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Joint Venture

     A joint venture could yield results that one company alone could never have achieved. However, not all joint ventures will succeed.


     One of the most successful joint ventures was the VHS videocassette recorder. The VHS VCR was developed by JVC (Japan Victor Company). Then, they lent the prototype to any companies interested in it without restriction. Those companies continued to develop the VHS together through joint ventures. In fact, the very first VHS VCR on the market contained many features developed by the various companies that participated. As JVC expanded their search of partners overseas, more and more companies joined the VHS project. As a result, VHS became the world standard of VCR even though Sony hit the market with Beta Max before VHS. If you can gather many comrades, small companies (I bet most of you have never heard of JVC.) can beat an industry-leading company like Sony.


     Some might think JVC could have made big bucks if they had exclusively sold VHS cassettes while lending the VHS VCR to other companies. If they had done this, they might have not been able to gather as many partners as they did. About 30 years ago, Kodak did something similar. They invented a film cartridge that never failed to load film. Kodak kept a patent of the film cartridge but licensed a patent for a compatible camera at a bargain price. They were hoping there would be many compatible cameras on the market, and that they would make a fortune by exclusively selling the film cartridges. If Kodak had given away the patent for the compatible camera, it might have been a different story. However, Kodak could not attract enough companies to the project. This meant Kodak did not make any money on patent licensing and sales of the film. A few years later, it was hard to find a camera store carrying the film cartridges.

Team Work

     There is always more than one company involved in any joint venture. So, the team split is crucial to success. There are people pitching so-called joint ventures in which only they make money. On the other hand, there are people inviting others to joint ventures where everyone will make money. Of course, you should avoid all-about-them projects. At the same time, you must not take advantage of honest partners. It's “one for all” and “all for one”, you need both to succeed in any joint venture.

© November, 2011