Making rev share & partnerships work between marketers and developerss

[Scattered]

The marketer feels like without his services, the product will never be seen/used. The developer puts in all the coding, design, testing, debugging, etc.

Because not every marketer is a developer and not ever developer is a marketer, there is a general need for collaboration and partnerships. Or, just flat out hiring a service to push your developed product.

I'm looking for advice on how to make these relationships fruitful for both parties. Often times you see people with "good ideas" trying to get someone to develop an app or website with a promise of a revenue share or partnership. While these scenarios are possible, I don't think they happen very often because the idea man usually wants at least 50% of the revenue.

How can a developer create a solution and network with someone to have it marketed without any out of pocket costs?

How can an marketer with a good idea network to have a solution created without any out of pocket expenses?

What would realistic revenue shares be for these parties?

Personally, being more marketer than developer, I would feel comfortable with a split like 65-75% Developer - 35-25% Marketer.

Does the rev share differ if the marketer has the idea and approaches the developer? What if the developer approaches the marketer with a completed idea?

Contracts are obvious, but I would appreciate advice on things to be included in it.

I know, a lot of questions to be answered. I've already compiled a mental list of possible flames for this post :yin-yang:. Hopefully someone out there will contribute to this. Thanks

 

[wayn3]

if a developer approached me with a completed product, but doesnt want to invest any kind of money into the whole deal, hed still have to part with at least 70%. i dont think programmers should be given any kind of equity. theyll just complain with their needy shit or crap about idealism or something. buy him a trip to wallstreet so that he can attend the 1% show or something. programmers earn salaries for a reason.

I get that this doesnt answer your question. problem is that theres no answer to your question. giving equity to people who shouldnt hold any just creates silly problems. give the guy a generous salary and be done with him. hes not running the show, he shouldnt be owning a part of it. give him a minor royalty if you have to be the nice guy.

 

[Scattered]

Interesting
I was hardly expecting that type of reply, but appreciate your views.

Maybe I should have phrased the "no out of pocket expenses" bit differently on the dev side.
I do feel like any expenses in regard to advertising or promoting the product outside of the marketer's work or "time" should be shared.

 

[wayn3]

Ok.

You had this great idea. Or your developer had that great idea. Fast forward 3 months. Hes built it. To him, its beautiful. In the meantime, youve slapped the site together. You bring in the traffic and his baby doesnt sell. You figure out why it doesnt. Turns out customers think feature X blows hard, but theyd love to have feature Y instead. Now your developer goes mental because customers are "stupid" and "just dont get how beautiful the product is". He wont make the necessary changes and doesnt allow you to hire someone else. Youre 5k in the hole and cant do shit about it because he holds 70%?

Enjoy.

Million other scenarios that play out exactly like that. Dont give people who are emotional rights to make decisions.


Every developer is one of these:

1. programming star who fell in love with computers. thinks of most people as below him. especially customers. thinks the world would be a better place if everyone was just as great as he was. this is definitely not business partner material.

2. coding bitch. had aspirations at some point but figured out that his php skills are a dime a dozen. if this guy wants some kind of share, you just replace him with the next coding bitch.

 

[Kiopa_Matt]

giving equity to people who shouldnt hold any just creates silly problems.

This, but looking from the opposite side of what he said. Why would the developer give up any equity? There's some exceptions, such as if a large company with solid infrastructure and contacts wants to make a deal, but most of the time, no reason to give up any equity. I mean, the develop is doing the product itself, support, training programs, infrastructure (support system, etc.), and so on.

There's loads of ways to develop sales & distribution channels. Affiliate program, VARs, ISVs, etc. Or just simply hire some sales reps.

 

[Scattered]

Thanks for the insight. It has me thinking a lot about ways to circumvent that from happening.

 

[Kiopa_Matt]

1. programming star who fell in love with computers. thinks of most people as below him. especially customers. thinks the world would be a better place if everyone was just as great as he was. this is definitely not business partner material.

Yes, because SEO guys are always so humble, never get cocky, and absolutely never overestimate their earnings while bragging about how much they make.

 

[wayn3]

Another problem with having a programmer as a partner is that youve got nobody to blame if he turns out too stupid to program it or generally lazy or some crap. If you run with a software company, and they cant deliver what they promised on time, theyll just pay the penalty they agreed to.

 

[hehejo]

Every developer is one of these:

1. programming star who fell in love with computers. thinks of most people as below him. especially customers. thinks the world would be a better place if everyone was just as great as he was. this is definitely not business partner material.

2. coding bitch. had aspirations at some point but figured out that his php skills are a dime a dozen. if this guy wants some kind of share, you just replace him with the next coding bitch.

Oh really... Can you please assign me to one of those 2 groups then? I don't know which one to choose...

 

[wayn3]

Oh really... Can you please assign me to one of those 2 groups then? I don't know which one to choose...

isnt it already in the title tag thing below your name? i dont think that programmers are bad persons per se. most of them just dont belong in decision making positions of companies.

 

[Scattered]

Each party will have their biased opinions against the other. Just seems as if wayn3 has been fucked in the ass by a couple developers. However, all of this input (-xrumer) is valuable to me. Thanks!

 

[hehejo]

i dont think that programmers are bad persons per se. most of them just dont belong in decision making positions of companies.

I agree, but most != everyone.

 

[wayn3]

i havent been fucked in the ass by anyone as of late. you guys just take yourself so damn seriously. thats what id have a problem with if i had to deal with you as a partner. ive not once been screwed by some kind of programmer because i know that i wouldnt want to deal with them in a way where theyve really got something to say.

what it comes down to is that you should pick your partners wisely. if theres this great programmer who is also a great guy and a killer sales person who understands business way better than you do, youd shoot yourself in the foot if you wouldnt partner with him.

back to the distribution of equity:

you need to first tell me whether you want to do a "fair" deal or a "best possible for me" deal

I agree, but most != everyone.

i dont know you. are you trying to convince me that you, or someone else is better than i think he is? i dont even know you. thinking of any insult i may or may not have produced as directly targetted towards you is insane. if you want me to think highly of you, hop on skype and convince me

 

[hehejo]

what it comes down to is that you should pick your partners wisely. if theres this great programmer who is also a great guy and a killer sales person who understands business way better than you do, youd shoot yourself in the foot if you wouldnt partner with him.

But then why would he partner with you?

In an ideal partnership you partner with people who cover your weaknesses. Nobody (or very few) people are experts in everything.

The percentage should be split up depending on how much value each person brings to the table. Not easy to figure out and has to be done between the people involved anyway. There is no "right" percentage.

 

[hehejo]

i dont know you. are you trying to convince me that you, or someone else is better than i think he is? i dont even know you. thinking of any insult i may or may not have produced as directly targetted towards you is insane. if you want me to think highly of you, hop on skype and convince me

No offense taken, I don't really care what you think about me or others.

I just wanted to point out that you can't group every single programmer on this earth into those 2 groups.

 

[guerilla]

A lot of programmers are losers. A lot of marketers are losers too. It's why there are so few brands in this space. People get bored with their own business within a couple months and want to start over as soon as things get tough.

Programmers generally don't love what they make. They aren't obsessed with making it great, iterating it, working out bugs, and loading in tons of features while increasing usability.

Marketers want to make a sale and not worry about servicing the client, which is the same for the programmer, since no one is wild about doing customer support.

So what you have are programmers who stop programming and marketers who stop marketing because neither party could get organized enough to make sure existing clients were well provided for whether it is educational materials, some human contact, snappy support etc.

I am not a developer, and I am a marketer, but I would like to think of myself as an entrepreneur who is interested in building something that is worth more 5 years from now than it is worth today. I think most programmers should be paid straight for their work, because programming is a commodity. When someone is exceptional at his job (programming or marketing) then they might deserve some equity. But you can outsource marketing to affiliates, and programmers are a dime a dozen if you're not interested in building a real business anyway.

My 2 cents.

PS, programmers are way flakier than marketers. Marketers however usually can't be trusted to be loyal.

 

[Scattered]

Nothin but awesomeness as usual guerilla.
Especially this

I am not a developer, and I am a marketer, but I would like to think of myself as an entrepreneur who is interested in building something that is worth more 5 years from now than it is worth today.

 

[guerilla]

It really comes down to the right people.

There aren't many businesses worth millions that don't take at least 2 or 3 years to mature. In some cases, it can take 6 or 8 years.

Most marketers and programmers just don't have the patience to do that.

Because I am old and getting too beat up to keep bootstrapping, I have to play the long game, but all of the bright young guys are still interested in keeping their options open (can't blame them) which makes partnerships a no go.

Any team of marketers and developers need to have matching time horizons and goals. If there is a big gap between their expectations, things won't work out. Actually making and selling a product is a lot less complicated than getting people to work together.

 

[zombi]

Shit like this is why I do vertical integration.

Also, it's fun, and the profit margins are better.

 

[crackp0t]

@wayn3

What you're really describing are personality defects and aren't specifically programmer only issues. I've met several people with those defects and you can't work with them regardless of what they offer. I'm a programmer and if a customer told me hey I want X feature why wouldn't I add it? Only an extremely narcissistic person would say "It's perfect, because I wrote it and you're stupid if you can't see that.".