I’ve been noticing a trend for larger projects that have been coming to us lately. A surprising number of long term clients as well as new customers want to formally partner and work together to build web applications. I’ve had several conversations turn to creating a joint venture LLC or a cooperative agreement early on. We regularly get 3-4 of these a year but in the last 6 months, I’ve had at least 8 joint venture opportunities of one kind or another pass my desk.

What does this kind of arrangement do?

For our clients a joint venture can:

1. Reduce financial risk by lowering up front development costs – ArcStone bears a proportionate amount of the expense.
2. Give the project a jump start – sometimes we can we inject proprietary software into the partnership.
3. Eliminate the need for our clients to hire any initial, dedicated technical employees.

Joint ventures benefit ArcStone by:

1. Providing an additional revenue stream and an avenue for discovering new consulting opportunities.
2. Enables us to harvest some of the potential upside as the application becomes more successful.
3. Allows us to exercise our entrepreneurial muscles (which is a ton of fun) – having started three other online spin-offs, AssociationsOnline, HOAWeb, and Wonderfile – we love the start-up!

Is this a sign of the times – are other web developers seeing this trend?

Tags: ArcStone, Collaboration, Management, Marketing, Partnering

This entry was posted on Thursday, January 28th, 2010 at 9:59 am and is filed under General. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.