A friend of mine who lived across the street from me was an executive at a big ad agency. I went over and I was talking to him. I said, “I want to be a copywriter. Can you introduce me around? Can I get some work from your agencies?” He said, “You’re never going to be a copywriter because you don’t have a book.” “What’s a book?” He said, “It’s a book of all the examples you’ve done for big accounts. You have to have a book for somebody to consider you.” I said, “Maybe so, but I’m going to try it on my own.” My background was in technology and with banks and auto companies. I understood technology and I understood finance. The internet wasn’t that new at the time, it has been around maybe five years. People weren’t conversing in it and technology was confusing to a lot of people.
I ran a little two-page classified ad in a publication called Adweek, which is where advertising copywriters put out their plaque, hung a shingle, and basically said something like, “Are you sick of copywriters who don’t know the difference between a potato chip and a microchip? If so, I can help.” It generated a lot of interest, but my friend was right. Most people wouldn’t hire me because I didn’t have any prior experience. I always told them, “I’ll work for 20% of the going rate or whatever to get my foot in the door and I will work my butt off for you.” I’ve got a company to take me up on it and they paid me $75 to write an ad that would normally go for about $1500 at the time. The guy was just nasty. He was taking advantage of me, but I didn’t care because it was for a big national client.
I wrote the ad, it went well, and they then came back to me and said, “That was so good. We’re going to pay you $250 for the next ad,” which is again a quarter the percent, but this one was for a subsidiary of Bank of America, a big national client and I didn’t care. I took the $250, I wrote the ad, and now I had a book. It was a very thin book, but it was two successful ads. What I’m getting at is I’ve never just followed the black and white roadmap, “This is how you do it. You have to have a book or you’ve got to create a book.” What I realized, I just looked at my background and I thought, “What advantage do I have that agencies or businesses need?” That is that I understood technology and finance, whereas most copywriters didn’t.
I use that as a lever to get in and I have always done things that way. The main thing I discovered is when you’re up against the big problem, there’s almost always a doorway into the solution. You just have to look for it and you have to find it. A lot of times it helps to talk to other people to find that. The other thing that’s helped me immensely over the years is collaboration. On every big project that I’ve ever been successful at, I collaborated with somebody. The skateboard toy that had Tony Hawk’s logo than the logos of six other big skateboard brands on it, I had never invented a toy in my life. I wasn’t known in the toy industry, I wasn’t known in the skateboard industry, but I had a marketing background.
I thought, “How do I get my invention licensed?” Only 2% of all products that are patented ever make it to market because the inventors focused on the wrong things. They focused on patents and protecting their idea because they’re terrified that somebody will steal their horrible idea. I realized that if I could prove that there’s a market of people wanting to buy the product beforehand and then went to a toy company, we could sell it. Long story short, I made a cheap crappy prototype that I made by cutting up parts of other toys with adrenaline, glued them together. It cost me around $31. I took them around the skateboard shops and toy stores and said, “If I can get a company to license this, would you buy it?” We got eight out of ten stores that said, “We would.”
I also wanted to have a contact in the skateboard industry. I live in San Diego which is a hotbed of skateboarding. I sent out an email to all my friends, neighbors, and business contacts in San Diego only and I said, “Do you know anybody who works professionally in the skateboard industry?” Twenty minutes later, one of my neighbors sent me an email and said, “My son goes to school with the son of Tony Hawk’s business partner. Would you like to meet him?” Of course I would. He introduced me and we had lunch. I showed him the toy. He loved the idea and we’ve partnered on it and I gave him a third. His name is well-known in the industry. He was also a commentator for the X Games with ESPN. I did the commentary with Tony and he got right into a company. Twenty minutes later we got in based on his reputation and his name in the industry. I would have had a very difficult time getting in on my own, so collaboration is really important. He’s a great guy too.
The strength of the idea and when I presented them with the names of the companies who wanted to buy the product, it is easy for them to verify it. In fact, I don’t know if they even ever did verify it because I’d be an idiot to give them these names and have even one of them be false. We walked out of that meeting 20, 30 minutes later with a letter of intent. In a week we had the licensing agreement done. Not blindly following the rules and collaboration has been the two things that have worked best for me. Whenever I’m in a spot and I feel stuck or there’s something new and I want to not move forward linearly but be able to leap over it, and collaboration has been to me the greatest tool for making exponential advances rather than just step by step.
That’s an overlooked leverage point for most business owners. As we’re talking with some of our clients, they’ll say, “I don’t have this, I don’t have that.” The answer is usually not more than an email or a few phone calls away, because there’s somebody who does have it or has access to it you got a relationship with, and you probably don’t know that they have it. It’s a matter of getting out there and having those conversations with people.
It’s amazing. I’ve always used that same approach of, “I don’t have this skill or I don’t have this access path, who do I know?” Then I email those people and it’s absolutely amazing some of the results that come up. When I took a break for a couple years and started a software company with a couple partners, and it was a testing and assessment software for the online training industry, we send out an email to everybody we knew, “Who do you know works in the training department for a Fortune 500 company?” It turned out that our webmaster’s secretary saw it and she had a connection with the Secretary of Education and we got an introduction there. Somebody else introduced us to the Head of Online Training at Deloitte Consulting. They loved what we were doing and they’ve became our champion and introduced us all over the place, to Ford Motors, IBM, and all these companies. We were this little three-person shop that nobody had ever heard of, but we had a great model that demonstrated what the software did. It was all through collaboration. That’s always been the avenue I’ve used to move forward exponentially instead of step by step.
One of the things that I like going back to is the example that you gave with the skateboarding toy. Not only did you go and used collaboration to find the right person to open that up, but it sounds like you also realize that if you let them in, let that key contact in so that they profited from this as well, now you’ve got them on your side and they’re winning and you’re winning. Instead of you trying to hoard the whole thing and maybe settling for a small pie, you went and shared some of that and expanded it out.
The company that we licensed it to is doing about $100 million a year in business, which is actually small in the toy industry, but it’s still sizable and it’s a good-sized company. I could have had 100% of a deal with a company that’s new, maybe making $5 million a year. I’ve got two-thirds of the royalties from $100-million company and I met a great guy. I’ve done other projects with him over the years too. I got access into both the skateboard industry and the toy industry that I would’ve just taken the years to do on my own. I would have made less money and it would’ve taken a lot more time. I believe in being very generous and sharing the portions as well.
That’s a little bit of an unusual approach. A lot of business owners will look at that and not only will they want to protect their intellectual property, but they’ll also want to hold on tight to the profits and the proceeds. Both of those can be dangerous. Many ideas get trapped because they’re a secret. It’s like, “I got this great idea. I’m not going to tell anybody.” What’s the point of that?
That’s what happens. That’s why only 2% of patented inventions ever go to market because they were done in a vacuum. The person was so protective of it that they wouldn’t tell anybody. They never got any accurate feedback as to whether or not the idea is good or not. “I’ve invented shoes with a built-in mouse trap so I can walk around the garage and catch mice if there are mice in my garage.” Okay, great. You’ve paid $10,000 to patent that. You’ve paid another $15,000 to $20,000 to make this fully functional prototype that nobody cares about because nobody’s going to buy it. It’s pretty amazing but the patent attorneys make a lot of money.
They always do. That’s what I love about all of our attorney clients, they get it both ways. Brilliant stuff. I appreciate the insights that you shared. The critical role of collaboration is one that’s overlooked. For most businesses, no matter what problem that you come across, you’re probably no more than an email or a phone call away from solving it. I know you’ve spent an awful lot of time working on perfecting the model of joint ventures. What have you found is the key to making those relationships work?
The key goes back to what we touched on, which to me is collaboration because the big problem with the conventional way that people are taught to do joint ventures, as they said, was to put together a great pitch for your product and send it out to the ten top people in your industry and ask them to sell your product and show them why it’s great. You get zero response because, number one, those companies are getting 100 emails like that a month, sometimes 100 a week. They have no time to read them. They have no time to do due diligence to find out if your product is what it claims it is and your reputation is as good as you claim it is. Secondly, even if they did look at it, you’re saying, “I’ll sell your product to my list too.” “How big is your list?” “It’s 2,000 people.” The big company you approach, there’s 180,000. There’s that massive disparity. What is the attraction to them? There isn’t. Then there’s always the issue of, “If I don’t know you, how do I know I’m going to get paid?” Those three issues create so much friction that according to Entrepreneur magazine, 70% of all joint ventures fail. That doesn’t take into account the number that never get off the ground because partners are approached that way. It’s closer to 90%, 95% fail.
A lot of the reason for it is because of the so-called experts who teach companies how to set up joint ventures because that’s the thing they tell them, “Just write a great pitch, keep it short and tight, and send it out and people will flock to you.” It doesn’t happen that way. I’ve talked to a lot of different experts and I said, “How many pitches do you do look into companies you don’t know who want you to sell the products?” Most of them say zero and some say 1% to 2%. I started thinking about this and again I thought, “What’s wrong with this logic? What’s the fault here?” The fault is that most joint ventures and most strategic alliances get done because people know you. They either know you because you’ve worked with them or you’ve been referred to them. You don’t have that relationship when you’re approaching somebody with a joint venture. They don’t know you. That is the main reason. What I created was what I called a flip joint venture, where when you approach a company, you start by offering to sell their product first and you never ask for a reciprocal.
I had to approach it and I’d say, “Steve, my name is Bob. You don’t know me. I make blue jump ropes. I got a list, it’s not big. It’s maybe 2,000 people, but they like the jump ropes and you make that red and yellow double jump rope. I know people love it because you’ve got tens of thousands of customers and testimonials. Could I sell your red and yellow jump ropes to my list? I’d like to sell your stuff.” Basically you’re saying, “I would like to sell your product. Would that be okay with you?” When you do that, you can get 99% buy in from partners because who’s going to say, “No, I don’t want free sales?” Now the credibility issue is gone. If you do that and then you repeat that sale maybe two months later and you’re making money for this expert, now when you approach them, you have a basis of a relationship. First of all, you were being of service to them first without asking for anything else. Also, you’re getting paid to build your relationship with them because you’re making money selling their red and yellow jump rope to your blue jump rope customers. The most important thing is when you approach them, you have the foundation of a relationship.