Corporate America hierarchy vs. unlimited Joint Venture Dealmaking
Are you in control of your lifestyle and income potential?
Let me tell you a quick story about one of my first Joint Venture deals
One of my first, profitable joint venture type deals I did was back in May of 1993. Yet, at the time, I really didn’t even know what a Joint Venture Partnership deal was.
Flashback to 1992, I was 23 and working in Corporate America with little more than a vision of what I wanted to do with my career beyond my current technical support position. I was only there about 2 years, but I knew there was a better way. I could no longer work in a corporate setting due to all the limitations, narrow thinking, and corporate politics.
I felt like a caged animal dying to run and be free to create my own path. I wanted to create a working career and environment that I could control my own destiny, how much money I made, and set my own hours. I was tiered of my middle level manager dictating how many hours a day I had to be sitting in a chair and that my ideas for making possibly beneficial changes to the department would have to go through the “review board”. I’d clearly had enough of operating in an environment of maybe using 2% of my potential. Can you relate?
I had gotten my first computer when I was 12 so I had a propensity towards being online through bulletin board systems (BBS) with my 300 baud modem. The commercial Internet was just starting to evolve. At the time there were only 64 sites on the net and Yahoo just launched this crazy site, coined a “search engine”.
I knew I wanted to get out of my Corporate America job and get into the Internet Service Provider (ISP) business, but I didn’t want another limiting 9 to 5 job.
I had to come up with a way to get leverage on my current skill set (Computers and a fascination for marketing and what made some companies successful while other failed). If I was going to break away from Corporate, I had to offer some type of valuable service that other business owners would want to pay me for.
I had to focus my efforts towards providing value. Knowing that I wanted to work in an environment that had an unlimited potential and I knew I wanted to work in the ISP business, I started thinking about how I could make a profitable contribution to a local ISP business in my city.
I signed up for their Internet access services and quickly starting asking questions. (In retrospect, this questioning process became a very important tactic to creating trusting and profitable relationships). I got to be pretty friendly with the owner of the company (his name was Jerry) since I was calling tech support so much and asking questions about how their service worked.
We started talking about his business and what he needed most to be more successful. He told me he needed more clients since he and his dad started the company without any real sales or marketing experience. Coincidentally, I had been reading about marketing and creating leverage in Entrepreneur magazine. Specially, the article was talking about using existing relationships to create new marketing distribution channels.
Even though I had no formal training or experience with Joint Venture Dealmaking at the time, my ambitious ignorance, need for a huge change, and my naivety lead me to take the next step towards creating my ideal working situation. Little did I know at the time, but this one decision enabled me to create the experience and momentum that I needed to create a working lifestyle that I’m still benefiting from today.
So, I told Jerry that I wanted to help get him some new clients. I told him I had a few ideas about building a commission only sales and referral system with other local, non competing, but similarly related products and services.
He was interested since their was little risk for him and he had more to gain than loose in setting up a deal like this. We quickly met (in person, rather than on the phone which was very importing for building trust towards our long term working relationship) for a meeting to discuss a fair commission structure. I asked him for 20% of all the gross sales for the first 6 months that I brought in. He agreed since his upfront marketing costs were zero. I created a very simple, one page contract that outlined our agreement and I went to work on creating a system for bringing in new clients. I figured I could make an extra few thousand a month on the upside and if it didn’t work, Jerry didn’t loose anything since I wasn’t charging him upfront for my services.
For the first 30 days, I called on local business owners who offered likely associated (Technical Repair Services, Graphic Designers, and Advertising Companies ) products and services. The overall reaction was very positive since I had 3 new companies (not individuals) that were now reselling the Internet Access service for me. Keep in mind, there’s a HUGE difference between having 3 new client and having 3 new business reselling the service to their employee’s and to their existing clients. I wound up making an extra $1500 a month in residual income from just setting up these 3 companies. Time invested, maybe 30 hours total. I’ve also applied this type of strategy to generate over $1.5M in profits in 11 months for another company. (I’ll be sharing some of the details of this deal with you in future newsletters)
This is where the leverage comes in. Instead of calling 10 calls to 10 end users, I made 10 calls to business owners who already had the trusting relationship built with the exact type of clients I was looking for.
Is this starting to make sense to you? Can you see how powerful a Joint Venture Deal can be? Instead of thinking in a one to one mind set, think one to many. Meaning, you should be spending your time on money making projects and relationships that allow you to tap into existing influence and trust networks to leverage your time, money and efforts.
Your assignment for this week is to write down 3 to 5 business’s that you could apply this strategy to. Think about what problem you can solve for them? If you can solve their problems, they will gratefully pay you for your help. Don’t worry about “How” your going to do this, just think about “What” you can do to help them succeed in their business.
Next time, we’ll be talking about “Collaborative Intention” and why it’s important to start thinking as “we” instead of as “I”.