conclusion
Looking back, Q and M's conduct may be lawful at the legal level, but it is controversial at the level of business ethics. The core problem is that they neither fulfilled the implied duty of good faith in the cooperation nor properly handled the balance of interests.
This matter leaves me with only one conclusion: No contract, no cooperation; no transparency, no trust.