Finding the Right Business Partner with Roland Frasier and Ryan Deiss

Coming up next on Business Lunch, I've.

Had the benefit in practicing law of seeing hundreds, if not thousands of people come through doing partnerships and putting companies together and things like that. Let's start a business. And I had kind of a similar thing that I would tell them all, which was why I thought they should do a partnership agreement, because expectations are very, very hard to pin down if you don't write them down. And so I'd say, yes, a history of successful partnerships is a great indicator, and a history of unsuccessful partnerships, particularly litigation, is a very good indicator that they're not going to be a good partner person. And to me, somebody that's a heavy, that's been in a lot of litigation or will tell you all the reasons that the people that they were in business before didn't work out are not going to ever be good partners.

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You'Re listening to Business Lunch with Roland Fraser. This is your seat at the table.

Hey, business central listeners. If you want to scale your business, you have to know what's working and what's broken. And to date, Ryan and roland have started 13 companies from scratch. They've funded a dozen more and more and directly Advise hundreds of CEOs and entrepreneurs on how to grow and scale their companies. And over the years, they've identified the eight key domains that allow a business to scale to eight figures and beyond. And they use those eight areas to help entrepreneurs and CEOs find their current strengths and weaknesses and understand the constraints that are getting in the way of them scaling. So if you want a quick and accurate look at what areas you can improve to scale your business faster, go and take our scalability assessment. It's an assessment that'll show you exactly where you need to focus to scale your business and achieve even your loftiest goals. In just five minutes, you'll know your exact scale constraints and you'll get instant, actionable steps on how to improve your business. So go to businesslunchpodcast.comScore to take the free assessment one more time. It's businesslunchpodcast.comScore.

Hey, everybody. Welcome to an episode of Business Launch with Ryan Deiss and Roland Frazier. Ryan, what? What's happening?

Yeah, it's been a while. Like we were a little bit busy there and traveling. So it's good to be back talking, sharing some ideas.

And this is the benefit of having episodes that are stored up so they.

Don'T know that it's been. But it's only been a while for us. It hasn't been a while for In Podcastlandia, we didn't take a break at all. At no point did we. But now, I mean, it's been cool, obviously, since we last got together and did one, did a show. We. We've had a lot going on. We've done strategic planning. I know I've finally been getting out. Like, I'm forcing myself to get out and do masterminds. You know me, I'm a bit of a. Of an introvert, but I'm really forcing myself to get out there and do a little bit more kind of networking, so.

Which is odd, because you don't do that when there's no pandemic.

Yeah, no, I mean, and truly, like, I will admit, post, like, I was an introvert going into Covid, and. And I think that sort of 18 months of kind of quarantine, it, like, only enhanced my social anxiety. Like, not even kidding. Like, I go out now. I go to, like, my kids games, and there's all these people there, and nobody knows or gives a crap who I am. It's not like anybody's trying to talk to me, but I just. I feel this, like, weight, and I don't believe it rises to the level of needing therapy or medication. I just need to get out again. And so. Yeah, so you're forcing yourself. I am literally forcing myself out of my comfort. Comfort zone, which is my cozy house.

And so my wife said that this was the best thing that's ever happened to her because she would be happy to stay in, not only in the house, but in a single room for the entirety of the rest of her life. And I personally am going crazy. I have. We have a wonderful place, which I'm super grateful for. But dag on, man. It's like, I get. I miss travel, so I miss travel a lot.

I miss travel. I miss going to places. My problem is less with. With leaving and more with the fact that wherever I go, there's other humans there who want to stab me and sell me.

Is it just all humans or is it only humans that are interested in talking about.

Yeah, so that's the problem, is it's got to be, like, all humans, right? It's got to be. I sense it. So, I mean, you know this. Like, I would struggle at events, like, where there's a lot of people there. Like, it's just energy draining for me, and it's not. I joke around about not liking people. I actually do like people. I like helping people. I enjoy answering questions. It just is very draining. It is now expanded to humanity at Large. And that's when I realized this is not a good thing. So yeah, I'm ready to get back out. And so I've got something kind of a cool realization that I had from one of my attempts at self. Self therapy that I think would be good to talk about in terms of what does it mean to be a partner person? Not a partner person. How to know if you are, if you are not. And really how to make sure that if you're going to be in partnership with somebody that you're doing that with. A partner person I'd like to talk about. But I think you had a conversation more even. I don't know if it's necessarily more interesting, but that I think would be more relevant, even more folks. And it's this idea of bootstrapping a business versus raising capital and kind of how to think about that because I know you were doing a consulting session and somebody had that kind of dialogue. So I'd like to hear more about that because I was. That was pretty cool. Maybe give the backstory.

Yeah, so that is exactly it. You basically gave it. I do a decent amount of consulting, not a horribly large amount. I'm trying to do less of it for higher quality folks always. But in one of the sessions I had, I've got.

Was the session that you're referencing low quality person that you don't want to do any more of.

Yeah, yeah. I mean, and he knows the. But, but what happened was. And it goes like this a lot in those sess when somebody's in the process of looking at new opportunities and we're going through and saying this is something that makes sense, this isn't, then it's okay, well how does this start? And the question most often is, well, how does the funding come for this? What's the budget? What does it look like? What is the cost in terms of time and people and resources to make this thing go. And so we talk about that and set the budget well now then the next decision. And always start with the budget, by the way. Right. So that you, you don't just, yeah, we're going dive in and who knows how much it's going to cost. Start with the budget. But once you have that, it's like, okay, well where does that come from? And so the choices really are, are you going to self fund? That can be also called bootstrapping or are you going to let the company fund itself? Which is true bootstrapping. Because I think one of the things that we kid ourselves with a lot is that Bootstrapping means we just continue to invest our savings until the thing goes or doesn't go, and we don't really have an idea of how much we're going to do. And we're literally funding the company ourselves. So we are making an investment which is very often not even thought of. Right. It's just like, oh, turns out we've spent. Actually, we had this happen with software, right? Turns out we spent a whole pile of money on this and. And we didn't have a budget.

I've got a buddy of mine that calls that not rich uncle bootstrapping. So it's not true. It's not true bootstrapping. What it is, is you got the rich uncle who's your investor, and they're just fun to get into a black hole. The problem is, is that you're both the idiot investor and you're the entrepreneur. So I do think that that is a really good distinction. Boot. Just because you're bootstrapping it doesn't mean that you're just funding it indefinitely out of your own pocket. Make them say, like, that's a funded company, it's just funded by you. Bootstrapping is funded by the customer.

Right.

That's a great distinction.

So that's the first. Yeah, so that's the first thing is, am I funding it myself and if so, what's my investment going to be? Then? The second option would be to say it's going to be truly bootstrapped. Which means that really, from the get go, those people that you say, I think Sarah Blakely just sold a bit of Spanx to Blackstone at a $1.2 billion valuation. And she started with, I think it said $5,000 that she saved from selling faxes. That is a bootstrap company. It was funded, but I mean, very, very minimal funding. I'd say if we're under 10, $15,000, we were really thinking about that. The company is going to pay for itself as it goes along. So that's a true bootstrap. Then you've got funded. Funded, meaning that you're going out and you're getting money from somebody else that's not you, which could be rich uncle. It might, unfortunately for lots of families, it's friends and families, and that's not really terribly well thought out. And then that money disappears. And again, because there's no budget, because you're just saying, Well, I need $100,000 to go out and do this, or we need this money to buy inventory and then it just disappears with no mechanism for ever recovering or accounting for it. And then there's actual institutional funding, which I would say goes out to anything from angel investors to growth capital, those type of people, venture capitalists. And so the question is, and there are actually one. One other way that I really. Two other ways that are really cool to fund a company. One is a franchise, which is where you have units that you sell, usually for specific territories, but doesn't have to be. And there's an investment that's made by a third party that's going to use your branding and your systems and your operations, and then they're going to effectively incur the cost of funding each new expansion. And then you've got licensing, where you would do a similar thing to franchising, where you would get a fee from somebody to take your stuff out to the world. And all of those things are different ways that you can get funded. I would say those are the primary ways. We've got, I think 159 in our, in our funding strategy thing that we have. But, but that's really the thing to think about. So we started talking about it and he was like, yeah, you know, I just, I, I don't know what the investment is going to be. And well, to me, I prefer, I prefer to have a plan that self funds relatively quickly. So I'm a big fan of bootstrapping and I know you are too. And so I think it's just important to have the thought about that when you get going. So he would, he was, well, what do we do? Where does this come from? Was the first question to get started. How much are we willing to commit? And then at what point do we say this is going to make or break? So what are your thoughts on that? I think I believe you to be more of a bootstrap person. Although we've talked about funding things.

Yeah, I certainly. It terrifies me to raise money for an unproven idea more because I'm always afraid of losing somebody else's money. Right. And I will be horribly irresponsible with my own money. As you know, unfortunately, if it's my money, I'll be. Or even my companies, which is not fair. Right. You got business partners, like that's not good. But I'll be like, no, no, it's going to work out and be very, very aggressive. But when it's somebody else's money who's a passive investor, I'm almost too conservative. And when it's not mine, I'm not conservative enough. So I think it's important to know who you are in that. Like, are you more of a saver? Like when it's, when it's other folks, are you more kind of of a, of a spender and keep that aspect of it in mind and, and realize that neither of those can, are necessarily a bad thing. It doesn't, it doesn't mean that you don't get to be an entrepreneur if you're one of the other. You just need to know where kind of your default settings are in your biases and make sure that you're accounting for those. But I think the bigger point is the one that you said. So many people say, I've got this idea, how should I go about raising money? And that shouldn't be the first question. The first question is how much do we need to really test this thing to make sure that we've got an idea here? And depending on what you're doing and the type of business that you're running, it could be very little or nothing. I mean, if you're doing a pharmaceutical kind of thing where you're trying to invent a drug, it's going to be a lot. But most of us, even if it's software, right, which could have a really significant development chunk, you first need to validate. Will somebody pay me to do this service? Right. So if you think about what is SaaS, SaaS is software as a service. If you think about what are most of your books and courses and you know, coaching type programs, right? That is service at scale, even a lot of your physical products, there is a particular end result that somebody is essentially hiring your, that, that product that you want to create to do. So I would always say before you do anything, figure out does somebody even want that end result and are they willing to pay you to do it for them? Because if they're not willing to pay you to do it for them, then there's a really good chance that they're not going to invest in a separate solution to go and do that. And so that's what you gotta figure out before anything is do we absolutely know that somebody wants the thing that we're offering and that we can fulfill it? And I would just encourage you, make sure you can answer yes to both of those questions. Yes, they want it. Yes, you can deliver before you raise a penny or before you put a lot of your own money into it.

And I think there's a lot of ways to go about doing that. I know the hardest advice that I ever heard for the longest time when I was Like I want to do something, I want to have business was find a need and fill it. And I'm like, but they're. All the needs are filled, but they're not right. You find out as you initially when you're going into business it's like, well, they've already thought of everything. Like the guy at the patent office that the rumors was that well, everything's been invented so we're shutting down the patent office. Well, and that was like in the 1700s. So. So as far as how can you test, there's. There's something called dry testing which is where you effectively post your offer and post it for sale. You can do it as like for a waiting list. You see a lot of companies, Tesla started out that way. I think phone companies, Gmail started out that way. Where you have to get an invite. A lot of, lot of clubhouse, I think was like that more recently. But that, that's testing demand, which is, which is interesting. It's not testing purchasing though. And so I think that's an important thing to think about. If you're going to dry test. Can you test a purchase as opposed to are you interested? Would you like this? There's a big difference. If you're going around asking your friends would you buy this? And they're like, absolutely. Got a great idea. They don't give you an honest answer. The honest answer is the market that's going to have somebody pulling out their wallet and paying for it. So whether it's running ads and, and testing that and then refunding the money or a pre selling, which is great, there's lots of ways to do that.

From you can do an authorized capture. I know something we used to do in the past where it would authorize somebody's card, but it wouldn't actually. And you can set this up in your, in most merchant accounts, I think stripe allows you to do it as well where it authorizes the amount it looks like it went through but you didn't actually capture. And then you can send them to the, to the other page. I mean, heck, I just tried to buy concert tickets for Garth Brooks and went through the whole purchase process and it was like, nope, sold out. But it wasn't until I got to the other side that I found out that they were, you know, sold out. So yeah, you can do those kind of things. Definitely. I don't want anybody to hear, sell something you don't have. Take the money because that's called stealing. Even if you intend at some point to deliver on it. If you don't have the relative immediate capacity to deliver on it, you don't disclose. I'm pretty sure that's fraud.

But the other, I'm pretty sure it is the other things you can do. Like we started a multi million dollar profit, multi million dollar profit company at the beginning of the pandemic, and that was started just off of our list. If you don't have a list of people to start with, obviously we're big on own your own media, which is a whole separate discussion that we should talk about at some point. But, but if you've got your, if you've got a list or if you could partner with someone who has a list, then that's a great way for you to launch as well and test demand and also kind of dial things in to be sure that you've got the best thing. We did that with our epic challenge, started that with, I think it was, we invested $9,700 in ads the first time and immediately proved up, I think it was $860,000 in sales that came from that investment. That was pretty cool. And that's continued on to now, our 17th one that we're in the process of doing today.

Also advertising and email me like in you talked about if you have your own list, great. If you don't look to partner with them. I know when I was getting started, I would pay 100% commissions to folks because I needed the data, right? And so it's like anything you sell, you get 100% of it. I need the data, I get the customers. I've got no risk. And the other thing that I would do is go to people who had email lists and I would say, how much to advertise to your list to get a dedicated email to your list. It'll be written by you. I can give you the copy. How much to drop an email to the list? You'd be surprised how many people say, I don't know. And you'd be like, will you do it for a thousand bucks? Like, sure. I remember I did that for the first time for $500 and made like a thousand dollars in sales. And that was great. Kept doing it. And then eventually I thought I was so smart, I went around and got the person to shift from being, from selling the ads to being an affiliate. And I wound up actually paying them a lot more in affiliate commissions as a percentage than what I was, you know, paying when I was just an advertiser. So don't think about. And again, in the beginning, it's not about necessarily getting an roi. And so and here's the other thing I'll say when you're testing this stuff out, don't think about scalability. We say like get, sell and serve 10. Like sell and serve 10, sell 10. Make sure that they're happy at the end because just because you could sell them if they're not happy after the fact, you still don't actually have it figured out. Right. You know, people will buy it, you just can't fulfill it. So you got to get both of those things.

Yeah. And as far as having to have money, affiliates are a great way to go. I know when one of the actually I think it may have been the first thing that you and I did as business partners as a joint venture was a product launch where you had digital marketer and a big list and I had an offer and we talked about joint venturing that and I ended up partnering with 36 different people on that where they all had already media. And I had an offer and it wasn't my offer but it ultimately turned into a business for me that was a coaching business for people who wanted to do local marketing. So that that was like $0 out of my pocket to get going and it was beneficial because I paid a whole bunch of money to you and Perry and Rich and I made money and then we ultimately ended up becoming partners. So I think there's a lot of which which kind of segues nicely because I think we've covered the, the idea behind this. It segues into the partner. Partner, no partner discussion. But whatever you're doing, I think you've got to have a budget. When you're thinking about this new thing that you want to do even if it's a new profit center for an existing business and you have to decide what is the point at which you're going to make a decision that this is working or not working. I would argue that it needs to be self funding pretty quickly for almost every business with the exception of you mentioned pharmaceuticals or something like that. There are, you know if you're doing.

Like really complex like consumer hardware, you know, I mean there's, there's certain things where. But even then like there's Kickstarter. I mean there's so many indiegogo. Like there's so many ways to test these ideas and to use pre selling it is, it is truly I think the days of going out and raising a bunch of of capital at the seed state you just don't need to do it right. And the longer you can push off having to go outside of your own customer base, your own company, your own self funding efforts, just the better off that you're, that you're going to be in terms of being able to maintain that optionality, maintain as much equity, keep the cap table clean. So I think raising capital should be. There's lots of people who believe it's like a bad thing to go the VC route or the angel route or something like that. I don't think that it's necessarily bad or that the people doing those things are bad people. I do think that it's like debt, it should be a last option, like you should try to do everything else and when that's the only thing you got and even then you should do it with the spirit of confidence saying like I'm doing this because I know that if we put this much in, it's going to return this much because look at the data, look at the proof that we have. And if you can't say that, don't take somebody else's money. And if you can't say that and you're like me, don't put your own money into it because what else could you be putting that into?

And remember, it's the most expensive money that you'll ever get, that initial VC venture capital money, angel money money that is before you've got your proven product and you're out there able to prove that the company can be profitable and sustain itself. It's the most expensive money that you'll ever raise. So not that it hasn't worked for a few people, it's obviously worked well for Jeff Bezos and lots of other people. Warren Buffett, right? Big, big, big names that we know. But I think your, your chances of being one of those people, those unicorn people, they call them unicorns for a reason. And so if you can start and get to MVP and have a budget that gets you to your minimum viable product, test whether there's demand, actual people willing to spend on that and then let yourself make the decision of how can I bootstrap this? I think that it's a, if everybody did that, we'd have a lot less people losing money as investors and a lot more wealthy entrepreneurs that didn't give up a whole lot of their company or control or have a lot of extra people that are having to, they're having to justify decisions with because they.

So the guy you were consulting with, what did he ultimately decide? Can you say, yeah, bootstrap. And so going to go out and sell just Going to, going to sell it, get some customers. Funnel that, funnel that back in.

Yeah. What we're actually doing is, is we're doing a no money acquisition of an existing franchise that needs help. He provides coaching services to franchise of big, big, big franchisors and all of the top, like many, many, many of the top franchisees, the people who bought the franchise for that he provides his software and systems to are the top franchisees across the board in the category that he's in. So the conversation was, where do I go? How do I build true wealth? And so my answer is always, well, stop making, stop building wealth for other people and start building it for yourself. And then I was like, okay, well how do I do that? Well, you already provide this tremendously valuable service that's proven across multiple, multiple sub verticals within this particular niche. So if you're able to do that, why not do your own? Well, I don't want, it scares me to have all the hassles and stuff of a startup. Very smart. I love that. So why don't we acquire someone who does not yet have the benefit of the skills that you've got, the franchisor, the company that's actually selling the franchise to people and then we can take your systems, apply that to the thing that we acquire and then go sell franchises. And we don't need any money because we're going to do a no money out of pocket acquisition where the acquisition of the franchise, the existing franchise company is done with no money out of pocket. Then we bring all of the skills and such that he's got to the table and all those systems and then we go to the franchise network of all the franchisees because franchise as you know, like we had Magic Johnson at our, at our traffic and conversion summit. We've got Emmett Smith coming at our, our one that's coming up here for scalable impact live. And those guys invest in franchises and own lots of different franchises. Might be Starbucks, it might be a theater chain, it might be a bunch of things. So one person who's had success owning a franchise is very likely to buy a different one that's similar. And particularly if the person that has helped them be the number one or two or five franchisee in the chain is opening their own franchise, that's an easy sale. So we're really leveraging the customer base that he's already built the franchise funding mechanism so that we can open hundreds of locations with other people's money, but on a concept that is already proven because we acquire an Existing franchise for no money out of pocket. And we're not having to raise any money because it's all self funding. So that's kind of fun. Like when you, all those pieces start to come together, it gets pretty exciting.

It's definitely, it's definitely a shortcut. And the idea of the acquisition making it easier to raise the capital from, in this case franchise franchisees as opposed to outside, which is great because there's.

No equity loss, right. You sell a franchise, they didn't get equity in your company, they got a location, which is awesome. It's kind of a like a business within a business. Inception. Inception investing, that's what you call that. So we, I mentioned that's, that's like some partner deals going on there. And you were talking about going to a Mastermind recently where you guys had a conversation about partners, partner people versus no partner people. And I know it's a conversation we've had several times because we've been involved with really smart people that we love who are great at business, who just aren't partner people. And those as much as you like the people and as much as you want them to work out, they just don't. What was the discussion like at the Mastermind?

It was similar, I think to the discussion that you were having during the consulting session where the guy that it was his turn, he was going around and it was clear to me and a number of other people in the room that the solution to some of his constraints were he likely needed to either do a strategic acquisition or bring in a business partner to do critical functions of the business that he didn't want to do. Like it wasn't the kind of thing that you're simply going to just be able to hire somebody to do. It was like launching an, an entirely new division within the company that would be strategically really important, really critical for where this person wanted to go. Right. Almost like a vertical integration kind of kind of concept. But he had no business running what would effectively be a separate business. And, and so people are like, well maybe you acquire. And he's like, ah, but then to acquire them I might have to give him a piece of the core business. And then I got a partner in this one. I was like, well maybe you have somebody come in, they don't, you don't buy an existing. But you bring somebody in as a co founder for this new business, you wouldn't necessarily have to give them a piece of the exist cause you're not contributing that. And it was just clear like all of These ideas that highly, highly resistant and kept coming around to can I just hire somebody to do this? And the answer so far had been no. Like, he just had attempted to hire a number of people. And given that it was a startup and usually it's very hard to hire somebody to launch the new. Right. There are startup people and there are people that can run. And usually if it's a startup person, they're not an employee. There are exceptions. But in general, if you're going to start something from scratch, you need an entrepreneurial type person. And entrepreneurs just usually aren't going to take a job. So that's what we kept coming back to. And it was just clear there was so much resistance. So I just, I kind of paused, like, hey, can we, can we pause for a second? And I asked this person, I said, let me, let me ask you this. Do you consider yourself a partner person or are you not a partner? And he's like, huh, I've never really thought about that, thought about it like that before, which I hadn't either until you mentioned it to me years ago. And he said, but now think about it. I guess I'm not a partner person. I've never really had business partners. And even kind of some of the times I have, it didn't really work out. They didn't really last. And where the discussion went to is, what does it mean to be a partner person? And if you're not a partner person, can you become one? And so I kind of wanted to ask you, like, because we've identified this before in folks where, and in a couple cases, like you said, too late, where we kind of got in business with somebody and we like them and we can hang out with them, we're friends, but it was clear that they weren't really into it for the partnership. It's sort of like falling in love and realizing that the person that you're going to marry, they want kids and you don't, or vice versa. Right? This is one of the things you kind of got to get figured out before you get in business. So I was just going to ask you because I didn't have a great answer. How can you tell if someone is a partner person or not, aside from the fact that they've been in successful partnership deals in the past? And also, like, if I'm a listener right now, how do I know that I'm a partner person? And then do you believe it's possible for somebody to make the shift if they're not a partner person, into being a Partner person. Let's maybe wrap and take that one. You know, last. But what are signs that somebody is a partner person or not?

Yeah, it's kind of, kind of cool because I've had the benefit in practicing law of seeing hundreds, if not thousands of people come through doing partnerships and putting companies together and things like that. Let's start a business. And, and I would, I had kind of a similar thing that I would tell them all, which was why I thought they should do a partnership agreement, because expectations are very, very hard to pin down if you don't write them down. And so I'd say yes, a history of successful partnerships is a great indicator and a history of unsuccessful partnerships, particularly litigation, and is a very good indicator that they're not going to be a good partner person. And to me, somebody that's a heavy, that's been in a lot of litigation or will tell you all the reasons that the people that they were in business before didn't work out are not going to ever be good partners.

So let's, let's, let's keep a list because that's great. So number one, and this could be like, not only are they not a partner person, but perhaps they're like a toxic partner person is if they've been and certainly people have been like, deals go bad, lawsuits happen. We ain't here to judge. But if you see a pattern of they've literally sued or been sued by every person they've been in business with, that's probably not, not a, not a deal. But, but the other one that I heard you say was you had the lawsuit. But oh, if you find that they are always talking crap about other people that they've been in business with, that's a biggie. And we've noticed this as well. And when we're interviewing for employees, if they talk crap about their former employer, that's not good sign. Even if that wasn't a good, you know, good people are going to take some ownership. I would say good partner people are going to see if a deal went bad, they're going to see where they own a piece of that. They're not going to put all the blame there. So, okay, so that's kind of one. What's another one?

Yeah. And then going from there. I think it's, it's, it's really something that we talked about a long time ago. I don't remember when, when we, what program it was we were developing, but it's smaller piece of a bigger pie thinking and because that's Something that I see that probably kills more partnerships than anything else is that the, the people, when you go in, you have to, you have to believe that together you're going to be better and bigger than you would be independently. So the sum of the whole, like the sum of that whole has to.

Be greater than one plus one's got to be three.

And if that's not, it does and it makes sense. And if not, it's not. Maybe in that case, like, do I think somebody could change? Is a really good question. Because I think that given the right circumstances that most people could be partner people, but they don't maybe know how to do it. Just like I think that the serial dater can become a great partner in a relationship or a marriage if they have the right person. But if they don't have the right person, then it might be hard for them to change their ways, Right? So I think it's being conscious of creating a situation where a partnership can succeed. One of the key things, as we all know, is communication, like really honest communication. And so if you don't have somebody who, when you're talking with them, can be aware of their faults and tell you, here's some of the challenges that you might have with me as a partner. If they can't say that and give you some, then I think you're dealing with somebody who's either a narcissist on the far side or just really going to be hard to get self awareness because they're going to be.

That's what you're, you're looking for somebody with some gen. With some solid self awareness. Like, here are the ways in which you might piss me off and I might piss you off.

And ownership.

Yeah, right.

You got it. You have to be aware. And you could be aware. Well, I'm just, I always spend too much. That's me. That's what they always say. I'm aware of that. But then it doesn't affect anything. You have to go and say, I have to own that I'm aware and I need to own my part of what we're going to do to deal with that. Right. Maybe it's a budget thing, right? If we have somebody in a company that's spending too much money, then we have to say, okay, we got to talk about budgets or something like that. And I think that's really important. And then the other thing would be that they have a very specific set of skills and that's the key core requirement. But then contextually, the situation that you're Going to partner on allows a clear division of effort around those skills and responsibilities. So you're good at marketing and I'm good at money. Then that's a good partnership. But you're a good copywriter. I'm a good copywriter and our other two partners are good copywriters. I mean, that could be a challenge because we're all excellent at what we do. But we're going to have different thoughts, which I think is kind of the original Ryan and Perry relationship, right? That you guys are both brilliant, but you have very similar skill sets in very different ways.

Yeah, it does. And so I think what it comes down to is because like you can have two partner people who, it still is a bad partnership for that reason, right? Where you don't have like, you don't have complimentary skills. So I mean, those are reasons that two partner people could, could fall out for, for that reason. But I, but I think the point, like what I picked up on that I think is important and what I'd like to highlight is it requires that you be self aware of your strengths and your weaknesses. You want to look for self awareness of the strengths and the weaknesses in the other person to see if they're a partner person. But the other piece that needs to be added to it is seeing value in somebody else's strengths where there are weaknesses in yours. And what I've seen with a lot of people who aren't partner people is they tend to devalue or not feel like it's as important to be really good at the areas that they're weak. Right? So because I've also seen folks who aren't good partner people are like, I can do everything, I don't need anybody else. Right? Okay, well that's delusional, right? Because nobody is. But I have seen it before and that's what I saw in this person. It's. They believe that the thing that they're really great at is, is the thing. And that that is the only thing, right? And that the stuff that they're not good at is also critical. Like, so when you get into business, like there are certain business functions that are just absolutely critical. Some of those functions you can hire for, but some of them depending on how critical they are. In the startup days, it's brutally difficult to hire for and you've got to decide if you want to take all of that on in the beginning or if you want to bring on, bring on a partner. But it's essential that you see that person's skill set. As being equally valuable or at least from a pro rata perspective in terms of how the partnership. Because it doesn't mean it has to be a 5050 partnership, but you need to at least see value in their thing because if all you're doing, even if you bring them on like a partner is treat them like an employee, that deal is going to go bad.

Hey, business hunch listeners, we're going to get right back to the show, but Roland wanted me to invite you to a brand new training that he's doing on acquiring businesses with no money out of pocket. It's something that he's talked quite a bit about on the show, but he's doing a free training where he's going to walk through the entire process. So if you want to get access to that, go to businesslunchpodcast.com EPIC. That's businesslunchpodcast.com Epic. And you can get signed up.

Yep. Well, I was. So are there any other things that you would look for in like partners? So we talked about self awareness. We talked about there not being kind of a pile of dead bodies in their wake. Asking that question, which we've asked many times, are you okay with a smaller piece of a bigger pie? Right. Asking that question directly and then watching for their initial thing and saying, like, if we do this, you're not going to own all of it. We may even need to bring some other folks on. You won't even own the majority of it. Are you okay with that? And look for the hesitation and did they throw up a little bit in their mouth? Because it'll almost be involuntary for the folks that aren't. It doesn't mean it's a deal killer. But like that acknowledgement of that. Yeah. Self awareness, seeing value in other people's things, being complimentary. So this is going to manifest itself in like, oh yeah, people who are really good at this. And I'm not. Like, that's important. We need to have that. So you want to hear that using us stuff as opposed to me when telling stories.

That's one that's really frustrating when you're in a partnership and somebody's me, me, me all the time. And that's. It's a really good indicator when you're talking with them about other things they've done in the past where they're not taking 100% credit for everything. They're like, man, it was me and a great team.

Yeah, you want to listen for a lot of us and a lot of we have here a lot of Me in an I maybe a good thing, you know, indicator that they're not a partner person. Was there anything else? Certainly if you were to go back from to your attorney days where you'd look at it and you go, this thing is not going to go well. This deal's going to blow up.

It's conflict resolution. Conflict resolution. So how do they deal with conflict and how do they resolve it? What does that look like? For me, the easy thing there is I like partnering with people who have very long term relationships. So even if it's just with their parents or friends from school or something like that. But long term relationships are always going to require a few things. They're going to require you to get past the challenges that you will inevitably have. They're going to require you to be comfortable with people who don't think exactly like you. Maybe all your friends think a lot like you. But if you have them for 10 years plus, they're going to be some things that you disagree on. They're going to be some things that you have to work through. And so I think that's a really good indicator of if, particularly if they're business relationships. But even just personal relationships, somebody that doesn't have any friends and doesn't have any long term relationships is going to be a difficult person to be a partner with. Doesn't mean it's impossible, but that is definitely something that I look at a lot and it will be indicative of their ability to resolve conflict, which is the ultimate thing that you want in a partner because they'll have had. The only way that you get to have long relationships is to be able to resolve the conflicts that come up. And also it requires some level of proactivity to have multiple long term relationships. Like if you were never the person that reaches out, then you would not have any long term relationships or you'd have very few because they require both sides to put forth effort. So I think those are two really important things as well.

I love that just that framework of do they have those long term relationships? Because if they don't, you're right. I mean, if they're out there in the world, it's not because they're just a complete introvert and doesn't want to have anything to do with humans. Right. If they're out in the world and they don't have long term relationships, it suggests that their tendency is to run at the first sign of trouble as opposed to kind of like leaning into it. I know an advice, if I give like a toast At a wedding, my advice is always like, go to bed angry. Right? Go to bed angry. Because it suggests that if you're angry and you're upset and then you go to bed, it's like, I'm mad, you're mad. But you know what? We're going to go to bed because tomorrow we're going to be right here again and we're going to work it out. And if we don't have it worked out then, then we're going to go to bed and we're going to try again the next day. Like, that's what I believe makes for a healthy marriage. Not putting some arbitrary. If we don't get this worked out tonight, then I guess we're through. No, what it means is like, right, we got this. And business partnerships aren't necessarily designed to last a lifetime. But if you see somebody who they clearly have a pattern of running at the first sign of difficulty and then after the fact, all they do is talk about how all these bad things that happen that suggests that the person that you're dealing with is not a partner person. Now, good time to look in the mirror. Right? Based on some of these standards, what does that suggest about you? Right? Are you a partnership person or not? And I think if you're not, that's okay. Lots of people have.

It's good to know because you're going to be way happier, you're going to be miserable. I mean, we know this because we've partnered with non partner people who we love and are good friends of ours who are absolutely miserable being in a partnership. And it was clear when we were in partnership with them, even though we were making money, that they were just never going to be happy. And it doesn't mean they're bad or evil. It just means.

And it doesn't mean they can't change. I'll tell you. So one other person who was in that room, somebody, I don't think he would mind if we mentioned my name, Tucker Max, right. Who owns Scribe Scribe Media, which is a publishing company.

Who.

We were partners with him. And when I was.

I'm still an advisor.

I'm sorry. Yeah, and still an advisor.

I said, I'm an advisor.

Ultimately, the reason that we got out of the partnership and this was like a decade ago was because. And I turned to him, I was like, dude, you were not a partner person and yet now you have a business partner and you gave up large chunks to do that? He said, yeah, I had to learn a lot of hard lessons. I kept stubbing my toe and realizing that I couldn't do it all. And so I had to humble and realize. And ultimately I learned to be a partner person, and that's made all the difference. And so I would encourage you, if you find that you're a part. If you are a partner person. Like, I'm not just a partner person. I'm freaking codependent. Like, I've never not had a partner. So if you find that you're a partner person, make sure you're partnering with other partner people. Hopefully we gave you a framework for doing that. If you're resistant to it, I would encourage you to look at all the successful partnerships that are out there and realize that it really is more fun. And if you want to change, like, if you don't, that's fine. But if you want to, I will simply say, if Tucker could do it, if you know Tucker, you know this, if Tucker could do it, you could do it. Even if it. Even if it takes some time. I think it starts with acknowledging where your strengths are, acknowledging where your weaknesses are, and looking for people who are really great at the things you're not great at and just complimenting them. Like, just start with kind of this.

Got two things, two things. One on Tucker is. Is since you're listening to the Business Lunch or watching the Business Lunch episode, you should podcast. You should listen to the episode where I interviewed Tucker, because he talks about making a conscious decision. Like, if you read Tucker's books, he's a absolute crazy, womanizing type person. And he finally decided that he wanted to attract a partner. And he went to therapy, and he's gone through a lot of therapy to help him get in touch with himself and work through all these things. And the therapist said, well, if you're in a room with describe your ideal woman. And he did. And then they whittled it down to, that's a unicorn. That is a unicorn's. Unicorn's unicorn that doesn't exist. So let's talk about what are the things that are most important? And they did that through conscious. And you guys could do this with your partnership as well, with your business partnership. What does the ideal dream partner look like? And then what are the core things that are absolutely essential that you have because chances are the dream one doesn't exist or is going to take you forever to find. So then he said. She said to him, what kind of person do you have to be? Would she. This woman that you've described, would that woman be attracted to you? And he was like, well, of Course I'm awesome. And then she's like, really? Would this person. He's like, well. And so they identified the kind of person he would have to be to attract the ideal partner for him. And that's something that we should all benefit from doing, is thinking about what. Not who does the partner have to be for us, and that is important, but also who do we have to be to be a good partner for that partner. And, you know, in representing lots of people and forming lots of partnerships and having lots of partners, and I don't have 100% of any company that I own now. I love partners, so. But you have to. You have to be in the right situation. So Tucker wasn't in the right frame of mind until he decided to do something about it. You need someone who either is a natural partner person or who has gone through the effort to become one. I wouldn't recommend that you take them and try to make them your project to change any more than I would recommend you do that with a potential partner. And then the situation has to be right as well, because different people. Because people are different people in different contexts.

So.

And I'm going to use a personal example that my wife says, is that my wife, she was married before, and her relationship was completely different than our relationship because the person she was in the relationship with, basically, and she'll own part of it as well, it was just. They just weren't a match. Right. It was a bad situation where the partnership was not that both people weren't. Shouldn't have been in a partnership. So you have to think about, you might have had a couple of things that didn't work out. How can you create the opportunity to be successful in the partnership that you want to form? And a lot of that goes to the things that we've talked about. And then after you get through the things that we've talked about, it goes to the process of partnership from a legal standpoint, actually communicating. And what I said, whenever somebody would come in and say, we want to do a business together and say, okay, we have to do a document that's a partnership agreement, that will literally be the page that we're getting on the same page of because and you guys come in. Whoever's thinking about a partnership comes in with different thoughts, expectations, beliefs, assumptions that might not be shared and probably aren't by the other person. The chances of all of those things being shared equally in the mind is almost nothing. Right? So having the. Taking the time to identify roles, responsibilities, go through, go buy a Form partnership agreement and look at all of the things that you're supposed to think about. Who's going to do what. What if, like for Ryan and me, what if. What if Ryan can do everything that Ryan needs to do to create the things that he's supposed to bring to this partnership in an hour, a week, but it takes me 60 hours. Then am I mad? Can I be mad at Ryan for being amazingly efficient and talented and me or even just the skill set that I've got? Maybe Ryan's the visionary creator and I'm the operator. Right. Well, that means I'm going to do a whole lot more 9 to 5 or 9 to 9 work than Ryan is. But his contribution will not be any less critical because the whole business doesn't exist if he doesn't create the intellectual property that he's supposed to contribute. Right. And in our business, you and I do a lot of that kind of stuff and then kind of not willingly get involved in operations in other parts of the business. But we have partners that are more operational who have to do that stuff. And we have conversations about that, and everybody's good with it. And that's important because if the assumption of. In my hypothetical. If my assumption is Ryan's going to work the same number of hours I am, and that's how I define our contributions, then we're going to have some serious. And you have to have those conversations.

That's exactly it. Right. The conversation has got to be had. That's a very difficult conversation to have a year, two years into the partnership. It is a much easier conversation to have when money.

Yeah.

When you're at the beginning and it's like, hey, let's have fun and talk about all the ways in which we're going to piss each. So cool. I think. I think it's good. I think I wish that I would have had some of these insights. I'm going to have to. To. I'm gonna have to go back to my buddy and say, you know, here are maybe some things to think about if you want to shift into being. Into being a partner person. But hopefully we've given everybody whether you're thinking about taking on a partner, partnering up. We also talked about raising capital. All these things factor into scaling your business. So whatever stage you're at, all these things are gonna be relevant. Hopefully we help some folks out today.

Yes.

And a couple of plugs for our stuff. Cause we just can't help ourselves. Cause we think that it's really good. And you guys should all do ethicallyprofit do and getepichallenge.com where we talk about how to acquire businesses with no money out of pocket. Something we talked about a little bit on this podcast and then growing and scaling your business. Scalable Co, not Com, but Scalable Co has all of our frameworks and models for how we do that. And if you want to market online, then we've got another company called digitalmarketer.com. all three of those are great things that I would highly recommend you check out. And if you enjoy this episode, please like, like it. Please subscribe and leave us a good review, if you would. We would.

We would indeed. We also have in our, in our podcast network, we just launched a new show with our business partner Richard Lindner called Ready to Lead, which I believe debuted at number 26. Um, and so that was, that was pretty great. And so, yeah, if you're, if you're the operator, the leader, the manager, or you're looking to identify folks in your company who could be ready to lead, make sure that you subscribe, check out and review our new show as well. It's gonna be awesome. Actually need to have Richard on to kind of talk about how do you identify those emerging leaders in your company so that you can kind of step out of the day to day what you talk about, Roland, not work in or on but over. That means getting some of these leaders and so future episode forthcoming on that. But in the meantime, yeah, check out the Ready to Lead podcast, wherever podcasts are sold.

All right, we'll see you guys next time. You've been listening to Business Business Lunch with Roland Fraser. If you're enjoying the show, let us know by subscribing and leaving a review. And for more information, go to businesslunchpodcast.com thank you for listening.

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