Evolution Pt. II: The Power of Joint Ventures
"As man advances in civilization, and small tribes are united into larger communities, the simplest reason would tell each individual that he ought to extend his social instincts and sympathies to all the members of the same nation, though personally unkonwn to him. This point being once reached, there is only an artificial barrier to prevent his sympathies extending to the men of all nations and races." - Charles Darwin
There you have it. The man who made the notion of "survival of the fittest" and "natural selection" popular talking about the win-win, albeit in semi-convoluted prose.
In fact, I'd argue that the only reason man has evolved is because there have been more win-wins than win-loses. Makes sense, right? Well, the exact same principle applies to your business.
Perhaps no strategy can double your business faster than the win-win strategic alliance. Strategic alliances, more commonly referred to as joint ventures (JVs), are often the most overlooked growth strategy in business.
Why? Perhaps it's because we're taught that a competitive world produces more results than a cooperative one. Frankly, I'm not here to wax philosophic, and I don't really want to.
Here's the bottom line: if you're not doing JVs in your business, you're not making it as profitable as it could be.
JVs have several advantages:
1) Faster time to market
2) Lower customer acquisition costs
3) High leverage
4) Shorter sales cycles
5) Expanded social network
6) Long-term partnership building
I could go on and on, but the fact is, JVs are not very hard and build your business like clockwork (trust me, I've consulted on numerous JVs, used them myself, and wrote some white papers on 'em).
Here's the step-by-step process to creating powerful JVs:
Step 1: Identify complementary business in or adjacent to your market niche. These can even be indirect competitors.
Step 2: Think of some ideas that would create one or both of the following for you and your competitor: (a) increased revenue and (b) new customers or leads.
Step 3: Contact your partner. First ask what he wants. Always ask first. Then tailor your suggestion based on his comments.
**Keep this in mind: The more value you create for your partner, the more value you will receive in return. The more attractive you make the deal for your partner, the more leverage you'll have when it comes time to negotiate. If you're leveraging off of your partner, volunteer to do all the work--make it completely risk and work-free.**
Step 4: Start with trust, but make sure you don't get screwed.
Step 5: Do the deal and focus on the long-term relationship and value creation. Learn everything you can from your partner and continue providing value to keep the relationship alive.
For example, let's say I have an e-commerce company. I know my customers need a reliable credit-card processing service. So I find a company with a sizeable client base. We work out a deal where they become our recommended credit card processing company, and they recommend us as their preferred e-commerce system.
I could go on about JVs for hours (I have before with other companies). But here's the key: Just do them. Find a partner, call them up, and get a deal going. Your first one could fail--but once you get the hang of it, I'm willing to bet JVs will top the list of your preferred growth strategies.