How to create long lasting business partnerships

In the late 90’s a bright, ambitious financial writer managed to strike a deal with a successful publisher.  As part of the deal, this young writer received financial backing, mentorship and a stake in the new fledgling publishing company they created.  In exchange, he would be the driver of the business.  The partners would support him, but even at the start, everyone knew that success or failure rested most firmly on the shoulders of the writer-turned-entrepreneur.

More than a decade later both the partnership and the partners have flourished beyond anyone’s best hope. The partnership has become a 9 figure/year business and the undeniable leader in its industry.   There’s no way the business could have achieved such rare success if the partnership hadn’t been in a position to thrive along the way.

This profitable partnership shares the same qualities of other great partnerships I’ve witnessed, including:

1. Everyone understands ‘the deal’.   “I’m responsible for X, you’re responsible for Y and we’re going to share in the upside and downside 50/50 (or whatever).”

2. Everyone is an honest broker.  There can be no conflicts of interest.

3. There is genuine respect and admiration all around.    You might get into spats from time to time, but the shared interest and mutual respect ultimately win the day.

All this is pretty basic, but here’s the important part….

The business will evolve as will the lives and relationships of the partners.   Ultimately the evolution can make ‘the deal’ unfair for one or more of the partners.   Unfairness sows the seeds of the most destructive force in any relationship… resentment.   Resentment has the ability to take down your business in a way that no competitor or economic threat ever could.

“A deal is a deal” – is Bunk.

Relationships are not about contract enforcement.  They are about making sure that all parties have an environment where they can flourish individually and in pursuit of the shared goals.    As things evolve, “the deal” will need to evolve with it.

We’re not talking about the day to day workload or temporary shifts in contribution to shared goals.  Focusing on that type of ‘fairness’ is petty and deeply counterproductive.  We’re talking long term, fundamental changes that virtually ensure ‘the deal’ would be unfair as far into the future as one could imagine.

If you want a partnership to succeed over the long term, it’s up to you to always be mindful of the fairness for both you and your partners.

How taxes really work:

Got this humorous email today. Enjoy.

Suppose that every day, ten men go out for beer and the bill for all ten comes to $100. If they paid their bill the way we pay our taxes, it would go something like this:

The first four men (the poorest) would pay nothing.
The fifth would pay $1.
The sixth would pay $3.
The seventh would pay $7.
The eighth would pay $12.
The ninth would pay $18.
The tenth man (the richest) would pay $59.

So, that’s what they decided to do.

The ten men drank in the bar every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve. “Since you are all such good customers,” he said, “I’m going to reduce the cost of your daily beer by $20. “Drinks for the ten now cost just $80.

The group still wanted to pay their bill the way we pay our taxes so the first four men were unaffected. They would still drink for free. But what about the other six men – the paying customers? How could they divide the $20 windfall so that everyone would get his ‘fair share?’
They realized that $20 divided by six is $3.33.

But if they subtracted that from everybody’s share, then the fifth man and the sixth man would each end up being paid to drink his beer. So, the bar owner suggested that it would be fair to reduce each man’s bill by roughly the same amount, and he proceeded to work out the amounts each should pay.

And so:

The fifth man, like the first four, now paid nothing (100% savings).
The sixth now paid $2 instead of $3 (33%savings).
The seventh now pay $5 instead of $7 (28%savings).
The eighth now paid $9 instead of $12 (25% savings).
The ninth now paid $14 instead of $18 (22% savings).
The tenth now paid $49 instead of $59 (16% savings).
Each of the six was better off than before.
And the first four continued to drink for free.
But once outside the restaurant, the men began to compare their savings.
“I only got a dollar out of the $20,”declared the sixth man.
He pointed to the tenth man,” but he got $10!”
“Yeah, that’s right,” exclaimed the fifth man. “I only saved a dollar, too. It’s unfair that he got TEN times more than I!”
“That’s true!!” shouted the seventh man. “Why should he get $10 back when I got only two? The wealthy get all the breaks!”
“Wait a minute,” yelled the first four men in unison. “We didn’t get anything at all. The system exploits the poor!”

The nine men surrounded the tenth and beat him up.

The next night the tenth man didn’t show up for drinks, so the nine sat down and had beers without him. But when it came time to pay the bill, they discovered something important. They didn’t have enough money between all of them for even half of the bill!

And that, boys and girls, journalists and college professors, is how our tax system works. The people who pay the highest taxes get the most benefit from a tax reduction.

Tax them too much, attack them for being wealthy, and they just may not show up anymore. In fact, they might start drinking overseas where the atmosphere is somewhat friendlier.

“mom-preneurs”

A recent report authored by the Institute for The Future talked about the growing number of “mom-preneurs”.   If you spend anytime working with entrepreneurs (especially micro-preneurs), this seems self-evident.   Some of the key findings of the report include:

As aging Baby Boomers “unretire” to leverage their lifetime of professional acumen in their own business opportunities, and as their children enter the job market, entrepreneurs will come more from the edges of the age spectrum. The younger generation, which is more adaptable to technology, views entrepreneurship as a way to maintain independence, and it might set the bar as the most entrepreneurial generation ever.

and..

With the glass ceiling blocking the corporate career paths of women, a rich talent pool has been sent to the small business sector. Among them are “mom-preneurs,” or mothers who start part-time, home-based businesses with the help of the Internet.

Download the Report Here

The REAL Digital Divide Part I: The problems small business must solve to profit online

We've heard for years how sad and unfair it is that some people had access to technology and others didn't. Granted, the more people that have ready access to information and tools (ie the internet) the better… especially for porn (uhhh hemm "adult oriented") sites which make up about 60% of all internet traffic.

Reflecting on the progress we've made on this "issue" over the last 5-6 years it seems clear that this so-called digital divide is just another speed bump on the information superhighway (lame pun, I know).

The Real Digital Divide has Emerged.

This is a pretty big issue to cover in a single post so I'll come back to it in the coming weeks. But let me set the stage a little…

Fantastic, personalized, attentive service is hard to find these days offline and pretty much non-existent online (I understand I'm making a general assumption. Just stick with me here and I'll build the case for why this is true).

"So what?", some would say. "Consumers are spending buckets of money offline and online So what does it matter? Do consumers really care about fantastic, personalized, and attentive service?"

It'll take a HUGE paradigm shift for Americans to stop consuming. At the moment of consumption it does seem like the solution to dukkha doesn't it?. The misguided consumption of Americans aside, I think consumers do care but their expectations have changed. When you think of the virtues of a good "transactional experience" offline what do you think of?

  • Low Prices (I hate to put it first, but have you been to walmart? I hate that place. I'll share my top ten reasons never to go to walmart with you in another post. It just might save your life)
  • Selection (Personally, I'll only use one particular type of toilet paper and I'll go out of my way to get it)
  • Wide aisles & pleasant lighting (for our ever widening bodies)
  • Store Location
  • Payment options
  • Quality shopping process (easy to get into the store find what you want, make a purchase decision and then buy.)
  • Customer Service (efficient, friendly, knowledgeable)

These are virtues of stores many of the big chain stores I go to and buy/eat way too much. But, I do spend a lot of time going to way less 'convenient' places with many fewer options and choosing to spend my hard earned buck there. The reason is simple, they care. I mean they really give a shit if you like Mamma's Phad Thai. They're generally small businesses. I frequently know or have the opportunity to interact with the owner (or their family). There's big potential for developing a satisfying relationship with them. They bust their butt. They want to make you happy. At they end of the day they know their success or failure is dependent on delivering a great product to you, their customer.

Other offline "transactional experience" virtues consumers often seek out:

  • Relationships & Higher level human interaction
  • Hustle (how many people hustle anymore? Some do and I love 'em for it)
  • Familiarity
  • Personalized service ("the usual?" Yep! JWB on the rocks…thanks)
  • Going the extra mile
  • Problem solving rather then just saying, "we don't do it that way, you'll have to…"

This is where the little guy can (and does) still whoop on the big boys. This is going to sound retarded, but in every "transactional experience" there's items exchanged. Some companies/people are really good at making sure when you give them money they provide you with the promised product/service and a little something extra that makes all the difference… a little love. (aka "giving a shit"/hard work/hustle/personalization/trying harder)

If we assume that the above is all generally true and that small businesses' big advantage is the little bit of "love" they sell along with their products and services how does this translate to the online medium?

In part 2 I'll answer this question and also discuss:

  • Why the LOW expectation of consumers can be a huge win for business that can recognize the opportunity.
  • How the big boys are are already treading all over small business' turf and will win for good, if small businesses don't act soon.
  • Plus, I'll finally define what exactly the NEW Digital Divide is and how it will either kill you or make you stronger.


Sounds good, but how the hell do you DO “Buzz Marketing”?

I have been marketing online since 1998. I’ve used every “traditional” online marketing strategy including SEO, SEM, email marketing, banners, pops, contextual, affiliate marketing, etc. etc. But the big “Buzz” words are “Buzz Marketing” and (even though I remember hearing about this in 1999) “Viral Marketing”. These things aren’t new at all. A combination of PR and word of mouth advertising supercharged because of the internet.

In theory these things sound really great, but how do you actually implement a “Buzz Marketing” campaign? I have some ideas on this, but they really are just guesses. I’d love to hear from some people who are in the “know” about creating buzz. I’d appreciate any feedback and I’ll share my knowledge on this blog as I experiment.

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where are my sunglasses?

There's no doubt in my mind that the more you DO the more you are able to SEE.  I suppose this is the essence of wisdom.  With experience one gains perspective and sees connections between seemingly unrelated elements.   Sounds like a good thing, huh?

Well, yes and no. 

I don't claim to be wise only that I am more wise than I once was.   Over time, slowly, and not through paradigm shifts but through organic thinking I've come to  see things I couldn't imagine seening before.  I see connections.  I see countless clear and obvious opportunities.  So many, in fact, that it's starting to become limiting.   

There's a flood of powerful ideas begging to be acted upon and demanding my all to limited resources.  It's actually disorienting like coming out of a movie theatre into the mid day summer sunshine.  BAM!  "Where the hell are my sunglasses!"

This is where real wisdom comes into play… the ability to be aware of everything but choose to devote attention and resources only to the highest payoff opportunities.  Leverage your greater awareness…use it, nurture it,  but don't become overly enchanted by it.   Make a decision which direction you want to go, put on your sunglasses and get to work.