Creating Real Partnerships and Joint Ventures

Confidential Underground
Secret Society Report #3:
“Creating Real
Partnerships and
Joint Ventures”
By Yanik Silver

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Clandestine Underground Idea #3:
Creating Real Partnerships and “JVs”
I admit I’m guilty of this on occasion. I throw out the word “JV” (aka Joint Venture)
when I really mean endorse my stuff. You’ll hear “JV” tossed around and bantered about
– but that’s not what it is. In my opinion, a true joint venture is a partnership when 2 or
more parties come together to create something that’s better & bigger than what they
could do on their own.
In the next few pages I’m going to give you the run down on profiting and setting up joint
ventures. For me, I’d group joint ventures into 3 broad categories:
1. Promotion/endorsement with special offers
2. Services
3. Joint business
Let’s cover each of these with real-life examples…
Promotion/endorsement with special offers -
This is the lowest on the totem pole of joint ventures in terms of involvement. And it’s
really the closest to what others call a “JV” in terms of endorsing products but its
different. Instead of just endorsing a product you work out a special deal for your
customers in which they will get something special that nobody else will. This is the
important difference.
For example with Jeff Walker’s “Product Launch Formula” – I asked Jeff give my
customers a free email critique and evaluation of their launch strategy. It was something
unique that Jeff was only doing for my list. Another example is Andrew Fox’s
“Millionaire Mega Yacht” DVDs – Andrew gave my customers a chance to win a free
trip to next year’s yacht trip he was doing.
The ideal situation is to have the other person do something they don’t do for everyone
else. Then not only do you look good in the eyes of your subscribers & customers but you
really do deliver something unique they can’t get anywhere else.
Now this type of joint venture can be formulated in 5 minutes – the other two can’t and
that’s what I want to really focus on…
Services –
Think of all the money producing tasks that you don’t have time to do or you don’t have
the affinity for. Here’s a quick list off the top of my head…

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* AdWords/PPC * Direct Mail * Product Launches * Buying Advertising * Testing
* Telemarketing * Affiliate Management & Recruitment * Product Creation *
Search Engine Optimization * Publicity * Copywriting * Coaching, etc…
Each of these and more can become a joint venture of sorts with trusted individuals who
will help you make more than you could make on your own. In fact, that’s one of the
criteria for a good joint venture. A service is a task that can be paid for out of additional
profits and measured that way. I like that.
For example, I know one information marketer who joint ventured with a telemarketer to
run a phone room. He pays them a large percentage per sale for the events and high-end
products they sell and that’s it. This venture brings in millions and millions of dollars of
additional revenue but he doesn’t have the headache of babysitting and training a bunch
of telemarketers. Or if I joint venture with a partner to do search engine optimization for
my sites it’s a pretty clean relationship because I can simply give them their own affiliate
id# and let them have at it.
Personally I’ve worked with several partners on these service joint ventures. The first one
is with a friend of mine, Rob Olic, to help me run all my direct mailings.
Side note: I’ve harped on this before. If you are only using email and online marketing
you are missing serious revenues and not maximizing your profit.
Now I realize that – however at the same time I didn’t feel like tweaking copy, handling
my mailing list, coordinating with vendors, etc. If I had employees this would be a
function of one of them – but since I don’t want employees at the moment I’ve gone to
partnerships.
So Rob does all those duties to make sure the piece gets in the mail. He’s also a good
copywriter so he’s written the teasers on envelopes, lift-notes, etc. The little things
needed to get a good direct mail piece out. Now I pay Rob based on results. I think that’s
the best way because we are both in it together. If I do well – he does well.
I pay him a percentage of profits – which is figured by gross sales from the promotion
less mailing costs (postage/printing/graphics), credit card fees and cost of goods. Rob
also has a sliding scale of percentage depending on the total volume of sales generated
via direct mail. Now if the direct mail is a postcard that drives people online – I just give
him an affiliate id# to track the sales.
Now I have to admit I’ve been slacking lately on the direct mail because I’m not doing
what I originally did when Rob and I first set up this agreement. We used to talk for
about a ½ hour each Monday to go over our mailing schedule and we had mailings
planned out 3 months ahead. I need to get back to doing that. But use that as a lesson – if
you want to partner up with someone for an ongoing service just set up a regular meeting
with them to get things done.

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Product Launch Partnership -
The other experience with partnering up on a service was for the Underground DVD
launch. I recruited one of my former Apprentices, Chris Zavadowski, to help coordinate
and run the promotion launch. Chris was someone I knew who got things done from
working one-on-one with him. I approached him and offered a percentage of gross sales
from the launch for taking care of activities like running my blog, posting to my blog,
helping with messages on the blog, getting the video clips edited & online, coordinating
with affiliate partners (we had individual pages/links for each partner), working with my
tech guy, etc. Basically all the details and things I didn’t want to do. Chris was happy
because he got a chance to work with me and learn some new things and I was happy
because I was off running with the bulls in Spain one week before the launch and things
were running without me.
Now one of the secrets was I wasn’t greedy. I gave Chris a very fair percentage of the
sales. I don’t want to reveal the specific percentage but put it this way – it was enough to
buy him a new car.
The other key aspect of working with a partner on a service is to be specific in their
duties and how they are going to be paid. You don’t want people upset because of a
misunderstanding later on. Chris knew he was paid on every DVD set sold except those
sold via direct mail because Rob was paid on that.
The other thing a good joint venture service partner brings is their own ideas and
initiatives. Chris helped me come up with the idea behind the “real-time inventory
countdown script” – and he spearheaded developing the whole thing on rent-a-coder.com.
Here’s a screenshot of it in action (look in the right-hand corner) -

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This counter script checks the real-time inventory and updates the page automatically
every 30 seconds. It’s a damn cool script and you’ll get a copy in this month’s bonus CD-
rom.
Now on occasion I’m on the other side of a service joint venture relationship. That’s what
happened last year when I agreed to run Dan Kennedy’s newsletter affiliate program. I
got paid a percentage over-ride on every newsletter subscription brought in online and via
their affiliate program because I helped structure it, recruit new affiliates and promote it.
Joint Businesses –
Going into a joint business with someone is probably the closest thing to getting married.
This is the top of the totem pole of joint ventures for responsibilities and “stuck-
togetherness”. Like it or not – you are glued together.

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Going into business together or doing a jointly collaborated project should be done out of
strengths not out of weakness. I see a lot of people making a mistake of bringing in a
partner just because they are scared to go at it alone or think having another person to be
in business with will lighten the load. In most cases that’s a BAD idea.
I’m looking for someone who will compliment my strengths and augment my weakness
or at least bring something to the table that I cannot. Let me give you a couple real-word
examples and you’ll see what I mean…
Jim Edwards –
One of my very first partnership deals was with Jim Edwards. He and I met in Boulder,
CO at one of Jonathan Mizel’s seminars back in 2000 or 2001. Jim and I had kept in
touch and emailed back and forth but that’s about it. Then the day he was fired from his
real job – he called me up and I very distinctly remember the conversation. We were
kicking around some options for him and then we started brainstorming an idea of a real-
world, step-by-step, day-by-day instruction guide for getting up and going online. I
grabbed a Bourbon & Ginger and he grabbed a beer and we literally outlined the whole
product right then and there on the phone. That was the birth of our semi-famous “33
Days to Online Profits” course.
This wasn’t a deliberate or thought-out joint venture it just sorta happened. But the nice
thing was how each of could divide the work and material of the project based on our
strengths. This was my first glimpse into successful joint venture businesses and projects
because the two of us accomplished more together than we could have alone. Jim’s a
great partner and we’ve done 5 other projects together.
We developed some guidelines throughout the years together that I’ve followed with
other partnerships.
The list we built was jointly owned and we both had veto power over a promotion. If we
were sending out a promotion for my product we’d use an affiliate link for Jim. If we
send out a promotion for one of Jim’s other products to the list we use my affiliate link.
We had to clear any mailings with the other partner for endorsements, articles, etc. so
there weren’t any surprises or hard feelings. Also, we were able to keep candid lines of
communication open to change the deal slightly. For instance, as customer service
became more of an issue we took a small percentage out of the sales that was paid to my
company that handled it all.
Public Domain Goldmine –
One of my recent joint venture projects that really turned into a big success is the Public
Domain Goldmine product. It’s a CD-rom product with 35 different public domain works
in 35 different niches. It also includes spreadsheets of keyword research, market analysis,
competitors, back-end products to sell, possible joint venture partners and more. Each

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work has had their copyright cleared by an attorney and been scanned in for you.
Everything is all done for the end-user and practically handed to you on a silver platter.
As of this moment we’ve sold out the previous 6 volumes in only days and we’re heading
to another sell-out of Volume 7 shortly but there may be a copy left depending on when
you get this - PublicDomainGoldmine.com.
Back in December 2003 I had the idea for creating a product that was something ready-
to-go for people interested in using public domain. The project required a lot of research
to find the public domain books and also expertise in niche markets. I could do it all
myself or possibly even hire a researcher but I didn’t want to coordinate it all and I
wanted someone who had a significant personal interest in the outcome of their research.
i.e. if I just hired a researcher on a freelance site and paid them by the job they wouldn’t
care if the spreadsheets were crap or not, as long as they got paid. But a true partner
would because it would mean no more repeat customers and money gone from their
pockets.
So I decided to actively solicit a partner. I had met a guy named Michael Holland at Bob
Silber’s seminar in the Florida Keys. He had written an ebook called “Strike It Niche”
with an analysis on different niche markets based on his own real-world results with
certain niches. We only met for about 10 minutes and the Goldmine product wasn’t even
an idea in my head at that point but I had a good gut feeling about Michael. He really
seemed sharp and on top of things. Before I contacted him to partner with me – I checked
him out pretty thoroughly. I asked friends about him and I even purchased his materials
to see if they were any good.
Everything checked out and I called Michael up to propose this deal to him. After going
over everything on the phone we tied up the loose ends by doing a very simple written
agreement outlining duties, responsibilities and what each party is in charge of. Here is a
copy:
JOINT VENTURE AGREEMENT
This Agreement is made effective as of the 2/28/04 given hereunder by and between
Surefire Marketing, Inc and Michael Holland
The parties to this agreement agree to carry on a joint venture for the following purpose:
To jointly create and offer a product called “Public Domain Gold Mine Cd” created by
Surefire Marketing, Inc and Michael Holland.
1. The term of this Agreement shall be one year from the effective date, and shall
automatically renew each successive year thereafter on the anniversary date of this
Agreement unless either party. Either party may cancel agreement within 30 days of
the end of each license year by giving the other party 30 days notice in writing.
Absent such notice, agreement will continue year to year.

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2. Each party will contribute the following cash, services, or property:
Name
Cash/services/property
Michael Holland
research, development of topics, analyzing
of works to be included, coordination of
product, promotional activities and customer
and opt-in list
Surefire Marketing, Inc.
Marketing expertise, customer and opt-in
list, copywriting services and product
development
3. Day-to-day operations and technical/customer support will be handled by Surefire
Marketing, Inc
4. Surefire Marketing Inc. will handle all accounting, and provide a monthly summary
of Sales & Profits for this product.
5. For each “Public Domain Gold Mine” CD-rom sold individually or as a package,
Michael Holland will be paid 50% less agreed upon costs (product, fulfillment, credit
card fees, affiliate commission, etc). Payments will be made by the 20th of the month
for the prior month’s sales. No commissions will be paid on declined accounts.
6. Back-end affiliate commissions for products/services recommended or featured in the
product will split 50/50 and separate affiliate id#s will be set-up.
7. Both parties can mutually amend this agreement as common sense dictates.
8. Any disputes between the parties to this agreement which involves interpretations of
the terms of this agreement shall be submitted to arbitration under the rules of the
American Arbitration Association, and the finding of the Arbitrator shall be binding
on all parties.

IN THE WITNESS WHEREOF, Surefire Marketing, Inc. and Michael Holland.
have executed this Agreement to be effective as of the following Effective Date.
Effective Date: February 28, 2004
Michael Holland.
Surefire Marketing, Inc.
Signature: ___________________________ Signature: _________________________
Date: ______________________________ Date: ____________________________

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As you can see this is a pretty simple non-legalese document. Please remember, I am not
an attorney so this is not legal advice but I’ve found if someone wants to break a deal or
they’re going to screw you – it doesn’t matter if you have a 25 page iron-clad contract or
scrap of paper. They’ll still screw you. I like to keep things simple. In fact, in one case I
even have a handshake agreement with one of my partners. Now I don’t recommend that
because memories fail but a nice simple written agreement helps alleviate discrepancies.
Even if you just email your partner the key points to an agreement that’s better than
nothing in writing.
More Patients –
A recent partnership I formed is with another former Apprentice, Larry Brown. Larry and
I discussed taking my old material for cosmetic patients and revamping it into a complete
high-cost, done-it-for-them program. So instead of just selling information we wanted to
do the marketing for the doctors. Now doing the marketing and sending out promotions
for the doctors is a whole lot different than simply selling them a 3-ring binder.
I had a feeling I missed the boat only selling info previously to the doctors (this was my
first info marketing business I started in 1998) but I didn’t want to hassle with all the
administrative aspects of a ‘done-for-them’ info business.
Some of the things we offer doctors are newsletters sent for them, birthday greeting sent
out for them, a real book “written” by them, a gift sent out to patients each month and
more. All of this requires someone to stay on top of it. That’s why the partnership with
Larry is ideal. From Larry’s previous business I knew he had experience with managing
employees, overseeing details, etc.
* * *
Keys to successful joint ventures and partnerships
1) Open Communication: This is one of the big keys. Sometimes resentments will
creep up because one partner believes they are doing more work than the other. If
you value the relationship more than the money – then you need to realistically
assess and possibly recalculate percentages or job duties.
2) Swing of responsibilities: I noticed this frequently with my longest partnership
with Jim. No partnership is going to be 50/50 forever. We figured it was about
55/45 or 60/40 in either direction at different times. So perhaps I’d be busy with
something else and Jim would have to do a little bit more copywriting than usual
(since that’s typically my duty). Or vice versa and I might do something else that
Jim might normally do. If you don’t watch this and try to keep it even –
resentment will kick in and the partnership will die on the vine. The partner who
believes they are doing more than their share will simply stop doing anything else
to keep the business going and the profits will slow down to a tiny trickle. I won’t
name names but I’ve seen this where one partner did not want to mail a promo

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because that meant their other partner would get paid and he was pissed because
that partner was doing nothing.
3) Get it in writing: Even if you are best friends with your joint venture partner –
it’s always best to get in writing (especially if you want to remain a friend). I
already mentioned this but it’s worth noting again…. memories fail but a nice
simple written agreement helps alleviate discrepancies. Even if you just email
your partner the key points to an agreement that’s better than nothing in writing.
4) Administrative functions: Being the person who has handled the customer
support and email on a lot of joint prospects you shouldn’t underestimate this
task. My latest thinking is that a specific % be allocated from gross sales to handle
this task. It makes it easy that way. And if you want to totally outsource it I’d
recommend getting a virtual assistant to handle the customer support. We use
Workaholics4Hire.com and they man our help desk.
5) Keeping GREED in check: This is a biggie. Once you strike a deal and it’s a fair
deal you need to be emotionally prepared to write out big checks to your partners
(if you’re the one handling the money). I’ve written out monthly royalty checks
that most people with real jobs would be jumping for joy to receive in salary for
the entire year. You have to remember that this money wouldn’t have been
possible without your partner and keep reminding yourself a deal is a deal.
(Obviously if the deal is really lopsided you should renegotiate and that’s why I
put wording in my agreements about how it can be amended as common sense
dictates.)
Be careful about letting resentment creep in just because you are paying your
partner large amounts of money. You might be tempted to rationalize and skim
off a tiny percentage here or there. Or not pay them on orders that wouldn’t be
trackable, etc. Whatever the case is – it’s a bad idea because it affects your own
self esteem and integrity. It’s possible to rationalize almost any behavior but my
best advice is don’t do it no matter how tempting it is to cut a corner.
Show me the money!
Okay now a big question always asked is “How is the money split?”
50/50 is the typical way and that’s how many of my partnerships are but that’s not the
only way I’ve done it. It really depends. Even if it is 50/50 it isn’t totally 50/50 – let me
explain. In cases where I have more marketing clout than a partner (i.e. bigger list, etc) I
deserve to be compensated for that. In many cases the easiest way to make it fairer is to
let each person promote a product using their own affiliate id#. So my customers get a
promotion with my affiliate id# on it and my partner promotes to his list with his affiliate
id#. Then we are each paid our affiliate commissions and that’s taken out before the
50/50 split. That’s one way.

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