Smaller bits from the host of Dcommunications.net

Tuesday, August 4, 2009

Upfront gains for long term losses?

Anyone doing work with a small start up should think seriously of their need. Are they in dire straits and steady income is the priority. Well, that doesn't lend itself to much strategizing. If there is wiggle room, though, short term cuts for long term relationships shouldn't be overlooked.

I met with the founder of a start up today. There's no revenue, the product is essentially in the exploratory "pre launch" phases. My bid for a one month contract was $0. Why? Because, the relationship (since it's an amazing product with huge growth potential) is much more valuable long term. Concessions are a part of any successful business. Whether that means toiling away for decades under the thumb of a horrible boss or being dead broke to start your dream.

It's only a month and the long term gains (please don't think that synonymous with money) are worth far more than $1,000.

Contract negotiations must be thought through long term. What do you need from this person and what are they telling you. If their message is "wow, this is really expensive" does it make sense to try to leverage the most money possible right now? Of course not, waiting is a skill. If it takes off and the revenue is much higher you're also positioned as someone who believes in the product...big time.