notdevin

Joint ventures and revenue sharing models are criminally under utilized. The incredible works of private infrastructure are almost always joint ventures with revenue sharing in some way, and yet in tech the concepts seem to be almost entirely absent

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Embracing such concepts could be a game changer in the tech sector fr. It would  encourage very  good and fruitful partnerships and shared successes among companies.

High chance these companies don’t see a need for that kinda growth.

I think it goes back to funding sources and their motives, VC doesn’t like partnerships and there are valid reasons to be concerned over very large partners working with very small startups, too much power asymmetry in those cases. Smaller companies could do it more but not while they’re busy trying to spend as much possible to scale as fast as possible. There are certainly multiple externalities that would fuck with this potential, but the sheer absence is actually kinda deafening now that I think about it

Why are they so rare in tech, I mean joint ventures and revenue sharing

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The deals take effort to structure for sure, the value to be aligned is in plain sight of both parties, a lopsided deal in this case would often make for terrible bed fellows

i totally agree devin

its surprising how underutilized these models are in tech, given their success in other sectors
joint ventures, especially, could offer a path to scaling faster by leveraging complementary strengths

but do you think the challenge is more about structuring the deals or a lack of awareness around the potential?

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I tend to agree. I don’t think ego necessarily drives the initial avoidance of it, but i certainly think the ego loves to continue it

Joint ventures have been striving in the beauty sector for the longest time now. In tech most individuals and companies love to take 100% credit and ownership…it’s an ego thing I believe, or do you disagree?

My hunch is it’s related to dynamics of how value and liquidity needs to be achieved in VC. I don’t think it’s so much a conscious intentional aversion so much as it’s just kinda defacto disqualified

Totally with you on that. Joint ventures and revenue sharing could be gamechangers in tech, but they’re barely talked about. It's wild when you think about how much of the world’s infrastructure relies on collaboration like that, but in tech, everyone’s all about owning everything or selling directly. Imagine the innovation and growth we could unlock if companies worked together more. Why do you think tech is so hesitant to embrace these models?

A joint venture is an arrangement between multiple operating entities to share value creation and economics

I’m a bit lost between the difference between joint ventures and venture capitalists. 

Why do you encourage joint ventures?

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In my opinion they better align values to create enduring projects

What benefit do joint ventures have over VCs?

Exactly !!!
I think I pointed this out as an alternative to VC funding earlier

Now that you mention it, I don’t know any crypto partnerships