Why Business Legitimacy Matters More Than You Think
I had an eye-opening experience recently that reminded me how quickly trust can be lost—and how hard it is to get back. It got me thinking about what separates legitimate businesses from the ones that make you want to run in the opposite direction. As founders, we're often so focused on building our product, finding customers, and keeping the lights on that we sometimes overlook the basics of business legitimacy. But here's the thing: those basics aren't just nice-to-haves. They're what determine whether people will want to work with you, invest in you, or recommend you to others. What Went Wrong (And What It Taught Me) 🚩 I recently encountered a startup that looked promising on the surface but fell apart under basic scrutiny. No formal agreements, vague communication, requests for personal information without proper context, and defensive responses to reasonable questions. The whole experience made me realize how much we take legitimacy for granted when it's there, and how obvious it is when it's missing. More importantly, it made me think about what we as founders need to do to build that trust from day one. The Foundation: Clear Agreements 🤝 This might seem obvious, but you'd be surprised how many early-stage companies try to operate on handshake deals and verbal agreements. Formal contracts can feel heavy, but clear agreements don't slow you down, they speed you up. When everyone knows exactly what's expected, you spend less time managing confusion and more time doing actual work. This means being clear about expectations, putting important agreements in writing, and following through on what you promise. Simple templates can work fine—just use them consistently. Communication That Builds Trust 🗣️ One of the biggest red flags I encountered was inconsistent communication. Different people giving different answers, vague responses, and the classic "we're still figuring out the details" dodge for basic business questions. Honest communication doesn't mean you have everything figured out. It means being upfront about what you know, what you don't know, and what you're working on. People can handle uncertainty much better than feeling misled.