Business Development | David Chan

Joint Ventures Past, Present and Future

March 20th, 2009 By DavidChan Leave a Comment

It used to be that when people talked about joint ventures, it meant some convoluted, complex, long drawn out business relationship. Everyone was on their pins and needles waiting for legal contracts to be drawn up, lawyer reviews, back and forth negotiations, concessions here and there. Miraculously, one year later, voila, you have a new joint venture. Three months later, the relationship sours for one reason or another and the partnership falls apart.

Joint ventures, of course, are referred to by many different names, not the least of which includes: partnerships, strategic alliances, alliances, etc. No matter what you call it, joint ventures are designed with the intent to create more value from two or more entities than you would have with only one alone.

In my first year at Oracle, I created a joint venture between several technology companies: Oracle, Novell, Intel, Synoptics, etc. We dubbed the joint venture, TIE for The Integrated Enterprise. At the time, integrating solutions from several different technology providers was a difficult task. On top of that, one had to figure out how to train and support customers and resellers. The goal of this joint venture was to reduce the complexities of implementing cross – company technologies.

At Hewlett Packard, we launched a joint venture between Oracle and Hewlett Packard. Customer Relationship Management (CRM) software was blazingly hot and both companies desperately wanted to be in the space. A joint venture relationship was developed, a marketing plan was drafted, a team was assembled, revenue goals were quantified and an execution plan was launched. Both companies benefitted from this collaboration because each leveraged the others core strengths in hardware / professional services and software and support.

Another example of a joint venture in the music industry was when MySpace inked relationships with the big music labels. The result of this venture was to create a new MySpace Music entity where the labels gave streaming and downloading rights to this new entity. The goal of the joint venture is shared advertising revenue, which of course, with 100s of millions of users is an advertiser’s playground.

So, what does the new world of online marketing and profit systems look like? In this new era of Internet and mobile marketing, affiliates rule the playground. The affiliates and, even more so, the super affiliates are the power brokers. Joint ventures are common in this business and move at the speed of, well, the digital network. Those who understand how to work with affiliates will see a multiplicative effect of their marketing dollars.

Joint venture brokers are also gaining in popularity. These are “brokers” who can marry the super affiliates to companies who are looking to jump start their online businesses. This is no trivial pursuit, as it requires, just like in the “offline” world, a strong product, a huge market, a business plan and lots of diplomacy and tact.

Joint ventures can be a great way to accelerate sales, as well as to reduce the complexities of going it alone.

Business Development For The George Mark Children’s House

March 7th, 2009 By DavidChan Leave a Comment

Everybody needs business development help at one time or another and certainly charities are no different. I used to think that business development was really an “enterprise” thing because that’s where my roots are from. But, driving business and creating awareness really is an “everything” thing.

I was extremely touched yesterday when I visited a very special house in San Leandro, CA. The house is really not a house, but a haven, a sanctuary where angels go to heaven. The George Mark Children’s House is the only place of its kind in the United States. Its mission is to provide comprehensive and compassionate medical care and services to families of and children with life-threatening illnesses. The house provides respite and “end-of-life” care for children who essentially are preparing to die.

George Mark Children’s House serves more than 200 families per year from around the San Francisco Bay Area and Northern California. However, they’ve also accepted children outside of California, as well. There are no eligibility standards, as they welcome families of all race, religion, and national origin … truly a “one of a kind” facility.

How does business development work in this particular circumstance? The recession has hit everyone hard. George Mark depended on charitable donations from several large donors. These donors have significantly cut back over the last year or two, significantly impacting the facility’s budget. That said, all of the employees from the cooking staff to the nurses to the administration have voluntarily cut back their wages AND worked more hours so that the quality of service would not be impacted.

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Then, the community outreach team went into motion. An all-out awareness campaign was launched to garner support and donations. Local press, radio stations and TV channels have started to run campaigns for their cause. A local sports team has donated equipment and money to the house. And, a number of celebrities have agreed to run their own campaigns to drive even more awareness and support. The resident computer support / chef / “do it all” person created a Facebook account to encourage individual donors.

But, more is needed if the facility is going to stay open. It’s a grass roots business development effort to drive awareness broadly across the nation. And, how best to make that happen than through the velocity of the Internet? The small local team within George Mark can only do so much with local coverage. More charitable donations, cause-awareness campaigns and support from a broad-reaching group will need to rise to the occasion.

There is nothing more precious in life than the life of a child. If we can all make a child’s life a little better while he or she is on this planet, we will all have made a difference that transcends any “business” business development.

Filed Under: charity and business development Tagged With: Add new tag, angels, business development, charitable donations, charity, child, children, david chan, george mark, george mark children's house, grass roots

The $10 Million Business Development Experiment

February 21st, 2009 By DavidChan Leave a Comment

I recently read with great interest the cover story in January’s issue of Inc. magazine. The story is about a young man named Markus Frind out of Vancouver, British Columbia. The story describes how he was able to slay Goliath on the Internet in one of the largest categories of online services: Internet dating. And, he did so by charging zero money, nothing, not a cent.

Markus had formidable competition from the major players: Match.com, eHarmony and Chemistry.com. Not only were they already generating revenue, they had an “army” of employees … in some cases as many as 100 people.

What was so unique about Mr. Frind’s business development model? And, why was he able to get on the front cover of Inc. magazine? The whole online business model has changed radically from the days of big enterprise software companies. And, even from the more recent phenomenon of “Software As A Service” or SaaS.

In the enterprise software days, the model was to charge hefty software license fees, plus training, plus support, plus name your fee. By the time one was done with all of these fees, you’re now into the millions, if not hundreds of thousands of dollars. Then the SaaS model evolved. No more need for expensive software licenses, just pay us a monthly fee and all your troubles go away.

The new business development model has really come full circle to Gillette. Give away the razor to sell the blades … or HP for that matter … give away the printer to get the ink sales. Markus couldn’t figure out why people needed to pay money for a dating service. Why not give the service away for free? And, in so doing, drive significant traffic to his website.

And so he did. His site is so successful that he generates $180,000 a week in advertising sales or $10 million dollars a year. Why are companies so eager to advertise with Mr. Frind? One point six billion visitors every month come to his site every month … yes 1.6 Billion visitors … every month.

The new business development model that has evolved here is the strategic decision to give away a service in return for acquiring a loyal subscriber base. Not just any subscriber base, but a HUGE base that covers every demographic: age, sex, religion, etc.

This database is an advertisers’ dream! Every possible way to slice data is available for the advertiser to play with and tweak. So, Mr. Frind’s business development efforts really revolve around which advertisers to allow into his network.

Oh and by the way, did I mention how many employees he has? Three! Yes, 3. His site is so simple to navigate, no fancy graphics or flash animation. In fact, it reminds of a cross between Craigslist and Google. But, it works! And, it doesn’t take an army of people to manage. So, guess what? The other beautiful thing about his business model is that his net profit is 50%! What an enviable position to be in.

The new way of business, then, is how to drive a huge subscriber list. Once you get that list, determine the makeup of that list, their demographics, what sells, how to sell, test and tweak. Simply put, you don’t need huge venture capital anymore, nor do you need to develop complex software either.

If this model doesn’t excite you, I’ve got a bridge to sell you.