Making Joint Ventures Successful

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Very good, thanks.

Hey, maybe we can just kick off with a brief description of your role, your previous role at Goodyear.

Yeah, sure. In Goodyear we came through or kind of came into Goodyear at a very interesting time and there was three major phases that Goodyear went through throughout that decade that I was initially we were focused on the divestitures. Then we went into the entity restructurings around minority shareholder joint ventures that we had. And then last two years we really focus on the acquisitions. So my job was really towards the end is understanding how do we transition from a company that was divestiture oriented and then restructuring into a company and processes that are serving the acquisitions and growth through acquisitions. So that was really my objective overall last year years.

That's a pretty big redirection from a sell focus to a buy focus.

Definitely. Yeah. And the interesting part is that in order to change a culture, we really needed to focus on changing the processes themselves. So we started really focused on, okay, who approves what stage, what other stages and gates putting a lot more structure into it. And that was kind of the driving force of getting the buy in and ability to move. And we kind of almost triple our rate of execution from two years ago until 2019 where we closed I think about eight deals. And it was really that process driven focus.

Nice. We'll have to pick that topic of structure for scale one of these days. Let's talk about some of the reasons why joint ventures fail.

Well, I think there's many reasons why joint venture fail. There's statistics that most joint ventures, I think 60 or 70% fail within first five years. And there's real little bit of a dynamics of why. But a lot of them do really struggle with cultural challenges. And my experience have been what I've studied or what I've done research on. Not necessarily cultural challenges from a nationality perspective or regional perspective. It's more of a corporate culture what it is and how do they relate to other companies and other, other partners. I mean primary example of them that is daimon Chrysler. It was a good idea, probably good strategy around it. Culturally it just didn't fit and they couldn't make it work. The second part about it is strategic fit and strategic shift. Initially, when the joint venture is contemplated, there could be one strategy. Once it's implemented, the strategies change. One example is back in 2007 when Tiffany and Swatch did a joint venture for luxury watches. And that was in 2007. We all know what happened in 2008. Well, luxury watch market kind of hit a little bit of a wall at that time. It never really took off. It had to dissolve it and went to court and all that stuff. So those are some of the examples of how shifting a strategy can really impact the outcome of a joint venture. And then the last one that I've always looked at is the priority issues. Are the parents putting Their own priorities ahead of the joint venture priorities. And those are the things is when you don't have a clearly defined objectives of the joint venture, each parent will prioritize and say no, I want to do this, this and that. And that really kind of drives difficulties into operating joint venture in a successful long term baby.

Okay, so we talked about some of the cultural challenges coming more from corporate culture and and then strategies that get shifted which is a good example of the economic crisis that could definitely throw things off. And then as well as priorities can also be an issue in getting alignment there. What are some of the steps you think that you can take to make joint ventures more successful?

There's number of steps that go into making a joint venture. That's of course. But you really have to focus on defining what success for the joint venture looks like. That's really the first thing that I would do and focus. Okay, we are forming a jv. How would we define the success? And then put very objective KPIs that can be measured on a regular basis and reported out. And if you're hitting those KPIs allow the JV to operate without too much interference from the parents. You know, we did a joint venture or I did a joint venture a number of years ago. We had a very, very easy KPIs around it. We wanted JV to be cash positive. We wanted to be to profit within the line in the industry and we wanted to increase the volumes for each of the parent. Those were our guiding principles that we had. And then we everything we structured it and every reporting as well as parent involvement was circular around that. And as long as the JV fell into the parameters we assumed or we approach it as a success that follows by strict governance processes. I can't stress that enough on joint ventures you need to understand who is supposed to communicate with who. Who has both authority. How do you resolve conflicts and what is the process of addressing some of the operational items. Definitely would suggest to hire or to assign a key JV manager or a director. Actually has to be pretty much a little bit more senior individual in the organization who can influence the parent organization, who is in charge of managing that relationship and governance of the jv. Have a good exit strategy. What if it doesn't work? Talk about things that are uncomfortable. Talk about while you're still friends, not only after you get in a fight or in an argument with the other side, but have an exit strategy of if it doesn't work, this is how we're going to resolve it. And we're going to remain friends afterwards because most joint ventures that I've experienced, even after the dissolution, you still have supply agreements, you still have very strong relationships. And just because something shifted, it doesn't mean it was a bad idea. It just means that you need to adjust to it and maybe do it, do it in a different way. I'm personally in favor of hiring third party consultants to set up and provide governance structure just because they can do things objectively and they can. It's kind of like having your own, you know, counselor is like they can be objective and tell you things that you don't want to talk about. That's the same way that third party consultants can work in this case around the governance one look at the situation, look at it, what's going on and kind of give you an idea of you got to be careful about this, set up governance this way, set up governance that way and not be afraid of causing some harm in the relationship between the two parents.

These are all good points. So really defining what the success looks like, putting the governance in place, and then also an exit strategy as well, which essentially could be like a form of a prenup in a way because it just didn't work out and you're just building that exit. How do you make sure both sides strategies are aligned before entering into a formal joint venture?

I think the important part is understanding why each side is getting into the jv. From my experience, the strategies sometimes are different for each parent and I'm actually perfectly fine with it. I think that actually serves better because then they're not competing against each other. One of the JVs that I worked on, one side was very interested in the technology or know how another side was very interested in the access to the production facilities. You know, we worked together and it worked well because we were going after different things. So it's not that the strategy itself has to be aligned, it's it has to be done in a way that doesn't compete with each other. Strategies of each parent will change over time. So it's important to understand how changing the strategy will impact the jv. So even though the strategies don't have to be aligned, you need to understand if your partner strategy changes, what will that mean for the JV at the end. It's kind of really making sure that you're okay with the strategy that the other side has, that you're okay with the changing of the other side because you are following your own strategy and you're getting out of the jv. What you need to and not worry so much about the other one.

Yeah. I like the point where the strategies change over time. I think that's a really strong point. And even my experience, I feel like we tend to exclude that view and we sort of structure things for today, but that there's always this variable and change and even now with the current climate, there's always more pressure to change, but that's not factored in and that ends up creating some more tension and issues later on.

Yeah. So if I may add, I mean, the joint venture that I worked on actually dissolving and then reforming something else afterwards was exactly that because it was a very long running JV. It was about 16 years running JV. And what happened is that we needed to change our strategy as the JV was inflexible of adjusting to that because it was never meant to be so long. It was meant to be a shorter JM jv, but it can't continue. So it really causes a lot of heartache is because we were bound by the JV agreements, they did not allow us to adjust to the market and that causes somewhat of a collapse of the jv. The partnership was still good and we still have a very good relationship and partnership with the company, but we had to restructure the JV as it was.

What are some things in terms of putting in consideration early on to be able to address that? That, hey, there may be things that are gonna change and the strategies may change. Like how do you account for that or put consideration for that early in those discussions?

I think there's certain things that you can anticipate. You know, many times I've seen is what happens when one parent runs out of the money, run out of money, and the other one still has it. It's very obvious, very often happens, you know, so you can anticipate some type of scenarios or predict some. But I think that's where the governance comes into play. How do you raise a question or a problem and allow for the other partner to provide enough input yet not able to veto everything that you do or that you need to do? And that really boils down to the governance. How is the governance structured in one situation? One party can act on its own. Can the party act outside of the JV on its own? Or is it going to be, you know, breaking some type of commitments within the jv? Those are all the things that you kind of need to anticipate as you're forming, forming the legal agreements.

Got it. So accommodate changing strategies through your Actual governance structure.

Yeah.

What are the things both sides have to be aligned with before entering the jv?

I think goes back to you need to be really aligned on the objectives, on the KPIs, on the governance. Governance communications. Can't stress enough communications. Everybody you talk to who is part of the jv, probably the biggest complaint they have is the communications they get with the parents. So whenever the parent is not happy, the CEO parent calls and complains about it and tries to get them to accommodate. And then the exit process I think is extremely important because you understand that if it doesn't work it's not going to cause a conflict. It's going to. You have a fair way of going your separate ways. Those are, I think that the things that they absolutely need to be aligned on. The last thing I probably want to say about the alignment is it's really extremely important is the leadership team. Do both parents agree that they're right leaders are put in the place to run the jv or is one side a little bit less favorable to the management team and leadership team and will always complain about it? Make sure that there is a fair representation whether it's higher from within of the parent or whether it's higher from the outside that everybody that the leadership team is picked by both sides and fully aligned that that's the right leadership team because that's going to give the authority to the JV leadership to actually make the choices and make the right decisions and have trust of the parents to empower that leadership.

Can you walk me through what the ideal joint venture process looks like?

I'll try to shrink it down into some manageable time here. But I would say the first part really needs to be trust. Trust that both sides are approaching this in a good faith that their objectives are truly aligned and they really are going in this for the right reasons. Then I would start with going to defining the KPIs and objectives of the JV. So kind of those golden rules of the JV, what JV is supposed to achieve next step, probably very important to have it in this order. Select the leadership team. As soon as they select leadership team, the sooner you will be able to create a unique culture for the JV rather than bringing the cultures of each parent into the jv. And that's really important. You can't really do it without a common JV leadership team then to work on the governance of the jv. And I put governance after selecting the leadership team because I think the leadership team of the JV needs to have an input of how the governance is going to work so they can actually report it and they can provide their own opinion and have their own input into that process. Be very clear on roles and responsibilities, whose role it is to complain, whose role it is not to complain, whose role it is to approve or not, or whose role it is to review. Make sure that that's very clearly stated. Otherwise that's going to trip you. And define the exit strategy. What are the objectives after the exit strategy? You know, I favor the, I Favor Time to JVs with the end date with a possibility of renewal. So each party has, okay, I have 10 years to work on this. If it doesn't work in 10 years, we're walking away from it. That's perfectly fine. Don't do it a little bit shorter or don't do it too short because then people are just not going to be engaged. Give yourself a good enough time. But that avoids creating conflict. If you know that you have an exit point without a conflict, you're going to put enough time and effort into making that 10 years successful. The other part is have a renewal option. If it works, you can always renew it and keep on going. Also, just allow for issues to be raised in a constructive way and allow each party to feel that they have a way out. Don't let the discontentment build within the JV or within a parent because then it becomes very toxic for the parent, for the JV and for the other parent and it'll just suffocate it.

These are great steps. So start with developing the trust between the partners. Define the objectives of the joint venture. The KPIs hone in on the leadership team that's going to be sort of in charge. And then from there to develop that governance process. Then define the specific roles and responsibilities. And then as you got into, define the exit plan. And I really liked how you frame things in a specific interval with these terms to renew it. Almost like my lease.

Yeah, exactly.

So even which is kind of funny because it sort of allows you that room to, towards the end of that term to really go back and start reviewing, hey, is this actually working out for us? Let's do a real good analysis and say, hey, was this success or not? Are we going the right direction? Do we really need to look at a different direction or not? Do we need more?

Yeah, it really forces you, everybody to sit around the table and talk about it and see, okay, what worked, what didn't work, you know, and if we want to renew it, what needs to change and Otherwise you just don't have that forced out.

Right. It's definitely enforced because term's coming to the end.

Yeah.

I want to hear your views on some of the surprises that you've encountered on the JV deals that you've worked on.

Oh, I think there are a lot of them. There is probably in setting up a jv, probably the most interesting surprise that we had was performing JV in the US with a major competitor that is global. And the team was really focused on us, focused US centric. Once we started finally antitrust approvals, we realized that because we were global competitors and we hit certain threshold in each market, regardless that it was only US based jv, we had to file antitrust approvals in various markets as well. Wherever we hit market share higher than I think 40% depending on the market itself. That stripped a few fuses for us in China and Turkey where we had to file antitrust approvals for US JV in Turkey and actually they have a lot longer response period in the US it's 30 days for enterprise approvals, they had 60 days. So it really kind of delayed us by a few weeks. Now we as an execution team welcome the delay a little bit because it allows us to do more testing and be more prepared when it started. But it was one of those things that you wouldn't really think. You have to consider the whole globe as you're setting a very specific market, joint ventures. That's one example. There's other examples of JVs where we had multiple JVs within a party and they wanted to exit some of them. And we were kind of like, okay, how do we operate the other JVs if one of them is dissolved? And that was more of a kind of restructuring in the middle of process that was really just, you know, threw a curveball to the whole relationship. And unfortunately we never really recovered from it. But it was because we weren't prepared for it. We weren't really ready for those changes in strategies or changes in the approach.

So you have some of these compliance sort of related things that even go outside the jurisdiction that you originally scoped out. And then you also have some of the other changes and strategies and so forth. Have you come across surprises that are more like people oriented and just things that really kind of came out from left field and along those lines, I.

Mean, yeah, we had a number of surprises of finding people engaging in very different behavior with our other competitors. We had a case where we thought we are operating under a non compete, yet they found a loophole to one of the leaders from the other side found a loophole to create a direct competition with us. Those were things that were just really kind of threw us off. And those are things that you really kind of have to think. It's hard to think 10, 15 years down the road, but you have to allow yourself to be able to think about it as well as you have to have a mechanism to address them. And I think that's really important because you can't predict every single thing that you can do, but you can definitely try to set up the right mechanism in order to address some of the issues and see how you can deal with it. The problem with the JVS is any negotiations, but particularly with JVs is they're never one time and one item issues because of a complex relationship and a long term relationship of a jv. When you try to negotiate, you can't do the tit for tat exchange. It has to really be more of a relationship based conflict resolution rather than, well, you give me, you do me a favor that's worth 10 million here, I'm going to do you a favor that's worth 10 million there. It doesn't really work that way. Everything they do within the jv, all the conflict resolutions you really need to think about how is that going to build trust for the next conflict so we can actually rebuild rather than go downhill from here. And I think that's something that people really don't pay attention to as they're managing the JVs. Is that that attitude of if I do this, what does that mean for the next round? It's kind of like the game theory, you know, if you cooperate now, you can a lot more at the end versus going the other way.

Yeah, that's interesting. I mean would you frame it as like a give take? But you're not, you don't want to make it precise that hey, this is exactly what I'm doing for you, this is what I'm getting back out of it. But it sounds like there's a little bit more of that broader sense of developing that relationship tying back to that initial trust you mentioned.

Yeah, I think at least for me, and this is why I, you know, this is the way I've approached them and have had pretty good success with them is it is definitely give and take. And through the give and take you build trust, you know, and that, that's, that's a different difficult part when sometimes the players in the JV change because you kind of have to start from the ground up again. So it's important to have the continuity within the jv, but it cannot be one for one. It's really gotta be, okay, today you do me favor, I'll do you another favor tomorrow. Because I never know when I'm gonna need a favor again. And just kind of build it that way. It really needs to be every negotiation that you get into, it needs to be focused on how to build trust for the next round.

Got it. Can you give me advice on doing my first joint venture?

Besides what we've talked about, there's definitely a few little bit of few advices that I could probably say. Most joint ventures fail within five years, but they don't usually fail because it's a bad idea. Usually it's driven by the execution. Most of the idea is actually pretty good. Is that how you execute and how you prepare for it? Spend time thinking about what could go wrong, prepare, find the mitigation paths and then talk openly about, as I said, while you're still friends, while you can actually can come to a resolution. Don't be afraid to raise the issues or raise some of the potential conflicts that you can see coming up, because that's the only way you can address and prepare for them. The other thing is most joint ventures don't end with the solutions or the relationship. Don't end with a dissolution. Even if it fails, there was a reason why you came back, came into the strategic partnership together. Make sure that you are able to preserve that even if the JV fails. For example, if you were after capacity and JV fails, try to see what kind of supply agreements you can have afterwards, because that might be in a mutual benefit for both sides that you really want to continue and go there. And then the last thing which I already mentioned is assign a relationship manager for the jv. It needs to be somebody who is high enough in the organization they can influence your own organization. Many times in the JV relationships, you negotiate a lot more with your own side than you actually do with the other side. And so you need somebody who can really understand the objective of the jv but also understands the dynamics within your own company, your own organization in order to make the JV successful and in some ways protect the JV from individuals who are not vested in it, or who don't understand the objectives or who were not around when it formed. So that's where you really need that one or two individuals who are really truly dedicated to the success of the JV as part of the parent organization.

Those are great tips to get more out of it. Walk me through. So if I'm working on a JV and obviously you're on the front end spearheading it. Can you walk me through the people I would want to bring in and get involved and maybe what that sequence would look like.

What I would bring first is that second tier, the leadership team without a CEO. And you want to bring the people that are one very good subject matter experts to gain respect by both parents. But as well generalists that can do many things within the organization. Because jvs, unlike a lot of parent organizations usually tend to be a little bit smaller and more kind of incubation. So a person that is that you bring in can and will do a lot more different functions within that organization. HR is probably one of the first people that I would bring in. Usually HR is a lot of times an afterthought. Oh yeah, we also need an HR person. No, bring an HR person in very early, bring a communication guy in very early because they are going to be setting up the culture of the JD and that's going to be really important. Once you feel that leadership level, then go and hire a CEO or then pick. Because the leadership team will have to be really comfortable with the CEO. Maybe a little bit different than the traditional way that the leader picks its own team. I'm more in favor of the team picking the leader and only because that whole leadership team will actually be engaging with parents on day to day basis. They will need to have very, very close comradery and understanding of the JV and have the right person leading it throughout it that they really feel that they can depend on the trust and rely on throughout their JV process.

Yeah, that makes a lot of sense. The theme of your points sound very parallel to an acquisition in many ways.

They are. I think they just get a little bit more complex because in acquisition is, you know who a dominant party is, the guys with cash in the jv you have to build consensus and collaboration without the dominant party. And I think that's really important actually you bring up is you cannot have a dominant party in the jv. It just won't work because the other party will feel very disengaged. They will feel that they're not being heard and eventually they will stop working towards the jv. That's I think the very big difference between an acquisition and the jv.

So the goal is to create an independent management team.

I would strongly recommend so and create a very defined communication and expectations from that management team. So what are the monthly reports, whether the expectation and they can Be, I mean, they can be demanding, don't get me wrong, it doesn't mean that it needs to be wall and say, I'll give you two pieces of paper and that's it. There can be a lot of stuff that goes into it. You will pay for it in the administrative burden of the jv. But if that's what both parties agree, that's perfectly fine. However, the biggest problem the JV cannot deal with or is not good in dealing with is quickly adjusting to new demands. Because if one side depends a different report, the other side needs to agree to it or should agree to it. And if they don't, then you'll very quickly get to the discrepancy of it. And most of the times when we were setting up JVs, we always said whatever you provide to one parent, you have to provide to another parent. It was a rule actually written in the governance, governance process, not always followed, but that was the rule that was put in and it was exactly because of that, is that if somebody asks for data this way, the other party is allowed to see it as well. And it just kind of. Those are the dynamics of a JV that usually you don't have in other type of transactions.

You mentioned trust a couple times and that being an important driver of all of this. I'm curious about some of the factors and your approach about what develops it or even where you get to the point where that trust isn't going to get aligned and you may need to rethink even the whole initiative altogether. Can you walk me through some of those factors that really define trust for you?

I think the way I look at it, I think it becomes very personal. And the way I define trust in JV is I always look at is the person who I'm talking to looking for the best interest of the JV or are they truly, are they looking for the best interest of a parent? That's how, in my opinion, you really define the trust within the jv. If I'm always coming, you know, each one, each side will of course represent the objectives of the parent. And you can't expect that they don't. That's their job. That's why people, that's what they. Who pays the bills and why they're there. However, at the same time, the benefit of the JV really needs to be the forefront of how you're making decisions around the jv. And this comes pretty clearly very quickly in the attitude of people. Whether it's like, okay, I see what you're saying. I See your point. Therefore we can find a common solution rather than saying, well this is what I need and this is I want and not really worried about how it impacts the other side. My very simple rule was I'm going to do you a favor as long as it doesn't hurt me. You know, as long as some. If you're asking for permission to do something within the jv, I'm okay if it doesn't cause me harm. So if it causes you a lot more benefit, that's perfectly fine. But I expect the same thing from you as well next time. If I'm asking you for something that's not causing you harm and it's giving me benefit, I expect the same thing. And that's really kind of the way I very simplistically try to approach a decision making within the JV or approval process within the JV with the other side.

Yeah, that makes a lot of sense. It's interesting too, cause in some sense you're basically looking through their lens and kind of seeing where they're at. But at the same time you're trying to get a sense if they're doing the same with you and trying to get a view of through your lens, which seems to be that driver of really finding that mutual trust.

Yeah, yeah. You can't get jealous just because if the other side gets is successful, you can't hold that against them because you're trying to do the same thing for your side as long as you're not hurting each other. And that's kind of probably the key thing. And a lot of times it's like, well, I'm getting my piece, but they're getting a larger piece. Well, that's okay as long as I'm getting what I need out of the jv. Because there will be situation when it flips where you're going to be getting the larger piece and they're going to be getting the smaller piece. So you have to be fine with it.

Can you walk me through some of the strategies of developing the joint ventures and necessarily not looking for names or dates, but just some of the examples of what would really create that alignment for doing a joint venture. Or what are some of the scenarios are to think of?

Well, I mean, in my cases there were actually quite a different scenarios that we've dealt with on several JVs. One was just purely for example, around purchasing JV we needed extra volume, creative economies of scale that we couldn't get by ourselves. That was one of those strategies. The other one was a fragmented brand so we looked at how can we make sure that the brand is more aligned and we have more synergies around brand and marketing. Third side was around distribution. We had facilities, but neither side was large enough to be effective distributing the product. Therefore, combining the forces, we all of a sudden were, we're able to cover the full market with both sets of facilities and we distribute it to both sides, both dealers or distributors from each other's facilities. So there's just so many examples like that where JV really does make sense. But I think it's also very important to know that JV is not a regular company. It's created with a specific purpose, a specific objective. And if you treat it with focus, with that objective, then it's successful. If you're trying to say that JV will be cure all for all your problems within the company, that's not going to happen.

Got it. What about. Have you ever worked with any R and D or something really speculative type of joint venture?

Yeah, I mean, R&D JVs are actually quite common. And whether it's a JV or strategic partnerships and they're very. I'm afraid of them in many ways because this is where you get really into, well, they're learning more than we are or they're just taking information, what we have and it's really hard to control. You know, that's where you really need a lot of governance and you need a lot of cultural shift within the R and D organization. So how you set it up. If I were setting up today and R&D JV, I would spend more time on culture than probably on anything else. Scientists and researchers and engineers are very individuals who are very proud of their work and sharing their work is good. They like to share their work, but they also want to get a lot of credit for it. And they also want to be very protective of their work in a JV that is really difficult to achieve. They like to share, but they're also protective. So inherently they create a conflict, all of it. And I think that's really important to start setting up that culture of if we're in a jv, we're one team. Whatever we create, it's not mine versus yours, it's ours. That's where I would spend a lot of time on R&D JV, just on creating the right culture and also understanding what happens to patents and in solutions in if the JV doesn't work, who really owns that? Is it part of the JV or is part of the parent company and how does that work? I think that's really, really important to find before going into such a jv.

Could you. One other thing. Could you contrast. Because you briefly mentioned partnerships, but maybe contrast a joint venture versus partnership and a little bit of. It's just kind of framing what scenario you want to think more of a JV versus a partnership or the relationship as.

So when you have a specific, objective and specific purpose, JV is a legal or a corporate structure, legal structure to serve a specific purpose where two parties bring their assets together and share the outcome of those investments. Strategic partnerships are really about collaboration and having a separate kind of fruits of the labor, you know, and how I see it. So when you have a very specific and unique issues that you're trying to address, JV is an appropriate. If you're a little bit more ambiguous and don't really know where you want to go forward and how you want to go forward and some other type of either joint development agreement or some type of other strategic partnership is probably more appropriate for until you truly define what you are after. So that's kind of how I would differentiate it. I'm sure if there are any lawyers on the call or will be listening, they'll also have their quite a criticism about my definition, but that's how I think about it.

Okay, let's play for example, and this is also where I get free advice out of people. So say for a company like us with Deal Room, I'm interested in expanding in a new market. Let's pick Middle east, for example. But we're not capable of working with that market directly. We identified a partner that is very familiar with that market and can really develop the go to market. And our thought is because of the regulations, we want to create like a localized software. So we're going to create a separate instance of that software and contribute and say, hey, we're going to create a localized version of the software so people know the data is localized and everything. And really look at this as a whole separate thing. Now would we still. And from your view, am I still looking at that as a partnership or do we split it off and look at as a joint venture, as a completely separate entity that is operating locally in that market?

Well, I think what I would first ask myself is what am I trying to achieve within that market? What is my appetite for sharing risks in the market and what is my trust with the partner as well as how much control I want to have over it? If you're willing to share the risk for the control, then I would Definitely approach it with a joint venture. If you want to do more of a strategic partnership or if you are not comfortable with the risks and you're okay with giving control to somebody else, then go with a strategic partnership because you cannot control what the other partner does if it's not within a legal entity and you don't share the rewards of that legal entity either. With strategic partnership, you can say this is my transfer price to you or this is how much I want to get paid for it. What you do after that, you are responsible for it. With joint venture, you will have a lot more say and a lot more responsibility for whatever happens in that particular market. Now you can protect yourself a lot more with partnerships. Once you hand it over, you really have a limited. You know, there's some rules that you hope that the other side will abide by. But with the jv, you should have a lot more control over what happens with area with that market.

And it sounds like it's a longer term scope when thinking about a jv.

Yeah.

Would it make sense to frame things as a partnership initially and then potentially look at evolving it into a JV or.

Absolutely. I mean we've just. We had an example where we were planning to go with the JV in a particular market for a pilot. Once we kind of consulted, we said, you know what, we're not ready for the jv. Let's start with a partnership or we call the joint development agreement and once we develop, we're modeling the pilot, then we're going to put in our assets and go from with the jv. So that's, that was, I think that was the right approach.

Cool.

Even though I wanted to put a check mark, another JV next to my name, but it wasn't the right decision.

You got your counts, your stripes, you want to get. That's awesome.

Exactly. I know I walked away with a small stripe, but it was the right one.

Ivan, what's the craziest thing have you seen in M and A?

You know, there's a lot of crazy stuff that happens at like five o' clock in the morning, you know. But I think the craziest one that I've always. I can't go around it is we were, we were negotiating a deal and it started as a divestiture. Then he was like, well, why don't we do jv? And like, no, no, let's not do that. And it was with Titan International and there's CEO who some of you may know is Maury Taylor. We're doing a Deal in France. And in middle of the process, as we're trying to negotiate with everybody, he sends a letter to the French Minister of Industry in France calling, the French workforce gets paid high wages but doesn't work. Works only three hours. They don't know what they are doing. They talk for three. They don't work. They have no idea of anybody. Would be just crazy to go to France. That was kind of paraphrasing and we got so much backlash in the middle of it. It was just insane. The amount of politicians that had to get involved, so much firefighting around it. It was just, it was epic. It was epic. And I think he made a name for himself and it was just one of those things that he just. You can't believe that in the middle of a process something like that happens and you still have to go through it.

What was the point? So that was just something he did that wasn't even material to the deal?

No, no, it was just something he did. He just pulled out all the French unions and all the French politicians and I mean, we had a front page press, you know, about correspondence between the two countries and him and the French government in the middle of the negotiations.

When a leader just decides to go on a political war streak.

That's exactly right.

What was the craziest thing you saw in 5:00am?

Oh, I think when we had to realize that if we want to close that day, we had to completely redo the balance sheet and the financial statements on it and it had to be done by noon in order to get the deal done. That was really something else as well. And it was really around two negotiators agreeing to something that legally was not able to agree to. So it was either going back on the agreement or completely redoing all the paperwork to get it done. Fortunately, we found a solution for it in a different way. But it was really something it came out of. Like got a call at 5 o' clock in the morning, like, this is what happened, this is what we had to do. I'm like, oh no. Like we will never get again. So it was just one of those highs in the deal that you just kind of work through it and later on looking, it's like, I cannot believe.

That there's a lot of that in M and A. I feel like that could be its own series. The crazy 5am moments.

It was a moment when I had to call my two bosses above and be like, I'm sorry, but this is just not going to work. And he's like, are you sure? I'm like, yes. It's like, I wouldn't call you at 5am telling you it's not gonna work. And he was like, okay, I got it. We'll have to do something different. But it was also a good trust builder as well. Because I usually don't do that. I'm usually kind of like, yeah, whenever you throw it, it will make it happen. That required a call. It's not gonna work.

Awesome. Ivan. Hey, I appreciate your time and learning from you today.

Hey, thank you so much. Anytime. And anybody who's listening, feel free to reach out. We'll be happy to chat.

Yeah, we'll make a point to put your contacts all over the web so people can find you.

Good.

Thank you. Thanks, Ivan.

Thanks.

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