AFP 6: Getting Down And Dirty On Partnerships

Justin Cooke

January 20, 2012

In Episode 6 we get down and dirty in our discussions of partnerships with regard to internet marketing.  While there are some clear upsides that include sharing workload and shoring up your weaknesses, we also wanted to share with you some real-life examples where we’ve struggled in partnerships with our various businesses.  Our thought is that by sharing some of our challenges you might be able to avoid your own in the future.

The Details of Partnerships

We specifically cover the advantages of partnerships, the challenges they represent, practical Do’s and Don’t when it comes to partners, and alternatives to a traditional partnership situation.

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If you appreciated this episode, please do give us a review… Here’s the link to the podcast on iTunes.  Thanks in advance for your reviews and subscriptions!

Podcast Transcripts (Click Show to View)

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Justin:
Welcome to Episode 6 of the AdSense Flippers Podcast. Hello. My name is Justin. I will be your host today and I’ve also got my co-captain here, my technical guy extraordinaire Joe Magnotti. What’s up buddy?

Joe:
Hey everybody. How are you doing?

Justin:
Anyway, just want to go over briefly what we have in this week’s episode. We’re going to do a little bit of news and updates as we normally do and we’re going to talk about the heart of this week’s episode which is partnerships – the good, the bad and the ugly. Finally, we’re going to go over some ninja marketing tips, tricks and our plans for the future that will help you grow your business. So let’s get right into it, buddy. What’s going on?

Joe:
Well, our Buy Our Sites page is finally working as expected.

Justin:
Yeah, that’s kind of nice, right? We actually had a mistake. We had one of our sites up there for one penny. Someone snatched it up and PayPal-ed us one penny for the purchase of a site.

Joe:
Yeah, and it was like a thousand dollar site. So we had to refund the one penny and say, “Not so fast.”

Justin:
Yeah. At least we were alerted to it then, right? We were like, OK, well, if there are any other mistakes, we can fix that really quickly and we gave our discount for letting us know on our next purchase. So that was cool.

Joe:
Yeah, and I think I’ve added a lot of extra sites now. Like we said, the API is working so the numbers get automatically updated everyday in terms of revenue and page views. So check it out. If you have any suggestions or comments or improvements, other things you would like to see on the Buy Our Sites page, please let us know.

Justin:
Yeah. I don’t really like our sales copy. That’s probably something we would fix but I’m not really a sales copy guy so if you do have any suggestions, please let us know in the comments in the blog. Have you take a look at that and let us know what you think.

Joe:
So we’re getting down to the nitty-gritty with our internship.

Justin:
Yeah, buddy. We got it down to three. We were supposed to pick one this last weekend, man, but the applicants were so good, we’ve been holding off. By the next episode, we absolutely will have picked an intern to be coming out her, so really excited about that. We narrowed it down from 17 to 3 and honestly, any of these three, I think, would do quite well here. Don’t you think?

Joe:
Yeah, I agree. It’s too bad we have to only pick one but we do have to only pick one and I am very excited to get them out here and get them working because I need help.

Justin:
Yeah. We’re talking to some other business owners here in Davao and abroad and telling them, “Look, this is such an amazing deal. You should take a look at it.” So hopefully we can get some more people following this motto and we can really turn this into something. I love the Tropical MBA, the AdSense Flipper intern position and I think this is something we could really expand.

Joe:
Yeah. Dan Andrews, this one is for you. This was genius.

Justin:
Yeah, I love you buddy. Thanks for turning us on to it. All right. So this next one really isn’t related to AdSense Flippers specifically but right now, we’re in the process of setting up a capture center for a US-based company in Davao City.

It’s pretty interesting. So there’s a company in the US. They need an office in the Philippines. They’re looking for cheap labor so they’ve asked us to help set it up for them. So right now, we’re in the process of setting up the office, getting the agents in there, setting up all the services. It’s kind of an interesting process. It’s something, I think, we could do again too for others looking for a capture center so I like this part of the business.

Joe:
Yeah, it’s part of our outsourcing gig, part of our consulting services that we offer and it has been a very successful little project. I’m very happy with it.

Justin:
So the last thing I want to mention is we have a lot of internet type peeps that are moving to Davao City. We will have our intern out here a few weeks. We’ve got a bunch of friends that are running their businesses and now we’ve got some new people that are coming out. They’re coming out here and staying, man. That’s pretty cool.

I mean remember a year and a half ago, I swear it was like me, you and Dan, right? Daniel. So the three of us and now we’ve got probably nine or ten people out here doing similar stuff. So I really hope that continues. We’re trying to get more people out here. More people are wanting to come out and visit. I think that will be great for Davao City. I think it will be great for our businesses together.

Joe:
Yeah. I mean I think Davao is very attractive to online entrepreneurs, right? It’s cheap. It’s very safe. You can get most stuff done here that you need to. The infrastructure is good enough. OK, you’re not going to get 27 meg download but you can get good enough internet to make your online business work.

Justin:
Jesus, 27 meg download, man. I would kill for that. Anyway, we’re setting up kind of a mastermind group. We kind of go to dinner on a regular basis, all of us, kind of hang out and chitchat. We’re looking to kind of formalize that a little bit and set up a dinner where we can discuss business problems.

So with our informal mastermind group that we’re setting up, we will definitely let you guys know how it’s working out and our thoughts on kind of like how that works in general. We’re looking for kind of a process or a structure we can use that we think will be effective. So we will be sure to check back in and let you guys know how that’s working on.

So let’s get right into the heart of this week’s episode.

**** The AdSense Flippers Podcast ****

Justin:
So the heart of this week’s episode is all about partnerships and partnerships how they specifically relate to internet businesses. We get asked this a lot, having a partnership and doing this business. What is it like? Is it good? Do you like it? Do you not like it? And we have to tell you there’s good and bad that comes with it and I think a lot of times, people that are looking at partnerships shouldn’t be in one and we’re going to go over some of the dos and don’ts of partnerships in general. But first we want to talk about some of the benefits that you will receive by being in a partnership.

Joe:
Yeah. I mean I think the first benefit obviously is the one that most – biggest reason why most people go into a partnership is to split the workload. Right, Justin? I mean you’ve got this huge heap of work to do and you find some other talented, like-minded person to help you with all that.

Justin:
Yeah. One of the things with new businesses is a lot of the work is frontloaded. You have to do a lot of the work upfront before you’re going to see any kind of return. So that’s a bit daunting to someone looking to set up their own business and if you have a partner, it just feels better, right? You’re like, “Oh my god, I don’t have to do all this crap by myself. I can focus on this or that. The other person can focus on this or that,” and you can get a lot more done, right?

Joe:
Yeah, and I would say the second thing is probably the second biggest reason why people go into partnerships and that’s splitting costs.

Justin:
Yeah, definitely splitting cost is key. Just like the work is frontloaded, often the cost is frontloaded. So there’s going to be some heavy investment. You’re a lot better off with an internet business but there’s still cost involved and if you’re splitting those costs with a partner, it’s a lot easier to get started.

Joe:
Yeah, even if it’s like an equity partner, somebody that’s just an invisible money partner. I don’t know if that’s the right word but …

Justin:
Yeah, if you have a money partner, it’s a lot easier to test the business’s viability. It won’t cost you as much money so you can get into a business. Try it out. See if it’s going to work and then jump into something else or pivot if you need to right away without spending too much cash.

Joe:
At the same time though, other people’s money. Dan Andrews would love that little saying. Spending someone else’s money may be lower risk for you but you’re going to have to one day own up to the fact hat you’ve spent somebody else’s money without a return.

Justin:
I disagree with that a bit. Overall, I think spending someone else’s money is not necessarily a bad thing. It lets you get into business and build a business quickly without putting your own capital at risk but also that you scale it or get it up to speed a lot faster than you would if you had to wait for your own money. You know what I mean?

Joe:
Yeah. So another great reason you get into partnerships is varied skill sets, right? I mean if you have two partners or more, obviously some of them are going to bring different skill sets to the table. If you are a sales guy and he is a programmer, you probably match up pretty well in terms of skill sets; maybe not in terms of personality but at least in terms of skill set.

Justin:
Yeah, having someone else there to cover the technical aspects that you’re not used to or the marketing aspects that you’re not familiar with is really helpful. So that’s a reason, I think, a lot of people partner and we will get into some of the downsides in a bit but it’s both a reason to partner and a reason not to partner, I think.

The last point I think we would say is a benefit is accountability. Now, one of the problems with starting your own business is sometimes you slack off. Sometimes you’re not as balls to the wall as you should be and having someone there to make you accountable, to check up on you, to make sure you’re doing what you need to be doing is really helpful in a partnership.

Joe:
Yeah, and not only to just check on what you need to be doing but to push you to the next level. I would say it’s another part of accountability that is hard to measure but you see, if the other partner is pushing by doing more work or being more creative or bringing more ideas to the table, you are more likely to try to keep up.

Justin:
Yeah, and say what we like about businesses and bosses and stuff. You know, a boss can be motivating especially if it’s a good boss and a partnership, you should have a good boss. I mean you’re his boss and she’s your boss but you’re bosses together and you hold each other accountable which I think is important.

All right. Now we’ve talked about the benefits of some partnerships. Let’s get into some of the challenges or disadvantages of partnerships that we see on a regular basis. I mean we get asked all the time. Do you think I should partner? And what’s our standard answer, buddy?

Joe:
No.

Justin:
Don’t do it, right? I mean there are so many reasons that partnerships are a bad idea and they’re mostly doomed to failure. So we’re going to cover some of the reasons, some of the problems with partnerships that you may or may not have thought about and it’s a good thing to think about especially if you’re looking for someone to partner with in your business.

Joe:
Yeah. I would say one of the biggest things to remember is that you can add a lot of those benefits we mentioned without adding a partner.

Justin:
Yeah. A lot of times, people think they need a partner to get this or that done. What they really don’t understand is you can hire employees, contractors, limited partners to do some of the stuff that you’re looking to get done.

So let’s talk about the first issue or problem with a partnership – inequality in workload. This is something we’ve definitely struggled with where you have one partner that’s not really pulling their weight, right? And this can cause serious resentment in your business where one partner is not pulling their weight and still getting paid the same amount of money. It’s painful.

Joe:
Absolutely. For me, that was one of the biggest things that hurt me when we had our mortgage business together. We had a third partner who simply basically stopped doing everything and was getting paid an equal amount as we were and so it became a game of who could do less.

Justin:
Yeah. When you start going down that road where like, “Who can do less because we’re all getting paid the same?” that’s a really bad situation for your business. Your business is what suffers and ultimately you suffer from it as well.

Joe:
Yeah, and then outside of that, I mean I think we’ve struggled with this even recently where you will do a little bit more than me and I will do a little bit more than you and we would have to pick each other up and I think that’s part of the normal ebb and flow of a partnership. So that shouldn’t be confused with someone just dwindling down to nothing but it’s still a challenge with partnerships in that it’s not always going to be 50-50.

Justin:
Yeah. I would say probably six months ago, I was a bit frustrated with you and I remember I came to you. I was like, “Look, man what’s going on?” We had a conversation about it multiple times and then finally it started to pick up and I would say probably the last month or so, I realized this, is I have been slacking off. I have been doing less than you overall and you mentioned to me a few times recently like, “Hey, what’s going on? Are you mad at me? Are we like playing that game again?” Right?

Joe:
Yeah.

Justin:
We’ve done it. You were like, “Are you playing that game where you’re like trying to do less?” I’m like, “No, dude. I’m just a little burned. I’m out of it a little bit.”

Joe:
Yeah, and I think we have a good work relationship so it’s easier for us but I can’t imagine if we went through these little ebbs and flows over the last year, if we had the new partners. It might have been the cause of real strain on our relationship.

Justin:
Yeah, it’s easy to laugh about it now but when you’re in the heart of it, it’s really not that funny.

So here’s another reason that it’s difficult to have a partnership. Any profit you have is cut in half or worse, right? Three partners, you’re now getting 33% of what you would have otherwise.

Joe:
Yeah, and when you’re starting up and there’s basically no profit, that means 33% of zero is still zero but when you start turning a little bit of a profit, especially enough from a profit for like one person to live on, even overseas, now it starts to become painfully obvious that maybe I don’t need this partner.

Justin:
Yeah. You’re at that point where you’re like OK, the business is viable. It’s making a bit of profit and you know that on your own it could run. You could make enough money but with a partner, it sucks. Yeah, that’s a tough position to be in. You got to fight through that. That’s a time I think to work even harder if you do have a partnership because you need to get to the level where both of you have that kind of income.

Another problem, I think, is communicating strategies, ideas, visions for your business. That kind of thing becomes more difficult the more partners you have in the business.

Joe:
Yeah, we’re a good example of this because I’m not as articulate as you and sometimes when we have problems or issues, it’s hard for me to say exactly what’s going on and what’s bothering me about it where you might have a little bit more of your debate tactics going on that help you out.

Justin:
Yeah, and we have some autonomy so I can make some decisions without you. You can make some decisions without me but a lot of times, it requires us both talking about it. It’s like a major business direction and we really have to work that out and having two partners, when we disagree on like where the business should go, what we should be focusing on. If you have three partners, four partners, it gets really ugly trying to get everyone on the same page.

Joe:
Yeah, and then never mind if some of the partners are more technically-inclined which usually leads to an introverted personality. I mean if you have those kinds of people as partners in your business, you can expect to have to pull them a little bit, kicking and screaming into communication.

Justin:
Yeah. I mean here’s another problem too is level of risk tolerance. Now you and I know this one quite well. I mean we dealt with this with AdSense Flippers much more recently but basically you have one partner that’s willing to throw it all in there. Let’s reinvest every cent in the business. Let’s cut our salaries down to almost nothing so we can build the hell out of this and the other partner goes, “No, we should take as much cash as we can as possible, not reinvest enough until we have huge profits.” So this balancing act, you’re trying to decide how aggressive you should be and reinvesting your business can be difficult. I mean we fought over this issue.

Joe:
Yeah, definitely. We’ve come to loud arguments over this issue.

Justin:
You were about to say blows, right? There came the blows. We’re not like fighting here. No, no. It’s not that bad.

Joe:
Yeah, it’s not that bad but I’m just more conservative with money and investments and I think that you are not that way. So we have to find a balance between us that works for the both of us and I think that’s one of the things you mentioned about partnerships. It’s a lot about compromise and the more partners you have, the more compromises you’re going to have to make.

Justin:
Yeah, it’s kind of like a marriage in that way. One of the good things, the slight benefits I would say that come from this like risk tolerance issue is that it often forces you to look for alternative answers. It makes you look for compromises that ultimately hopefully will be good for your business. So there is a side benefit that’s good there I think.

Joe:
Yeah, and the other side benefit too is there’s another way of thinking, right? So maybe your idea of taking all profits and everything and reinvesting it as a business ultimately was a bad plan but now, because we had some risk tolerance level that’s a little bit lower, we were able to take some profit out of the business …

Justin:
Yeah, it helps you balance it out a bit. So in this next section, we want to talk about some of the dos and the don’ts when it comes to partnerships.

Joe:
Right. One of the biggest things that you definitely do if you have a partner is have well-defined roles and responsibilities.

Justin:
Yeah. You’re responsible for this. I’m responsible for that and that helps for you guys holding each other accountable and making sure that the work is done and evenly split up.

Joe:
Right, and that could change over time. I mean it’s something you should review on a regular basis but make sure to have it – I would even write it down. Maybe have a little contract between each other kind of thing.

Justin:
Another thing you need to do is be extremely honest with your thoughts or views on the business goals and risk tolerance. So you need to know it yourself. You need to be able to explain and communicate to your partner that here’s where I think our business should be going. Here’s where we need to be at. Here’s what I’m willing to risk in this business and here’s where I want it to be, right? I mean if you’re not able to do that with your partner very openly, then it’s going to cause problems and resentment down the road.

Joe:
Yeah. You know, this is pretty easy for us because we live together, Justin, and we’ve known each other for so long but I can imagine how it would be very difficult for other partners who are new or separated geographically. But it’s something that you should make sure to communicate and the only way you can do that is by knowing each other, communicating on a regular basis.

Justin:
Another thing that’s really important to do is to meet on a regular basis and talk about strategy, talk about goals, talk about direction of your company. So I mean we meet once a week and sit down and talk about the podcast episode but we also meet once a month to specifically talk about the goals that we hit for the previous month and our direction for the next month and then after that, we will go ahead and sit down and put everything in Basecamp and go through what we need to do.

Joe:
Right, and I think that’s a good tip there is to make sure you’re using the proper tools to communicate effectively. Things like Basecamp, setting up little projects allows you to know where the partnership is going, where the company is going. So, one of the other things that you should not do is putting unrealistic expectations or applying your world view to your partner. This is a very common thing I see in partnerships all the time that fail is well, I think it should be done this way and I want my partner to do it that way. Your partner is their own person. They can live their life and there are things outside of business their own way so you can’t force them into your little box.

Justin:
Yeah, and whether it’s their personal life or also kind of their way of viewing the business, you should actually like and respect the fact that they view it from a different perspective. That’s going to help your business grow because they bring different things to the table and different ideas about how a business should be run.

Another problem we see fairly often is harboring ill will or feelings of resentment. We struggled with this a bit in the past where things start to build up a little bit but once they do start to bubble over, we generally sit down and talk about it, go out and have a couple of beers and get over it. I mean that’s our basic strategy for dealing with resentment.

Luckily we don’t let it build up to the point where it’s a huge issue and I think that’s important because that can hurt your business long term because you’re working with these feelings of resentment and it’s just not getting done the way you wanted to get it done.

Joe:
Yeah. It may sound cliché but hug it out bitch.

Justin:
So we also want to cover some of the alternatives to partnerships and I think these are important because you don’t always have to have a partnership to meet your goals.

Joe:
Right. Yeah. I mean the first thing I would say is employees. A lot of the things that you can fill with a partner, you can fill with employees instead and especially if you just have fairly consistent, boring work that needs to be done. You want to be the idea man and you just say, “Well, I want to partner with someone for financial benefit only and have them do all the work.” Better off just paying an employee.

Justin:
Especially if your business really has legs. Why don’t you just pay someone $12, $15, $18 an hour rather than giving them upside in your business. It seems silly.

The next thing I would say is contractors. So if you need like a particular skill set or you’re working on a particular project that is kind of outside your understanding or something you can get done, why not pay for a contractor for that one piece to get done?

Joe:
Yeah. A perfect example of this, Justin, is our Buy Our Sites page. I mean the coding and the programming, the software development was definitely over my head in order to get it done but we could have partnered with a third person and given them a chunk of every sale that we made but that would have been giving up way too much, I think.

Justin:
Yeah. We could have gotten some JV to do it or something but like that’s outrageous because that’s a long term revenue generator for us for a short term project. It just doesn’t make any sense.

Joe:
Right.

Justin:
The next thing to talk about would be mastermind groups. A lot of times especially in internet marketing, it gets boring. It gets a little lonely. So we’ve been doing our outsourcing out here in Davao City and we felt a bit closed it off, right? And that’s one of the reasons we joined Dynamite Circle is so we can meet other like-minded people that are doing similar stuff and traveling.

Joe:
Yeah. I think that a lot of people partner out of boredom. They partner out of just the need to talk to somebody else about their business issues. You can find that from a mastermind group and mastermind groups are free. They’re not going to take half of your business.

Justin:
Yeah, it takes up a bit of your time but it’s a good timeshare because you get something out of it as well and if you’re not, find another mastermind group. There are tons out there.

Another option is mentorships. So there are people in your space that are probably more successful than you that would love the opportunity to work with someone who’s hardworking, who’s motivated and has already started down the path that they’re heading down, right? A good approach for this – I don’t know if you guys have seen this before but check out Charlie Hoehn. It’s called New Way to Work. He did a TED Talk about this and it’s a great way to approach someone who is more senior in your space, someone who has a lot more hours put into something and getting them as kind of a mentor for your business.

Joe:
Yeah, it doesn’t have to be that formal. It doesn’t have to be like, oh-you’re-my-mentor kind of thing. You can just simply approach someone. Ask them for some ideas and feedback on your business and then develop a communication line with them and regularly talk to them about what’s going on.

Justin:
Yeah, and we’re not talking about something like crappy sales page paid coaching or paid mentorship where they’re teaching you but they don’t really know what they’re doing either. No. Definitely don’t do that but I’m talking about reaching out to people who you know and respect in your space that would like the opportunity to work with you and a lot of times, when you’re teaching someone, you learn quite a bit yourself. So you learn about them. You learn about – you’re forced to learn a bit more about your business just by the simple fact that you’re showing someone else how to do it.

You know, one of the other things we should talk about is limited partners, right? If you have to take on a partner, if it’s required, you can take on a partner 10%, right? You can take on a partner for investment at a lower percentage than half of the business. It doesn’t always have to be an equal share of the business.

Joe:
Absolutely we recommend that in terms of an equity partner that they don’t get everything and if they’re not going to do any of the actual work, they’re just going to put up money, they shouldn’t get 50% of the business.

Justin:
Another thing would be an accountability partner. Pat Flynn in a recent podcast – we will link to it in the show notes – but he talked about finding someone else in your space that’s about at the same level and kind of working together to build a community, to have conversations back and forth to work with and so this is a partner that may be actually a competitor of yours but you tend to work with fairly closely because you like what they’re doing. Your skill sets match or your vision and ideology match, something like that.

I think we kind of have an unspoken thing with like Spencer from Niche Pursuits where we’re kind of along the same path, talking about the same things and we just generally like each other. We like what the other one is doing. So …

Joe:
Yeah. I really love this concept actually because you don’t have to give up anything financially but you still have someone to talk to, bounce ideas off and be accountable to on a regular basis.

Justin:
Another thing that you can do is an advisory board. Now this probably isn’t for a one-man internet marketing show but you can actually get people at a very small equity position in your business, normally 1 to 3%, that will actually sit on a board and kind of sit in on your strategy meetings. You will have to be responsible to them for your revenue growth, these types of things and you can set those up relatively quickly. I know a lot of people are looking to sit on advisory boards. So if you ask a few people that in your space, that you think would be helpful to your business and would really help grow your business in the right direction, that may be something for you to check out.

Joe:
Yeah, I think that’s especially true when you’re going from being a moderate success to a large success, bringing in other people that have industry experience and giving up a very small percentage is totally worth it.

Justin:
I think that honestly we’re not in a position to do that but I think someone like Pat Flynn might be or may help grow his business if he takes on some senior people and like have them in advisory positions for him. I don’t know but you look at Pat Flynn stuff and he often like breaks the mold anyway. So he might not actually go along with what they’re advising him to do.

Speaking of Pat Flynn, someone who listened to our last podcast, podcast Episode 5, I think he had mentioned the Pat Flynn – something about us saying that we mentioned that Pat Flynn doesn’t really believe in Bluehost or that was selling as an affiliate but doesn’t really believe in it or something like that and that’s not the case at all.

In fact, what we were talking about was that I looked at Bluehost and the money that Pat Flynn was making off that as an affiliate and I said, “Oh my god, why don’t we switch some of our sites to Bluehost? It seems to be pretty popular. Maybe we can talk about Bluehost.” And Joe didn’t like it all that much. He looked at Bluehost and for him, he didn’t want to go with that. He wanted to try HostGator. So it’s not a knock on Pat Flynn at all. I know Pat Flynn does believe in Bluehost. That’s just a matter of opinion or a preference actually.

Joe:
Yeah. I’m not sure how this confusion arise. I listened to the old podcast again and to the area. I just want to say that I think Bluehost is actually probably better than Go Daddy. It’s faster. The cPanel is a little bit better but HostGator in my personal opinion just happens to be a little bit better and it has nothing to do with affiliates or Pat Flynn or anything like that.

Justin:
Yeah. I think by Pat Flynn and us, I mean we only recommend things that we actually like or appreciate or we’re working with and he does the same thing. So we’re on the same page there. There are no issues.

**** The AdSense Flippers Podcast continues ****

Justin:
And now on to our ninja marketing tips, tricks and our plans for the future.

The first thing I want to talk about is audio books. I was looking to get into more book reading and listening to more books, reading more books and I found a nifty, little program called Audible. What Audible is, is it basically allows you to download audio books and I think there’s a monthly fee, 10 bucks a month, and you can download one book a month. So I’ve been doing this for the last couple of months and it has been fantastic for me. I can go get a foot massage as I listen to a book. I can right before I go to bed start playing it in my ear buds. Great deal.

Joe:
Yeah. You bought me the subscription for my Christmas present. Thank you, buddy.

Justin:
Merry Christmas, man.

Joe:
And I’ve been listening to a recent book that actually Dan Andrews recommended, Sex at Dawn, which is about human sexual behavior of our ancestors and stuff like that. It’s a very interesting book but I don’t have a lot of time to read and I find that the audio format does work for me like when I’m in a taxi or I’m on the way somewhere or I just want to, like you said, relax, foot massage, hanging out, that kind of thing.

Justin:
Yeah. I listen to Derek Sivers’ Anything You Want which I thought was fantastic and then I’m working on The Lean Startup which is pretty cool.

Joe:
It allows you to consume books a lot faster than you normally would.

Justin:
So our next tip for you is for any internet marketers out there that don’t really feel you have anyone holding you accountable, don’t really know who to turn to for that, you’re not in any mentorship programs, I want you to look into a program called Score and this is what Score is. It’s built by the Small Business Administration specifically to help small business people kind of get on track, get up to speed and help them. What they do is they set you up with a business executive, often retired or older but quite experienced and you sit down with them on a regular meeting, like once a week or once every other week and kind of go over your business, where things are at, where you plan on going, that type of thing.

Joe:
Yeah. We did this for our mortgage business and it was extremely helpful because that was the first business I had ever really run. So having someone there as kind of a mentorship almost to guide us through all of the little issues plus keep us on track for the bigger issues was extremely helpful.

Justin:
And as your business grows, you can go from having that – oh, it’s a free program too but you can go from having that mentor to actually setting up an advisory board. So they will do that where you have to go in and go over profit and loss. You have to go over your strategy with them and they will kind of guide you and help you make out your plans for your business. It’s a really cool program so we will put a link in the show notes. You can check it out and see if it’s going to work for you.

Thank you for sticking with us on the 6th Episode of the AdSense Flippers Podcast. We’re really excited we’ve gone to a weekly format. I’m liking it, man. What do you think?

Joe:
Oh, I love it. It’s so much better than blog posts. I feel like I can really get my thoughts out there a lot faster and it’s much easier.

Justin:
Yeah, I’m glad man. You seem a bit more fired up about it than me telling you, “Oh my god, it’s time for another blog post,” and you’re like dreading it. Anyway guys, thanks for sticking around. Had a great episode and we will see you again next week.

Joe:
Bye-bye everybody.

 

Topics Discussed Include:

  • Major mistake on BuyOurSites page
  • Setting up a “capture” outsourcing center for a client in the Philippines
  • Mastermind group and the growing Internet Marketing scene in Davao City, Philippines
  • The clear benefits to partnerships in the Internet Marketing community
  • Our experience and challenges with partnering on multiple business with examples given
  • Actionable Do’s and Don’ts when it comes to partnerships
  • Alternatives to partnerships
  • Ninja Tips: Great, local resource and business counseling for start-ups and small businesses
Mentions:

Questions or comments?  Feel free to let us know what you thought in the comments below.


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  1. […] Our partnership podcast episode – Where we discuss our partnership, what works, what doesn’t, etc. […]

  2. […] Our Partnership Podcast Episode – We didn’t want to rehash too much, but you can listen to our thoughts on partnerships here.  Make sure to check out our interview on the LifeStyleBusinessPodcast on the same topic! […]

  3. dano says:

    Slight update about my “partnerships” in the appropriate thread, cant really call it a partnership, it’s more a “working together” thing. Anyway, 1 week have passed since I gave my outsourcer a set of keywords and no site have been setup so far / nor a domain have been registered so launching many sites is not something I see happen very fast.

    Another thing is that 2 or so article writers just won’t cut it. We are already waiting a week for articles to be delivered from an external person and we ordered articles from Fiverr for one other site and thats also taking more then 48 hrs so we are very far from reaching 10 sites/day goal, in this way we wont be able to launch 1 site a day.

    Let me first say, none of the partnerships (except for the 1st one with the authority site) are a 100% fact, to do so we would need some clear agreements and securitys that one or the other can’t run away with the sites when it becomes a succes, thats a bit harder to realize then I expected, especially if one party does all the investing / registering domains he could easilly run away with the sites, even if I host them it only takes some copy/pasting and redirecting the domain. Since I know the person only from the internet it bothers me alot. I just hate to depend on trust/faith.

    Lastly, the idea was to launch 100’s of sites but now that I’m in a further phase of kw research I am finding many very easy kw’s that dont require 100’s of sites to make a standard income and I’m only at about 10% of my list. Maybe I’m selfish here but I realise that if I work alone om this I can achieve good results pretty fast with low investments. I could also say I keep those real gems for myself but that would be pretty dishonest and I’m sure I would feel guilty about that.

    So I’m seriously thinking to call it off. What you say? Am I just a selfish brat here now that I ‘ve seem to found the gold or is it justified?

    • JustinWCooke says:

      Hey Dano!

      The only thing better than calling it off would have been to not get involved in the partnership in the first place, IMO! Not to beat you up or anything…I just really think this is something you could better do yourself and PAY people to do some of the things you would rely on a partner to do…it will cost you much less in the long run.

      The first/best thing to do though, always, is to do ALL of the steps yourself. That way, when you go to train your outsourcers you don’t just hand it to them and hope they “figure it out”…you can walk them through it, step by step, because you know it well yourself.

      With content writers, I would hire a couple…find out which seems to have the best grasp of it…and then have them no longer WRITE the content…have them ORDER the content and then edit it when they get it back. Your one VA will be able to do WAY more content that way. You pay for it, but your VA will be more efficient and you’re maximizing value. (And it’s WAY better to have your VA manager all of those content writers and suppliers than doing it yourself!!)

      Think about it this way…let’s say that you had this all figured out, were pumping out sites, and making a bunch of money. Would you want to partner with your VA or a content writer? No way! You’d rather keep them in a paid position so that you can keep rolling in the dough rather than splitting it 50/50 with them, right?

      Once you get it rolling and making a good amount of money you’re then in a position of power. IF you decide to take on a partner, your partner had better bring a LOT to the table…because you already do! You’re much better in line to get a great partner that can really add value to your new organization.

      • dano says:

        Wow I love your idea about letting one of the best writers manage the content writers and proof reading / editing it. Yesterday I already had an issue with my outsourcer that the quality sucks and was looking out for a proofreader on Fiverr, however when I offered my current outsourcer a deal for less money, he accepted it, but soon after the quality of the content improved hugely, still not perfect but well enough for this one specific site hes working on, turns out he found the existance of a grammar checking tool (although I pointed him at that 2 weeks ago already but whatever). As you know I’m not yet into the phase of having a VA manage others but will certainly do so when the time is right.

        I totally agree that once I get this thing rolling an eventual partner has to bring a LOT to the table as I wont need a partner by then. This thing was more of an emergency thing to get the ball rolling faster but I should focus more on the long term right away indeed. Thanks for your insights!

        Btw this authority site thing with a friend of mine is also taking quite a bit more time then expected as with all things, might cut that off as well or charge a hourly rate for my time invested. It all looks so easy at first glance but practise always works out differently. For instance I’m already spending 4hrs for an ultra spun article based on 15k words to rank all innerpages, and then I still have to edit it for each page (auto replace) and submit it.

  4. kev says:

    Hi guys, just want to thank you for the podcasts, I love them. I like the way its just a casual conversational style format. I’m another one of those people who has been toying with the idea of moving to the Philippines. Now after finding your site and looking at rental prices in Davao, it’s high on my consideration list. I was considering Cebu..

    I’d love to join your mastermind group if I end up in your area. I hear you on a lot of your points as far as being around like minded people. I’m here in Tokyo right now and with the language barrier and time difference with my friends in the west it gets really tough to stay connected and be inspired. Your blog has been a life saver for me.

    As far as partnerships.. I tend to shy away from them too. I do develop sites/projects with friends here and there, but just for fun and as a learning experience. Money hasn’t been an issue so far because we focus our value on developing new platforms/strategies that we can build on our own separately using what we learned from our joint projects.

    • JustinWCooke says:

      Hey Kev,

      Funny…as I’m writing this I have a new blog post I was working on that will be a “living document” recording resources for moving to and getting started in Davao City. It’s pretty specific, but we get asked about this quite a bit and it would be nice to have a resource to point them to. It will be a bit bare-bones as I get it up, but I plan on adding to it quite a bit in the future.

      I’m not the best person to ask about Cebu (I’ve only visited twice), but many of the foreigners that I’ve met with or that have come through here consider Cebu to be way overrated. If you’re looking to live in a city, your top two options (IMO) are Manila and Davao. Anything outside of that would generally be a much smaller town/city. At times I wish I was in one of the more “touristy” and fun parts of the Philippines, but living in Davao works out well as it lets us be a bit more focused on our business rather than the beachy, party places would.

      There are some other benefits to partnerships I don’t think we fully covered on this podcast. We spoke to the guys from LifestyleBusinessPodcast and they wanted to follow up with another “partnership” podcast on their show and we did an interview with them that I thought went really well. They should have that episode and interview out this week…you should check it out if you liked this episode!

  5. Justin says:

    Really enjoyed the Podcast. I am exploring micro-partnerships where I work with somebody on a small project/experiment. The key to this type of work is that there are no expectation of success. However, this seems to work for me since it is a great way to get to know somebody, work on a small project together and being able to learn from each other. It’s sort of like business dating.

    Also, here are a coupe of topics that I am interested in –
    1. Hosting – Right now, I have a hostgator reseller account with about 40 sites. I need to expand but I am not sure if I should get another reseller account, my own server.

  6. A couple of questions for you guys:

    1. I noticed that you have some hyphenated domain names. How has that worked out for you?

    2. You seem to not mind buying branded domain names. Is this something that you are continuing to do? Have you had any companies contact you to take them down?

    • JustinWCooke says:

      Hey Mike…thanks for commenting!

      1. It’s been a while since we’ve looked at it but, in general, sites with hyphenated domains didn’t rank as well with our process. That’s not to say that they can’t (they can) or that none of them earned money (some of them did)…it’s just that, in general, we think they’d require a bit more backlinking to get ranked…and that’s not our model.

      2. We have bought branded domains name in the past and continue to do so now…although we do try to limit it where possible. We have been contacted by the related companies (Guessing here…probably 12-14 times?) In some instances they didn’t respond to our response, in others we sold them the site, and we’ve also handed over or deleted the sites as well. Most of the time the company contacts us: A) In the first 2 weeks after buying domains or B) Shortly after the site gets ranked. In only 1-2 instances did they contact us after a site had been up for 3+ months…that’s pretty rare.

    • JustinWCooke says:

      Interesting…

      We’d be pretty upset if HostGator took down ALL of our sites because of one complaint. Still…we’re pretty on top of emails and wouldn’t miss this.

      Also…can’t believe everything you read in anonymous forums…who knows, you know? hehe

      • I believe it, but the original poster said he did not see the reply after he was given a warning to take down the site in 48 hours. GoDaddy does the same thing except they only give you 24 hours. Moral of the story? Stay on top of your email!

        • dano says:

          Damn, I have so many emails that I regarly forget to check them and I “borrow” lots of copyrighted images. I should put a post-it at my desktop saying: CHECK YOUR E-MAIL EVERYDAY lol.

  7. Andrew says:

    Really well done podcast! I’ve been reading your posts for a bit but must admit this was the first episode I’ve listened to. Thought the info was quite helpful; thanks. I’ll have to go through the first 5 episodes now.

    • JustinWCooke says:

      Thanks, Andrew…glad you liked it! I thought Episode #5 was our “best” so far…but it’s specifically about content regarding niche sites and pretty specific. This is a bit more open and talking about partnerships with internet businesses (and NON internet businesses) in general.

  8. dano says:

    I would never start a full partnership where both people are expected to do the same ammount of work. I’ve heard so many failure storys exactly like the one that you described in the podcast, the “who can do as less as possible” game. Another thing that I didn’t hear you mentioning (cause it might not be relevant to your partnership) are things like going out for lunch covered as a so-called business meeting with “potential” clients and spending tons of money on these lunches and putting the bill on the business account. My accountant had that problem with his partner.

    Personally I just started a sort of joint venture with a silence partner on a very small scale. I run a pokerbot on his name and we share profits for quite some time and we decided to invest all of it in a website. He leaves it all to me and I’ve been clear that I will outsource 100% of the work. He just likes passive income and don’t want to have anything to do with it for the rest and I don’t want to spend tons of time when I have to share 50/50. That kind of partnerships I love. Must admit that if I had the money I would’ve done it on my own, but the good thing is in case it flops I lose less money.

    • JustinWCooke says:

      Hey Dano,

      You make an interesting point about whether or not it’s wise to get involved in a partnership where the work’s split…you just caused about a 30 minute discussion/debate here, lol! I wasn’t sure I understood you at first…but I’m guessing you mean that getting involved in a split-work partnership will NEVER end up with the work truly being 50/50. I think that’s a true statement and can cause quite a strain when you’re first getting started. The “who can do the least possible” game is absolutely horrible for your business…a real threat.

      Between the two, I’d rather be on the “investing” end rather than the “work” end of the partnership you’re suggesting…but it does take some cash to play at that level. If you look at guys like Tim Ferris and Kevin Rose that’s the current game they’re playing…looks like fun!

      • dano says:

        Lol, hope you guys went for a beer after it ;)

        For me personally it’s not only about doing the same amount of work, not sure how to say this but when I want something to be done my way it will be done that way :D unless the other can heavily convince me with very solid reasons not to do it in such way, won’t be an easy task when I have something in my mind. Apart of that I’m also the type of guy who likes to invest back every single penny until it reaches a certain income. That silence partner of mine said: “Yeah if the bot starts to make some money we could cashout a little for ourselves as well right” And I was like oh boy there we’re going already but I just said yes to please him but the true answer will be No but he don’t know that yet :) In the end it will only make more profit for us so it’s the best choice :)

        Would like to add that in your partnership with Joe I would, in the phase that you guys are now, try to take as much profit from the business as possible instead of investing it in more and more in micro sites. Ofcourse keep up with what you are doing but don’t expand production or maybe even slow it down a bit and instead focus more on authority sites. Google is changing the rules more day by day and I hear more and more people complaining about whole bunches of these tiny sites getting de-indexed at the same time. It’s so easy for Google to do this as all sites are connected through the same adsense pub id.

        I think I heard you talking that it’s harder to rank pages for longtails on bigger sites, yes it might be a little harder in the beginning since you don’t have the EMD boost but your forgetting about the snowball effect in the long run. If you build a site with a 100 pages you most probably only have to rank like 60-70 pages of these and with solid internal linking you can rank the other pages without having to spend any further time or money on these. So say it’s 30% harder to rank these indivdual pages in the 1st place then it will even out once you got these 70 pages ranked. And the more pages you get the better the ratio becomes.

        At least thats what I’m after. There is only one BUT about this authority strategy and that is if it will affect your Adsense CTR, with microniche sites they tend to leave asap cause the site is pretty crappy but on authority sites they might stay longer and not exit through a Add.

        • JustinWCooke says:

          Hey Dano,

          We hear what you’re saying with regards to taking some cash out for ourselves now. While we’ve taken some out already, we’ve been pretty consistent with reinvesting a good portion of the profits. Over the course of this year, we’re planning to take a bit more out of the project and realize that increased income personally.

          On the other hand, we’ve leveled off production from Oct-Dec and are now looking to expand again. Our yearly goals call for doubling production from now through Q3 of this year. That will take a bit of reinvestment of course…but we should have enough revenue to do that AND take some out for ourselves. (hopefully!)

          As you may have read, our income report from September had us dealing with a drop in rankings across a good portion of our earning sites. In looking back, it only affected us and not any of our previous customers or site sales. With our model, it was frustrating but not a referendum on what we’re doing overall, which was nice. It is a reason we decided to hold off expanding, though…wanted to continue testing the waters.

          I think you’re right about the snowball effect on authority sites…but it does take longer to test or “see” if that’s working. We ran a preliminary test on two “authority” sites that did NOT work out very well. I should really get a post out about that soon…to show that we make mistakes too…we don’t have it all figured out! Personally, I love posts where people talk about their failures…it tends to be a great learning experience.

          • dano says:

            Yeah I remember it now. When I read it that the sites dropped I was thinking like: “Oh poor customers who bought these sites, they must be pretty mad”, glad to hear they weren’t affected. Poor you guys as well ofcourse but somehow my thoughts first went out to the buyers.

            Probably a smart move to decrease production a bit, maybe Adsense was on to you and forced you to take a step back. We’ll never know.

            I dont really understand why your authority model didn’t work out so I would sure like to read and comment on it.

            Maybe an idea for another post as well: I was always wondering how you got your Phillipin employees in the first place, you did the outsourcing ofcourse but was it hard to find skilled people or was the work so simple that it was totally unnescessary to have any skils. Maybe I’m not really up to date but somehow I have the idea that 95% of the phillipines don’t even know what a computer is ;) let alone how to handle it.

  9. Dan says:

    BOOM! My Saturday just got better. Download na!!!

  10. I’m pretty sure you guys use an aggressive ad placement on your sites. Did you notice any difference today in rankings?

  11. Adam says:

    Awesome episode, guys. Your advice/insight on partnerships is really helpful, since the idea has been on my mind a bit with my new direction, so I definitely appreciate it. You gave me a lot more to think about.

    Probably also going to be hitting you guys up with an email either later on or this weekend.

    • JustinWCooke says:

      Hey Adam,

      Listening to this podcast after we created it we thought it was funny how passionate we seemed when it came to the PROBLEMS or challenges that come with partnerships. I think it’s eye opening as to our feelings regarding partnerships overall…we delved into personal experiences much more when it came to difficulties instead of benefits!

      That’s not to say we don’t have a good partnership. It’s only that to say that it’s EXTREMELY difficult…you’re often better off with the alternatives we mentioned, hehe.

      • Adam says:

        Well put, buddy. I totally hear you. I think a lot of the difficulties you guys were honest about are serious aspects that I’d probably ultimately regret with a partner, so I’m glad your experience confirmed that.

        • JustinWCooke says:

          We’re as real as we can be…but there are times where we are seriously at each other’s throats, man…

          We honestly recommend not partnering in MOST situations…

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