The Best Kept Startup Secret.
I was doing a partnership with an overseas startup. They approached me first and wanted to chat. I knew who they were, but I entered the conversation with extreme caution.
More than anything, I was looking to see what their goal was. Was it really to inspire people or was it to monetize everybody with no regard for helping people?
We had the phone call and immediately they pitched me. They told me what they were going to give me and then they outlined what I must do for them.
The tone was rude. Their intentions were the opposite of their vision on their website.
I smelt the dirtiest terd I’d ever smelt.
None the less, I kept listening. The whole conversation was full of self-promotion and the gentleman spoke down to me. He said something like “I had a thousand people working for me at such and such a company.”
Obviously, numbers of people didn’t impress me when he demonstrated crappy leadership skills on a call with a bloke from Australia, named Tim (me).
The conversation took an hour of my life and because of the time difference, I had to stay up very late to have the call. This wouldn’t have bothered me if I didn’t have an important job interview the next day.
Regardless, it was a call I had to have out of respect for the other side who knew people I cared about. At the end of this crappy call, I enabled by growth mindset. I asked myself one question:
“How does this call help the people I’m trying to inspire online?”
This question led me to the best startup secret that I’d like to share with you.
The best kept Startup secret is “Mutual Value.”
Business is about working with people. If you can’t work with people then you’re going to suck at business.
To be successful with a startup, you need to bring people in and get them to help you. Some will be employees, some will be suppliers and others may be through partnerships (like the call I had).
To motivate people to work with you, you have to provide mutual value.
This means if everything is in your favor, you’re screwed. Who would be motivated to work with someone when everything is clearly in their favor? The answer I’ve learned is no one.
The best way to think of mutual value.
Mutual value is about finding a middle ground. It’s about ensuring that there are wins on both sides and allowing a bit of negotiation along the way.
Bragging to your mates or co-workers that you screwed the other person/company is the quickest way to go bankrupt.
People know when they’ve got a bad deal and haven’t reached the holy grail of mutual value. It feels like garbage. You end up dealing with the following:
• The other side could turn against you
• They could pull out of the opportunity
• They could come back and negotiate twice as hard meaning you walk away with less, not more
Think of mutual value like a marriage — it should be long lasting, happy and involve giving a lot on both sides.
When both sides take something out of the opportunity, you end up working together.
Not against each other.
When both sides are winning, you both want to help each other. You find ways to collaborate and that leads to even better results.
Having what’s called “Skin In The Game” is the basis for mutual value. It means both sides have something to lose and both sides have something to gain.
It’s this reality that allows partnerships and collaboration to flourish naturally without too much effort.
Ego kills mutual value.
You’re probably thinking “Yeah, yeah, yeah Tim I’ve heard it all before.” It’s this egotistical attitude that destroys any prospect of mutual value.
When your ego makes you believe you’re superior to the other party (like in the story described above) the chance of mutual value is abolished.
Ego tells you that you deserve more when in reality you don’t. Startups lose because they’re brand new to the business game yet they act like they’ve been doing it for years.
“Being real and authentic — instead of flashing your ego like a Rolex Watch — is how you get to a point in a conversation where mutual value can be achieved for both sides”
The lesson from my experience.
The terms of the deal I received were twisted. What I mean was that the benefits for my side were actually not my benefits at all — they were their benefits.
Many startups have the same problem. They think the benefits they bring to the table are valuable for the other side.
Unless you truly understand the person you’re trying to work with, you’ll never understand what true value looks like from their perspective.
When you can’t see the value, you end up pitching something that is completely in your own favor and that’s not mutual value.
Shortly after, the deal falls over and you get left scratching your head. “What happened?” you say to yourself.
Let me explain one more time.
What happened is you forgot the best kept startup secret that so few people understand: Mutual value is the only way to win.
Both sides need to win otherwise you lose by default buddy.
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