Know what hardly anyone talks about in the IM space?  How to decide when to partner, when to joint venture, and when to outsource to a simple vendor.  I think people don’t talk about this much because there are complex factors involved in making each particular decision.  But I’ve got a simple-though-less-than-perfect rule which is enormously helpful:

PARTNER UP, JV SIDEWAYS, OUTSOURCE DOWN

PARTNER UP:  If I’m going to form a corporation, share equity, and “get in bed with” a partner these days, I want them to be a level or two further along than I am.  Perhaps that means they’ve got an extra zero in their income.  Or maybe they know how to manage dozens, or even hundreds of employees (definitely still not my forte’)…

Partners are people you have a LOT to do with on a regular basis.  You’re going to make a lot of sacrifices for them.  You’re going to butt heads on at least a few significant issues… and, for goodness sake, you’re going to share a checkbook!

So if you’re going to partner, try to partner UPWARDS so the other guy is more likely to bring MORE to the table to compensate for the sacrifice.  Plus, you’re going to pick up some of their personality traits, skills, and core competencies as a result…

Or at minimum you’ll see opportunities to use their resources synergistic-ally…

So they might as well be valuable resources and competencies you WANT in your arsenal! Because even if the partnership doesn’t work out the way you want it to, you’ll still have learned a LOT and accumulated skills and resources you can use going forward.  (The Rocket Clicks PPC agency is one such partnership in my own history, for example)

OUTSOURCE DOWN:  I’m going out of order because this one’s easier to explain.  In almost all cases where someone is below your level, it’s cheaper, less complicated, and less aggravating to buy their products, labor, and other resources than to give them a piece of the pie.  

By definition outsourcing “down” means they haven’t accomplished what you have, so they can’t charge what you can.  When you cut them in–especially on a 50/50 basis–you’re elevating the value of their time and resources to an approximately equal value as yours.

In some cases you might actually want to do this… for example if you want the person to have an exceptionally strong incentive to do the bulk of the work with ultra high quality.   Or perhaps even though they might not have achieved at your level, they’re really the only person you would trust to do the job.

Always ask yourself: “Could I just straight out purchase this product or service with the extra hassle and expense of a JV or equity partner?  If the answer is yes and I still want to JV or PARTNER, do I have a strong enough reason?”  (Skip this question at your own risk.  I know I have!)

JOINT VENTURE SIDEWAYS:  There are definitely a million and one exceptions to this so it’s NOT a hard and fast rule, but ideally, successful joint ventures are executed by two parties at approximately the same level.  I think the reason for this is that it takes a sophisticated person to understand and accept an other-than-50/50 joint venture, but that’s often what would be required to make an unequal level joint venture pay off.

I’ll give you an example of how UNEQUAL level JVs can be trouble…

I’ve previously worked with many experts to record their product and bring it to market.  From their perspective, they feel like 50/50 is a very fair deal.  After all, they spent years developing their expertise, and I’ve spent years learning how to market.  This should be a win-win, shouldn’t it?

Except a seasoned marketer knows it’s NOT a fair deal for several reasons:

• The marketing party has to record, edit, transcribe, and package the product.  Then they have to write, edit, and publish a sales-letter, program a shopping cart, handle merchant processing, fulfillment, customer service, finance, and more.  Which is to say nothing of the financial risk of advertising…
• The expert only has to show up prepared to do the recording…

This is why publishing houses, for example, pay authors a pittance for their books unless they’re already super famous.

A more reasonable deal would be an 80/20 split in favor of the marketer/publisher…

Moreover, marketing skills are more valuable than publishing skills.  It’s relatively easy to find another expert… it’s pretty damn hard to find a skilled direct response marketer willing to take on the project.

But… subject matter experts don’t know what we know.  To them, we come across as greedy savages trying to take food out of their children’s mouths.

And because I’m a nice guy and only approach experts I really want to work with, I used to suffer tremendously from offering 50% in these situations.  The problem is, you really box yourself in, because you quickly realize you can’t afford to give the project the time, attention, and money it requires to be successful.  That time, money and attention belongs on a project with a more equitable reward profile.

This is why I’ve recently moved–for the most part–from joint venturing with experts to simply outsourcing to them…

What this looks like is paying a flat fee for their time to help me make the product, and possibly letting them throw a bounce back offer in it so buyers can contact them.   (This also gives me more flexibility to use the product at a discount in upsells and cross sells, include it as a bonus elsewhere, etc. without having to negotiate with a JV partner every time I want to make a change)

But partners at approximately the same level as you have a better understanding of what it takes to make something successful.  They’re less likely to get their feelings hurt and know how to equalize the resources to rewards ratio on both sides.

Take, for example, Yoav Ezer, my JV partner on Joint Venture Fast Track itself.   

Yoav is a sophisticated marketer and former CEO of a seven figure business.  (Which, coincidentally was built on the backbone of one massive JV entirely outside of the Internet Marketing space!)

He knows what it takes to bring a product to market and satisfy the customer.  Yoav understands the value of my list, network, and experience.   And Yoav was willing to compensate with virtually all the work involved in packaging up my (and Terry Dean’s) interviews, tools, and tips into a powerful treatise on EVERGREEN JOINT VENTURES…

Yoav even wrote 80% of the copy with my supervision.

He would tell you otherwise because I’m more “famous” with a following and lots of press logos on all my sites, but I evaluate us as being at approximately the same level.  We’ve both run 7 figure a year businesses, but not yet 8 figure ones.  (I’m planning to get there by 12/31/2016 or die trying!)…

And our JV has gone swimmingly…

For me…

But more importantly for YOU…

Get Joint Venture Fast Track Here.

Anyway, like I said “Partner UP, Joint Venture SIDEWAYS, and Outsource DOWN” isn’t a hard and fast rule.  It’s more like a good INITIAL TEST when you’re considering a deal.  If you’re gonna break it, you should be able to clearly articulate WHY.

Hope that makes sense!

Talk soon,

The Good Dr. Glenn 🙂

Get Joint Venture Fast Track Here.

I’ve got a strange question for you…

WHERE does more money actually come from?

I’m not talking about what whiz-bang scheme you could pursue, which market to chose, or which project to go after…

But what’s the actual ORIGIN of money flowing your way?

NOTE: Before you read further you might want to take a few moments to reflect on this and/or write down your answer.  HINT: Figuring out the real origin should help you earn more money…

Got your answer?  OK!  Here’s my personal insight.  I hope you find it useful:

————–

In the mid 90s I started a (now defunct) association with a friend called “The Association for Money Mind Studies.”    Our goal was to research and educate the public about the link between money and personality.   In the process I read a lot of books and learned a lot of things about what money actually is, where it comes from, and how to get more of it…

What really stuck with me is the fact that money is only an idea which works only because people believe in it.  If you doubt this, consider the fact the U.S. debt is many times larger than all the US currency currently in circulation, and that there’s actually more Monopoly money in print than real money.

The interesting thing about this is that, like other ideas, people get obsessed with money in ways very congruent with their personality.  For example:

• To some money is “MOMMA”: A big fat security blanket which (at least in fantasy) will be there to nurture them no matter what happens…
• To others it’s FREEDOM.  They don’t want to purchase anything in particular, they just don’t want anyone telling them what to do.  (That’s why we have phrases like “F.U. Money”, etc.)…
• To still others it’s POWER.  Money is the ability to wield influence over others.
• And sometimes it’s just ACHIEVEMENT… a way to keep score.  “If I can net a million per year then I’ll finally know I’m a winner!”

What’s really interesting is that it’s impossible to describe your desire for money without reference to RELATIONSHIPS and your place in society…

Money gives you freedom FROM being bossed around…

Or power OVER other people…

Or a sense of achievement IN COMPARISON TO others…

Or the security that they’ll be taken care of EVEN IF MOMMA ABANDONS YOU…

Money is integrally tied up with other people…

And every dime you’re going to make from here on out is going to come from other people too…

MONEY IS ACTUALLY THE STORED UP ENERGY OF OTHER PEOPLE.   If you want more money, connect with more (and more powerful) people.  

Sounds simple, right?  That might sound obvious, but because money has become removed from it’s source in our society (think complex derivatives electronically traded in the billions)… this simple insight gets lost.

Geeks-Like-Us spend weeks, months, and years pushing electrons around the internet hoping they’ll wind up as dollars in our bank accounts…

And we forget that in order to do that, we need those electrons to connect with other PEOPLE.

You can even hear it in the language we marketers use…

• MARKETING SPEAK: I need more qualified traffic.
  HUMAN TRANSLATION: I need more real people who are trying to solve the problem I address to look at what I have to say about how I can help them.
• MARKETING SPEAK: It converts at 1.02%
  HUMAN TRANSLATION:  I can get about one out of a hundred people to believe in me enough to trade some of their stored energy for my solution.

Nobody understands the value of abstraction better than me (you can use symbolic logic, mathematics, and statistical reasoning much more effectively) but when all is said and done, money still comes from other people…

And when you forget that, you’re prone to create a business not only progressively more isolated from your customer, but progressively more isolated from the OTHER PEOPLE who can supercharge your success…

You start believing you should be able to do it as a lone wolf, sitting behind your computer…

Maybe periodically getting together to laugh about how clever your latest traffic or conversion “trick” was…

But living life as a cowboy with no real need for others.

God knows, I’m guilty of indulging this fantasy too…

When I first was recovering from my two million dollar loss (thankfully more than 10 years ago now) I just wanted to crawl up under the sheets with a few boxes of pizza, chocolate, and donuts.  I really didn’t want anything to do with anyone… I was so totally burned out from the constant barrage of creditors, dealing with the 20 employees whom I eventually had to let go, and vendors whom I could no longer get credit with.

But when I trace back my recovery and eventually “Phoenix rising from the ashes”, what I discovered was a CRITICAL role played by joint venture partners.

• I convinced Perry Marshall (a very prominent figure in the internet marketing industry with almost a half million followers) to promote literally EVERY project I ever asked him to—year after year—for almost a decade! This resulted not only in tremendous profit, but enough fame in this lucrative industry to support me for the rest of my life if I so chose…
• My wife and I JV’d with a former executive to sell more than a million dollars of consulting services to a Fortune 500 company we were having trouble cracking ourselves…
• I created, built, and sold a 21 person internet marketing agency with a JV partner who managed ALL the clients and labor so I could focus on sales…
• Another partner pays me a hefty percentage of the VERY high hourly business coaching rates for clients I send him, with virtually NO supervision required on my part…
• Then there’s the guy who provides a unique marketing research service to my clients with very little hand-holding (I retain a healthy percentage of profits there too)…
• And the partner who gifted me twenty percent equity in his new business and paid my wife $10,000/mo in consulting income from the $400,000 he raised in just a few months thereafter…
• I’ve got thousands in ongoing monthly passive income from joint venturing to promote other people’s continuity programs…
• I could go on and on and on…

But here’s the real kicker…

As the PPC advertising space has become progressively more competitive, it requires progressively more resources (capital, time, energy, and labor) to reach profitability in a market.  In the old days I could launch almost any new market based solely on my research systems and conversion expertise.

Those days are unfortunately gone.  If you want to get into a competitive market you still need to rely on the market intelligence and conversion expertise… in fact more than ever.

But the price of advertising is so high and the competition so stiff, that you really do need enough capital to sustain at least several months of initial testing and tweaking…

And where does that come from?

Joint Ventures.

I suppose if I wanted to keep marketing tiny little niches this might not be true.

But when I look back on things, I don’t think it would have been possible for me to compete on the level I am presently in the paid advertising systems if it weren’t for all the joint ventures above.

Which is why Terry Dean and I are releasing “Joint Venture Fast Track” this Friday.  It’s a comprehensive foray into what it takes to create evergreen, lucrative, and stress free joint ventures.  And how to profit from our mistakes along the way!  You can read about it here, but the cart doesn’t open until Friday, so watch your inbox please.

Onwards and Upwards,

The Glenn 🙂

PS – What do you think about the origin of money?  I’m really curious.  (I’d also appreciate you sharing this particular post on Facebook to get a discussion going below)