Friday, 1 April 2011

Let's be partners!

Most people offering a valuable service are, from time to time, offered wonderful partnerships that benefit everyone. A win-win, as they say.

For example, a prospective author comes along with a book proposal and says that it will make us rich beyond our wildest dreams because it's a guaranteed bestseller - as in our previous blog post.

They offer a partnership - they provide the book, we provide the publishing. A win-win.

Even better than that, if we do all the work for them, they'll share the profits with us. As we say in England, "You can't fall off!"

Consider this analogy. You approach a big media agency such as AdMedia and say, "I've got this fantastic product. A guaranteed winner. It will make millions. Everyone will buy one. I'll tell you what, we'll work together. You run the adverts and I'll share the profits with you. You can't lose".

In this situation, you'd think that you're portraying supreme confidence in your product because you're certain it will sell in big numbers.

Actually, what you're communicating is zero confidence.

So, AdMedia say, "OK great, we'll take 20% of your turnover on the product and any products you then sell as a result of the first product".

The advert is such a success that your turnover is £1,000,000. AdMedia get £200,000. You kick yourself that if you'd paid for the adverts, you'd have given AdMedia a fraction of that amount. On top of that, when you take out your costs, you discover that they made more out of it than you did.

But all of this is conjecture. You're probably wondering why offering a partnership is a sign of zero confidence in your product. It's because if you really believed in it, you wouldn't give it away.

No serious business would ever consider such a one sided joint venture.

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