The vendor incentive

Make a distinction between vendors and partners, and protect it.

Vendors love to call themselves partners because its easier to gain someone‘s trust. Sell the Client on partnership with vendor terms.

What are vendor terms? Paradoxically, it has nothing to do with how the vendor is compensated. Companies organize compensation through a variety of methods and models. Rule of thumb 1: a vendor who requires cash Doesn’t have enough to pay heir bills. Rule of thumb 2: a vendor who requires cash does not believe in their deliverable. Rule of thumb 3: a vendor who requires cash is not acting rationally.

The distinction should instead turn on the deliverable. What is the vendor giving you in Return for compensation? If the deliverable is not directly related to you accomplishing your next goal, then run away. For example: vendor wants to rework your pitch deck. But then it’s your responsibility as a founder to use the pitch deck to close investors. The deck is not directly related to accomplishing the goal because the process still requires you to do work. Instead, look for a vendor whose deliverable is “close funding”. in the process of accomplishing this goal, a pitch deck may be required, in which case its in the vendors interest to produce a pitch deck. Rule of thumb 4: a vendor who does directly affect a result, is NOT a partner.

Partners directly affect results, while vendors provide proximate tools. Do not confuse vendors with partners. And do not allow vendors to convince you they are partners.

What are your goals? These days, it’s all revenue. Do you need a revenue plan to generate revenue? NO, but that’s exactly what a vendor who claims to be a partner will sell you.

When we work with you, we do whatever is needed to hit revenue goals. Why are our targets $1, $5k, and $15k? Each target makes you eligible for different levels of funding via lenders. Simple as that. Why lenders, not investors? Investors are vendors who convince you they are partners. Investors give you money, then it’s on YOU to make it successful....aka a Vendor.

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