Beware the "partnership"

New Smiley for the sMirC-series. beware!

"I want to make you my partner"


When someone says this to you, you should think of the phrase:
"Beware the ides of March."

From my experience this means:

"I have an idea, I want you to do all the work to build it. Once you have done all the work, I am going to get back involved and make a lot of money off all the work you did."

Don't get me wrong. If you and a friend come up with an idea, and you are the "technology" person. They are the "business" person, then becoming partners make sense.

But both of you are in the same boat.

If you are considering a side project, and the "idea" person likes what you say about the technical details about how to implement their business idea, you just got a customer.

Think about that term. Customer. If you are a customer, do you tell the service provider that they should be your partner?

No, they perform a service for you, then you pay them.

Technology side projects are no different.

What about the scenario when there is limited capital to go around?
This is a Catch-22 situation

The idea person needs something implemented, in order to get to the point where capital is available.

The technology person needs resources (compute resources, vendor resources, etc..).

However, if this is your first experience in consulting, here is the trick. If you have ever heard the phrase: "Make a business case for that purchase"? Now is your opportunity to apply your technical knowledge to a business scenario.

Here are a couple hypothetical exchanges.

Idea Person: "We need to be able to market my widgets to a broad range of customers."
Tech Person: "We can use X or Y to do that. X costs $200/month Y costs $300/month, and my time to manage either of them is $50/hour."
Idea Person: "Why do I pay $50/hour?"
Tech Person: "So you don't have to deal with either X or Y, you can focus on your value add widget."
Idea Person: "I want to make you my partner. Then we can both benefit."
Tech Person: "OK, for a partnership my rate is $25/hr, and we still need to pay for either X or Y."

Idea Person: "If we can put together this widget, then we can solve a key problem in this space."
Tech Person: "We can use this tool that costs $200/kit to make some prototypes. My rate to build it is $50/hr."
Idea Person: "Why do I have to pay you $50/hr?"
Tech Person: "Because you didn't even know that tool was available, much less how to use it to build your idea."
Idea Person: "I want to make you my partner. Then we can both benefit."
Tech Person: "OK, for a partnership my rate is $25/hr, and we still need to pay for those kits."

There are risks involved in doing side projects.

Whatever you choose to do, make sure you have an agreement written down with clear expectations from the onset.

While the costs of many things have come down with tools like the cloud, or even open source tools. It still takes expertise to use these tools, and seldom are the tools themselves completely free (as in beer).

Be careful working with side projects. Some can be rewarding, and there are some benefits to working with some perhaps new technologies.

However, the down side is they can become a time drain where in order to make any money the goal line keeps getting moved, and you have to jump through more and more hoops in order to meet expectations.

1 comment:

  1. great information,i like this kind of blog information really very nice and more new skills to develop after reading that post.

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