The worst business collaboration offer ever (and how you can avoid something similar)
It’s Valentines Day as I publish this blog and it got me thinking about how business relationships are similar to romantic relationships. Some are good, others are wonderful and then some are horrendous but provide valuable lessons.
Let me tell you about the time I was offered the world’s worst collaboration……
It was 4 years ago. I had JUST launched my business (then called the Remote Expert) and the shining jewel in the crown of my new business was templates. Specifically remote work templates in a time when the world was very much not remote work focused. So out I went an experienced commercial lawyer, but a very green entrepreneur.
Need a collaboration or NDA? Check out these legal templates:
One day I was contacted by a random guy on LinkedIn (never an auspicious start). Rather than spamming me with the latest leadership course as many random LinkedIn guys do, he said he and his business partner had a website where they sold templates to a certain occupation. I hadn’t heard of their business, but it did check out when I found the site and looked into it.
I spoke to the business partner after an initial chat with the random LinkedIn guy. The business partner reminded me of my high school maths teacher (NOT a compliment). He made it sound like they would be doing me a favour by putting my templates on their site.
Then, after our call, I received an email. Random LinkedIn guy and his business partner offered to host my templates on their site. Hooray! Surely this was the start of my own passive income journey. For a brief moment, I felt like Muriel in Muriel’s Wedding when she finds someone to marry her (and give her $10,000)….
Then I read on, and on…. until I read what I assumed must be a typo. They would host my templates, take 90% of the proceeds and generously give me 10% as the owner of the intellectual property in the templates and the person who had studied for 6 years and worked as a lawyer for 19 years to have the knowledge to create them.
Surely this must be a mistake, they meant I get 90% and they take 10% right?!
Wrong! They really did want 90% to do me the ‘favour’ of hosting my templates. I ignored the email, knowing as much as I wanted a collaboration like that it wasn’t a win for me. I had my own site and could sell direct for 100% of the profits. Sure, I didn’t have a readymade list of this specific profession, BUT I wasn’t sure how prolific these guys were anyway.
I wrote back and said I would only consider it for 80%/ 20% in my favour. I heard nothing ever again. Life has gone on. I have added many more templates, host them from our Ready to Boss Legal platform, and have successful collaborations where people do sell them as part of their packs, etc.
Would I ever consider hosting them on another site? Yes, I definitely would. However, it would need to be between 70% to 80% of the profits to me in such an arrangement and I would issue a really tight licensing agreement. I now know this is the market rate for such arrangements, something I just guessed wasn’t right 4 years ago.
What does this tell us about collaborations with other business partners?
Collaborations with other business partners should be win/win. If you both aren’t winning, then it isn’t a true collaboration.
This means you have to think with your heart, your head, your confidence and your bank balance and I suggest you ask the following questions when presented with a potential business partnership or collaboration:
1. Think with your heart and ask:
Is the potential business partner or collaborator aligned to your business?
Would you be proud to be associated with the other business?
2. Think with your head and ask:
What do I get from the deal?
Is it really worth my time?
Who owns the intellectual property we bring in?
Who owns the intellectual property we create together?
What happens if things go wrong and my business collaborator doesn’t do what they promised?
If I leave who will get the work we created together and will we get paid for it?
3. Think with your confidence and ask:
Am I really getting what I am worth?
Or am I underselling myself?
Does this bring me joy and profit or am I only doing it out of fear?
4. Think with your bank balance and ask:
What if I took the money and time I would invest in this and invest in something just for my business?
Will it make me enough money or bring in enough leads and new work to make it worthwhile taking time out from my business?
Get it in writing
If you ask yourself the questions above and the potential collaboration is a big yes, then you need to make sure you document it in writing, including who owns any jointly created intellectual property (IP) and how things will end/ who gets paid and when they get paid etc. I suggest you do this using a collaboration agreement. If you need one, we have done all the hard work of structuring it for you to add your details, you can get it here from our template shop.
If you were thinking this is a different type of article from Emma…..
You may have noticed this blog is a little different from our usual Ready to Boss Legal twice monthly informational blogs in that it is about business confidence and my personal experiences as a business owner.
Moving forward into 2023 I will be blogging about business confidence at least once a month and the informational articles will move to one per month. The reasons for this are that we have a great bank of informational articles on the website now AND the number one commonality I see with all my clients and the online audience I have is that confidence and imposter syndrome are the things that hold us back from making decisions to say no to a collaboration or just going for it. It is my hope these business confidence tips will be helpful to you all.
So, if there is a topic you would love me to touch on from a business confidence perspective, get in touch here to let me know about it.
PS. If you would like to know more about collaboration agreements you can read our article, Collaboration and Partnership in business: 7 things to do to avoid a messy ending here.