When big names backfire

When starting and growing a business, it’s fair to say you need a bit of front. Making your business look bigger than it actually might be is a skill that fast-growth entrepreneurs need.

But our extraordinary expose of a new negotiating business shows, there are some clear lines that you don’t cross.

The idea behind the business, called The Negotiator, is actually a reasonable one. Wealthy people who were buying a big ticket item – think a super yacht or a racehorse or property – would go to The Negotiator hoping they could reduce the price.

The Negotiator would turn to its panel of big-named associates and get them to try and strike a deal. Whatever savings could be generated, The Negotiator would keep 50% and half of this would be passed to the panel members who struck the deal.

But the former Gold Coast real estate agent behind the business, Jaydan Jensen, didn’t just want any names on his panel of negotiators – beautifully presented packs were sent to celebrities, politicians and entrepreneurs, from Ian Thorpe and Jeff Kennett through to James Packer and Gerry Harvey.

Many of these big names feature in the elaborate promotional material. While Jensen makes it clear these are only people who have been contacted, and they are not involved in the business in any way, the prominence given to the names is cheeky to say the least.

Not surprisingly, many of those big names contacted were not happy to see their names used in the promotional packaging. Gerry Harvey filed the pack in the rubbish bin. Jeff Kennett’s EA said he was “annoyed” to see his name in connection with The Negotiator.

If using celebrity names was cheeky, using the logos of top-end-of-town firms PwC, Freehills and banking giant Citi could prove to be downright silly.

Despite being named in the promotional material as being right behind The Negotiator, PwC is furious with the way its brand has been used and legal action is on the cards.

It’s tempting to write this off as a naïve misadventure by a young guy with a big idea and some big spin. But the story gets murkier when you know that the company is linked to convicted fraudster Jon McKenny, who spent four years in jail after ripping off investors in a firm called Lifestyle Property.

Jensen originally described McKenney as the man who had the idea for the business and funded it. An associate of Jensen, John Williams, later said McKenney has not put money into the business and was simply a friend of Jensen’s.

Two clear lessons stand out for me in this whole episode.

Firstly, while trying to launch your business with a bit of reflected glory – be it from customer testimonials or big name customers or some sort of endorsement – is a reasonable tactic, there are clear lines that should not be crossed.

Using names and company logos without express permission is not on. And the bigger the names, the more trouble the misuse will bring.

The second lesson is short and simple: Be careful who you make friends with. Very, very, very careful.

James Thomson is a former editor of BRW’s Rich 200 and the publisher of SmartCompany and LeadingCompany.