Partnerships and Joint Ventures are great ways of quickly adding new skills and resources to your business. Pete and Dom discuss the differences between them, and some ideas on how they can benefit different types of businesses.
Action Steps: Look for opportunities to create a Partnership or Joint Venture with someone who has a complementary skill or resource.
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Partnerships and Joint Ventures
Dom Goucher: Welcome everybody, to this week’s PreneurCast with me, Dom Goucher, and the fully fit for a second week, Pete Williams.
Pete Williams: Hey, hey. How are you, mate?
Dom: It’s still a novelty that you’re fully fit after the craziness of all the Ironman training and everything, then you lost your voice and stuff. You had me scared for a while there.
Pete: It shouldn’t be a novelty.
Dom: I’m going to say my thanks for a few weeks more yet, that you’re back on.
Pete: I was only off for a couple of weeks. I’m definitely back.
Dom: Alright. So, come on then. I now feel fully able to ask you what craziness you’ve been up to this week.
Pete: Oh, man, lots of shenanigans in bits and pieces. But, what’s happened this week? I’ve been reading a galley version, or a prerelease version of an amazing book that’s coming out next week, I think it is, on July 19th, for those who are listening in the future. July 19th, Ryan Holiday’s book, Trust Me, I’m Lying: Confessions of a Media Manipulator is released. And, I have to say, if you are into online media or marketing on any level, this is definitely a must-read book.
Dom: I just read- you let me have a look at your galley copy as well, and I just kind of read the first chapter. And, my mouth hung open while reading a book, which is quite a novel experience. It’s quite an amazing thing to read. I’m really looking forward to reading the rest of it. But, you kind of gave me a heads up on that, because Ryan was interviewed by Chase Jarvis on his live web TV show thing the other week, wasn’t he?
Dom: Which was something else.
Pete: Which was really cool. So, for those of you who don’t know Ryan, Ryan’s the media strategist behind some big, big people. Tucker Max, who wrote I Hope They Serve Beer in Hell. Robert Greene, The 48 Laws of Power, The Art of Seduction, The 33 Strategies of War, and a new book coming out shortly called, I’m going to get it wrong, Mastery which is really cool.
And Ryan is also the director of marketing, I think it is, for American Apparel, which is obviously a global brand. All controversial brands, they are, and Ryan is the mind behind that and he’s only 25 or 24 years old. To be the marketing director of a listed public company at 22, I think he was when he got the role, is pretty significant.
Dom: He’s actually one of the few people I’ve ever come across who makes you look like a slacker.
Pete: But, he’s been very heavily involved in the media manipulation and the exposure marketing of some pretty heavy hitters that a lot of people probably would know about. He’s, for want of a better term, done a confessional where he’s sort of exposed all the tactics and marketing ploys he has done over the years to get notoriety and exposure for his clients online and subsequently, in what’s traditionally classed as the real press- newspapers and magazines.
Basically, the book is broken up into two halves. The first half is a story of all the things he’s done and how he did it. Then, the second half is basically how the online media is broken and where the problem is and things like that. It’s a very, very engaging read. I read the entire book in two days.
Then, yeah, Ryan and I had a conversation a couple of days ago, which we have recorded and I’m going to throw up online at some stage in the next week or so, to sort of help him out with the book launch, because it really is a must-read book for anyone in the online media and marketing-type industries.
Dom: Absolutely. I mean, just the bit I read, it’s almost, to me, it struck me as- it’s not a step by step by any means. But if you kind of take the lessons out from in between the story, it’s a great story. If you take the lessons from in between the story, it’s almost like The Guerrilla Marketing for the 21st century.
Pete: Yeah, absolutely, that’s a great way to describe it. But, it’s even more than that as well. It’s a ridiculously well-researched book. Ryan’s a crazy reader. He reads four or five books a week, so you’re right; he does consume a lot more content than I do. And there’s a lot of thought and I guess, for want of a better term, psychology and understanding around why what he’s done worked and why the industry is the way it is.
There’s a lot of case studies and examples of not only stuff that he’s done, but other stuff that’s happened in the media online and in marketing online. And also, there’s a lot about the roots of just the media industry, and how it’s grown since the Yellow Press back in the 1900s and things like that. It’s an awesome book. Trust Me, I’m Lying by Ryan Holiday is very much a must-read book. It’s a really, really make-sure-you-read-it-type book. It’s not like, “Yeah, it’s really cool, I read it, I enjoyed.” It’s a must-read.
Dom: Awesome. Alright, well, let’s get on with the show. What are we talking about this week?
Pete: Well, something you mentioned the other day on one of the Q&A calls we did with some clients recently. It’s all about joint ventures and partnerships. So, I thought we’ll take that point and question and discussion area that you brought up, and we can put it out to the masses here on the PreneurCast show.
Dom: Cool. I think we gave some good feedback to the clients on that call. And yeah, I thought it might be worthwhile bringing it out to the wider Preneur Community as a general topic. So again, as we like to do, framing, framing in context. Can we just define joint ventures and partnerships for everybody to make sure everybody’s on the same page?
Pete: Yeah, of course, absolutely. Joint ventures, in my definition, is probably a little bit different to the Wikipedia definition. To me, a joint venture is sort of a joint coming together of a particular project or venture. So, it’s not necessarily a long-term partnership business arrangement. It’s like a short-term project you do with somebody else to get a result.
Whereas, a partnership, in my opinion, is where you sort of start a business or a sustainable ongoing concern of some description with someone else as partners. That’s how I define those two roles. To give some examples, if you are going to open a retail store with somebody else and do it together, that’s a partnership.
If you’ve got a product you want to take to market and someone else has a platform or a community to sell that product into, and you’re just going to do a launch together, that’s a joint venture. So, those are the definitions in my context, and in my world anyway.
Dom: Cool. So really, when I flagged this in that call, it was about the benefits- specifically, in my response, it was about the benefits to people of a joint venture. This idea that you’ve got something that you want to get out there to the world, and I position a joint venture as a way to do that and kind of leapfrog part of the process. So, can we talk about the relative benefits?
Really, I’m focusing on joint ventures. Because partnership to me, as you said, is going into partnership- this traditional idea that people have, as you say, if you’re opening a store with somebody else that you kind of sign up and you split this and you do that, and you agree. It’s a long-term arrangement based around a business. Whereas, a joint venture can be a one-off thing for a particular purpose.
Pete: Absolutely. I just want to mention one quick thing about partnerships that kind of had been mulling around in my mind since we spoke about this the other day for a topic of the show. It’s only a really quick point, but I know a lot of people who listen to this show are from that internet marketing community and that world, and have learned a lot about online marketing and haven’t implemented to a great extent, or haven’t found the product to take to market.
They have the skills to market, but just don’t have the underlying product or where to start. The advice I give to people is team up with someone else who’s product-focused but not marketing-focused. I know we speak a lot on the show here about the need to be worrying about the core of a business, which should be sales and marketing, and leave the delivery of the product, the mechanics, to somebody else.
So, if you step up and think of the perfect business, instead of hiring people to look after the mechanical side of things, why not partner with someone who’s got exceptional skills in that area. They can focus on what they need to focus on, which is the product delivery and the product development so you’ve got a good product to sell. And you take your marketing skills that you’ve learned online, and team up together.
Maybe there’s a retail store down the road that has a great product, but isn’t really getting the traffic to their business- whether it’s foot traffic or web traffic they need. Maybe you can partner-up with them and take care of the marketing of that business without having to ever worry about the mechanical side of things, just focus on where your skill set is.
Whether it’s finding a developer of a product, an inventor, or a retail store as I said, that could be a great partnership and a fantastic way to get started actually, teaming up with somebody who needs the skills you have rather than trying to become everything and not only learn the marketing, but learn the product and learn the development, which a lot of people try to do when they’re starting out online, or starting out in any business.
You’re much better off to partner with someone who complements your skill set. And, if you’re a marketer, partner-up with a product person. If you are a product person and are struggling to market your business, well, maybe, if you’re not willing to move away and change your focus to marketing, you might be better off just sticking with being the product mechanical person, and finding someone else who can do the marketing for you or with you, and partner that way.
Dom: That’s a great example. It really does speak to something that we’re very, very big on, which is leverage and playing to your strengths. A lot of people get sucked into- and your example there was great because it’s one of the big things, certainly in the online information marketing industry, people get sucked into, which is they realize that the next step is to develop a product of their own or whatever it might be.
So then they start researching the mechanics, as we call it, of product development. They start worrying about video camera specs and dimensions of online video and data rates. I won’t give everybody else a headache and mention any more technical terms, but you get the drift. If you could partner with somebody that had all those skills, if we’re talking on a grander scale; otherwise, you would just find somebody and outsource the job.
But, partnerships are about complementary skills, really, aren’t they? They’re about complementary something. So, you’re good at marketing, somebody else has got the product. Or, somebody else is good at marketing and you’ve got a product. Somebody might be good at online promotion, social media, whatever it is. But, there’s something that you’re looking for on an ongoing basis to create some form of business.
And those opportunities are everywhere, you just have to look around. And from my perspective, it is about looking at whatever is missing from your arsenal, from your skill set, right now, instead of trying to learn that skill and trying to develop that skill from the ground up. Maybe just something that you’re not really good at, or that you’re not going to be good at. Rather than using that effort, just go out and find somebody that’s already got it.
Pete: Absolutely. And I think the big critical thing around partnerships is the thing you’re lacking shouldn’t be a friend. What I mean by that is a lot of people, myself included, have gone into business or projects with somebody whose skills are the same as mine and we were friends and we thought that would be a really cool thing to do.
Yet, what we found out is the business still lacks the other side of the coin. Whereas, for example, you and I working together, has been really great for me. Generally, from a very high-level perspective, most of the original relationship was around me looking after the core of the marketing and the strategy sort of stuff, and you were looking after the mechanics for me and doing the mechanical side of stuff.
Now, obviously, as people are aware through the show, you’re more than just a mechanic. You’re very, very smart, which has been great. But, primarily, what works for us is that you’re the mechanical guy and I’m the core guy, on a fundamental level. Now obviously, there’s crisscross over there, which works really, really well. But, fundamentally, we are both sides of the coin.
Dom: Yeah, and I do think that is a perfect example of exactly that. I love the point that you made there about a lot of people do get into partnerships with friends or people they resonate with, thinking that it’s a great business opportunity. “Hey, let’s start a business together, that’s really cool.” You might even do it with your partner- with your wife, or your husband, or boyfriend, or girlfriend, or whatever.
But, if you don’t have those complementary skills, the other side of the coin, as you call it, then it can be a recipe for disaster. Whereas, you and I absolutely is a great example. I mean, I almost interrupted you to make a joke about me not really liking you and us not being friends. But, in all seriousness, our partnership started for exactly the reason that you stated.
You have the business skills and you also have the core content as knowledge that you wanted to get out there. But, the idea of trying to create your own podcast and submit it to iTunes, or create an entire information product and the platform to deliver it and all those things, it just was daunting to the point of it not being worth you trying to do it.
And then you found me and I have this technical knowledge, the mechanics as we call it, to be able to implement your core content. But, the thing I liked at that time was the connections to the industry, the marketing ability and knowledge, and the business knowledge that I would have needed if I wanted to create my own product. I just didn’t have those things.
I could have created the world’s greatest product that nobody would have heard about, certainly not on a grand scale. So, partnering together, we’ve created some great products together now. We’ve been doing the PreneurCast for well over a year. We created the 7 Levers Home Study Course, which is great.
We now work together with Preneur Platinum. And, we’ve even done another huge project now which we will be launching to the public real soon. But, that all stemmed from that initial partnership and that complementary skill set, which is the cornerstone, as you say, of a partnership.
Pete: Something you mentioned there was about the new project, and that almost parlays into the next part of the show. That new project is a joint venture that we’ve partnered, for want of a better term, or we’ve got a joint venture with somebody else who actually has the complementary thing that we needed for that particular project, which is a platform and a hungry audience for what we’re putting together for everybody. So, that’s a perfect segue into the next part of the show of what a joint venture is, where they’re applicable, and where they should be used as a business and marketing tool.
Dom: Away we go.
Pete: So, as you said earlier on, the joint venture is a project-based type arrangement. It’s a partnership on a project basis with a significant clean, visible outcome or finish line. So, for this example, I was approached by someone who has a pretty significant client base and reputation and platform to do a project together where I’d do the content.
There were some skills that I have that he thought was very much filling a hole in the marketplace. He had the audience who wanted that hole filled and that problem solved. So, we’re joint-venturing on that particular product, and with your help, put together the actual content and the program. He’s looking after the marketing and the platform.
We’re obviously going to subsequently take that entire ramped-up project and offer it to other joint venture partners down the road to promote it to their clients. So, there’s a joint venture on a joint venture in that scenario. We’re doing the product, he’s doing the marketing and bringing the clients for the initial launch. But, he’s also going to be bringing the joint ventures [JV] for the JV launch at the end of the day. So, that’s what we’ve done in that scenario.
Dom: Yeah, and it sounds a little bit complicated, but it is really simple. Right now, if you look at Pete and Dom as an entity that can deliver an information product, or a body of knowledge ready to roll, what you were approached to do was to deliver that body of knowledge. And then, the nature of the joint venture in this case, with the person that invited you to do that, was they had the marketing funnel, the audience, the customer list, whatever you want to call it, ready to go.
But again, they didn’t want to invest the time in research, development, production, and all that, to get this product ready to put it in front of their audience. So, they offered us to joint venture- they offered you the joint venture on this one thing within this space, within this finite limit of this one product. You develop the product, they will market it.
If we then wrap that up, that working together, we’ve got a delivery platform, we’ve got initial material, and we’ve got proof that we can do this and deliver, and the product’s got great reviews and case studies and things, we can then take that whole model and move forward to make yet more sales and reach a wider audience by then looking for that next step of joint venture. Which is a wider audience, a larger list of people to reach.
So, each time, we’re applying the concept of joint venture, but it’s still within this one product, within this one thing that’s finite. So, it’s not a partnership. We’re not agreeing to work forever more with this person. It was just for this one thing. It’s a great example from their side of the fence. They identified a gap in the market. They identified information that their customer base would find valuable.
But, they didn’t want, or didn’t have the capacity to fill that need in a timely manner, with the resources and whatever that they had available. So, they looked for somebody to come and contribute, and they did that on a joint venture basis. Which is another way to look at ventures. Either you’ve got something that you want to take out to the market- you’ve got a product or whatever and you want somebody to help you promote it, which is a classic joint venture.
Or, you have an audience and you think that there’s something that they would like to receive, consume, whatever. So, you go looking for somebody to provide that. Because looking for somebody to provide something to your audience adds a value to your audience without you having to provide it yourself.
Pete: Absolutely, right. Something I want to touch on is what was the spark of this episode idea? Because obviously, when it came up in conversation recently, there was always the initial spark. So, is there anything we should address around that, that’s worth touching on?
Dom: The question that we got on the client call was that somebody was basically starting from zero. They had a lot of knowledge, a bit like you, although without the starting from zero part. They had a lot of specialist knowledge in an area, and they really thought that they’ve got a great opportunity to create an information product, create some training, and whatever. But, they basically said, “But I’m new to this,” in this case, it was an internet marketing thing.
They said, “I’m new to this whole way of delivering, whole way of producing, and it just seems like a huge daunting thing to go from where I am to producing this information product. Potentially, even knowing exactly what product people would be interested in. And then, after I’ve produced it and I’ve gone through all that, then marketing it and selling it and delivering it.”
I said to them at the time, we talked about it, we discussed it with them, and we suggested that looking for a joint venture partner- but focusing on the joint venture part- might be a great way to get this project off the ground. Looking for somebody who had an audience who was in the same market or the same demographic or whatever, as their product would be aimed at. And then, asking that person basically, “Hey, if I product this, will you market it?”
Anybody who’s already possibly got an experience of marketing and/or delivering those products, might be a really good partner because then you’re literally just producing the content. And maybe, like us with our JV partner, we’re actually delivering on their platform at the moment, which is great for us. We literally are delivering content and their team is worrying about the logistics of payment processing, content delivery, support, all that kind of thing. And, we are literally just content delivery, which takes a weight off us.
Pete: So, where this comes from, just to make sure all the pieces are put together, is that this joint venture strategy is a ‘getting started’ strategy almost. I know one of questions we got off the recent survey that we sent out to the Preneur Community was, what would you do if you had to start again? Or, what would you do if you’re in an online play to get started? Now, if you’re wanting to start something significant, it would be that partnership model I spoke about before.
But, if you are a product-based person, it is going to someone and saying, “I’ve got a product, or I’ve got a plan for a product, I’ve got an outline of a product.” Almost like the book publishing space. It’s like, “I’ve got a product here, you’ve got a way to get it to market.” And, traditionally it’s a publisher; these days, it’s somebody who has a blog with a huge audience or subscriber list and saying, “Here’s my plan for a product. Do you think we could do this together and you sell it as a joint venture to your particular list?”
That’s a very easy to get started way if you are a product-based person. Obviously, if you’re a marketer you have to look at it the other way and say, “I’ve got marketing skills,” whether you’ve already got a platform and a community, but just no product to sell to them; or whether you’ve got the skills and ability to grow that audience very quickly, you need to find someone who has products.
And go, “Hang on, here’s a market, here’s a need, here’s a problem.” Then try to find someone who has the solution and make a joint venture on it to create a brand new, wrapped-up package that solves a problem of the audience that you’re aware of or that you can touch and you can reach. Is that the right angle of the question that popped up that caused this particular show?
Dom: Absolutely. My response, our response to the original question to them was exactly that. As you say, it’s a great bootstrapping technique. If you’re starting from scratch and you think you have an idea, then getting the first and initial kind of boost of traffic or sales, or just awareness out in the marketplace, it’s a great bootstrapping technique as you as the content provider.
But, if it’s you who has a certain skill, knowledge, marketing for example, it’s a great way of finding extra business, finding uses for your skills and growing your exposure to the marketplace that way. What brought joint ventures to my mind, other than obviously, our example that we’re working on right now, was a piece I read a while ago. And, it was on the topic of bootstrapping.
It was on the topic of very quickly starting out with possibly no audience and very, very quickly moving yourself to a large audience with a big exposure for your product. I think that’s why I find joint ventures so interesting and why they might be useful to the listeners, to the Preneur Community. The idea is building a client base, building a list of buyers- and again, last week we mentioned we should talk about maximizing your client base.
But, a lot of people talk about maximizing your client base without necessarily giving your ideas and helping you build that client base in the first place. A lot of people do struggle with that when they start from scratch. “How am I going to get going? How am I going to go from a couple of regular clients and my friends, to an actual audience of people that I can market to and reach?”
Joint ventures is a great way to do that, because you’re actually looking for somebody who has already done all that work and has the experience and the knowledge, and knows how to get things in front of that audience. So, you’re getting the benefit of that. It’s like an instant client base. And they’re getting the benefit that they’re adding value to their clients. So, that’s a bit of a win-win.
Pete: Absolutely. To also talk about the JV platform in traditional, real-world, bricks-and-mortar, non-web-based business. It’s probably worth making sure we offer some value to that portion, that significant portion, of the listener base. There’s a term that’s often bantered around, and it may have originally been popularized by Jay Abraham, called ‘host-beneficiary relationships’ [HBRs].
It’s fundamentally a very savvy way of saying a JV in the real world. And, a very common play, or funnily enough, a not so common play but a common implementation for the few who do this sort of HBRs, is reciprocal mailing. You may have a business in a retail athletic space. You might sell running shoes, or something in that space.
You can team up with a podiatrist, or team up with a masseuse and say, “Can you email your client base, or put some marketing in the next time you do your invoices, or at the bottom of your invoices, redesign them to have a coupon code for my running store? Then, everyone who comes into my running store and buys a pair of shoes, I’ll put in a 10% coupon for your massage.”
I was going to say massage parlor, but that might be conceived the wrong way. Your massage, your sports massage services. That is a JV. It’s a cross-promotion to a certain extent. It’s a variation on that sort of joint venture. Trying to get to do a new product is a bit different, and a bit harder in that sort of space. If you’re a service-based business, it’s a little bit easier.
Maybe you’re an accountant. You can team up with someone in the insurance space to write a self-published book, a guide on how to manage your money and your assets and protect them. Then, you can use that as a marketing tool. You’re perceived as a market leader, you’re an author, but you do it together as a joint venture. So, there’s things like that you can do with complementary businesses.
Fundamentally, it’s a bit different in the real world. Unlike selling information products where people can continually consume more and more information, you can’t necessarily team up with another running shoe store, to continue that analogy, because somebody’s only ever going to buy one running shoe. It’s a bit different when you’re selling information. But there’s definitely a lot of other ways you can do joint ventures very creatively with complementary businesses in the real world.
Dom: And like everything that we try and talk about, it’s important to always look for those opportunities. It was a great example, as you say, the providing, creating some book or some other information-based content can be done and can work as a complementary one. But, at the same time, just cross-promotion is one of the simplest forms of joint venture. That can be as simple as, “Can I put my leaflets in your store and you put your leaflets in mine?”
Pete: Yeah. It’s not really carrying on an actual project, but it’s still doing something together to cross-promote. So, it’s a variation of a JV, and it’s absolutely something that a lot of people don’t really think about.
Dom: Yeah. For example, if you have a new service and you want to get the word out about that new service, then yes, you can do some focused and targeted, specific for a period of time-type cross-promotional work with complementary service providers. But, there’s lots of opportunity.
It just, to me, partnerships as we talked about, is usually about complementary skills to create a business. Whereas, joint ventures is more about the complementary parts of a whole for a product in the main. So, if you’ve got the information, the idea for a product, and somebody else has got an audience- the most classic of a joint venture. But, there’s lots of other opportunities to use those two things in any business.
Pete: Absolutely right.
Dom: Cool. Well, we’re doing OK for time. Just in case you need to rest your voice, I’m going to call it there. I think we’ve covered that one. Action point?
Pete: I would just try and find someone you can do some sort of cross-promotion with in the next two weeks, whether it be going together with a partner, doing a full project together, or at least getting some sort of cross-promotion in place to start with. It’s a very easy stepping-stone to build up that relationship. And then that could grow into a range of different partnerships, joint ventures, and mutually beneficial arrangements.
Dom: Yeah. Just look for one of the opportunities that we talked about, and just see if there’s a way to grow your audience, or make a few more sales, or whatever it might be.
Dom: OK. So, as always, I will remind everybody; we talk every week about our framework that we like to coach people through, which is the 7 Levers of Business. We have created a self-study, home study course for that which goes into a lot more depth than we do on the podcast, with lots of ideas about how you can improve your operational level on the seven significant parts of any business. Not just online, but any business.
And, the whole idea behind that is if you can just make that 10% improvement in the efficiency of those seven parts of your business, then just by simple maths, you can actually double the profit of your business. We talk about that in more detail over at 7Levers.com. And also, included in that, if you take on the home study course, we’ll also give you access to our Preneur Platinum community where Pete and I will be there to answer your questions directly about anything and everything to do with 7 Levers, Preneur Hierarchy.
Anything to do with the way that we run our businesses, or if we can give you specific advice on how to implement the things we talk about in your business. So, pop over to 7Levers.com, check that out. Meanwhile, thanks for joining us on this show. Looking forward to seeing you all next week. If you have any comments, pop over to PreneurMedia.tv where all the shows are archived with show notes, all the links to things that we talk about on the show, plus a transcript of all the shows is available there if you prefer to read what we talk about on the show.
And, you can leave us a comment there, or you can always just go to iTunes and leave us a comment there. We look forward to hearing you, as we always do. And, we do read all the comments. If you email us as well at email@example.com, we read those emails and we respond to them. So, you’re welcome to contact us in any of those ways.
If there’s something that you want us to talk about on the show, drop us a line. We love to take input from the Preneur Community, wherever it is. Whether it’s people in our Platinum group, or whether it’s just people who listen to the show. We love to provide value, do we not, Mr. Peter?
Pete: Absolutely. We love to do that. So, we’ll continue doing that in next week’s show.
Dom: See you next week, folks.
Trust me, I’m Lying – Ryan Holiday
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