A joint venture (JV) is an agreement that mutually benefits two or more businesses with complementary resources or overlapping customer avatars.
Complementary resources can be products, services, assets, software, customer lists, social followings, and equipment.
Overlapping customer avatars means that all parties target or cater to a similar customer base.
For example, let’s say that your avatar is mountain bikers, and you own a few brick and mortar bike shops.
You could ask a helmet company to pitch your bikes to their email list (email drop) in exchange for a cut of any sales that they bring in.
You could do the same with any other biking equipment.
And then pitch them in an email drop to your list as well.
Now, why is this strategy so powerful? Both sides are taking something that they already have and sharing it for a win-win.
JV’s are also perfect with companies that only contact their customers once!
Examples of this are service companies for uncommon services like plumbers and electricians.
Or companies that only sell a single, one-time use product.
If JV’s are so great, why aren’t there more of them?
It comes down mostly to common entrepreneurial psychological fallacies or lack of skills like:
- Poor communication
- Low self-trust
- The ability to trust a direct competitor
- Being the big-cheese and wanting to do everything alone
- Overcomplicating the legal side
“Do long term business with long term people” – Naval Ravikant.
This simple rule will quickly deal with any road bumps that come up in a JV.
JV’s let both sides grow their business for basically zero out of pocket.
They are thus allowing you to get more creative with how you solve business problems.
While the thought is fresh in your mind, map possible JV opportunities that your business could take!