Hi everyone! I've posted basically the same question a week before but unfortunately got exactly ZERO replies. Maybe I was being too vague in my first attempt and pls excuse me if my question seems trivial to you, but I just need to ask again. Please, please someone reply this time (and pls excuse the length of this post). So here goes...
I'm currently building a business that is about selling digital content on a dedicated website. Just think of the digital content as a kind of course materials in text form (like in a PDF file). Creating the content is time-consuming and requires expertise and lots of thinking (I definitely think it has high entry barrier). In an ideal situation, on average and per unit of content it takes maybe 20~30 (or more?) hours of work spread over 2 weeks for one person to complete (as I'm doing this in the evenings during my spare time).
The plan is to create around a dozen units of digital content which should be sufficient for the launch of the website and then I would increase content gradually from then on (so far I've completed three units on my own). Each unit of digital content will be sold on average for $70 per download. The biz is scalable globally in all major markets, meaning potential customers in practically all developed or developing countries, it's all B2B, no consumers.
I consider the biz idea as such to be at least slightly above average, if not better (competition exist, but I'm adding significant innovation so my model will stand out). I'm trying my best to execute it at a level well above average, of course. If I can do that, I'm definitely aiming at 5-figure gross revenue per month within a year. I know it sounds crazy now, but I do believe in it. To hit 10K revenue per month would require 5 downloads per day on average on a global scale, which sounds possible provided my execution is sound.
Now here's my problem I've been pondering for days:
I intend to bring in a collaborator to help me with content creation. He is an expert with the necessary domain experience and his level of expertise and experience is actually a little higher than and and also complementary to mine, but his enthusiasm for getting the job done is of course nowhere near mine. (edit: I've known this expert for the past 13 years have worked with him, know his capabilities and trust him like a friend, though we're not close.) My expectation for bringing him onboard is to significantly accelerate content creation because we would be working as a team now, bouncing ideas between us back and forth, slugging it out side by side, synergy effects and also higher quality and better quality control. In fact, I believe if I were to work on the content all by myself it would probably burn me out soon and drag out the launch date by months.
So, I don't think paying him cash for his help is the ideal solution and he actually agrees. In an almost two hour long discussion in which I pitched my idea to my would be collaborator today, I managed to sell him on my biz idea from 0 (very skeptical) to around 80% ("sounds promising, I like your enthusiasm").
Now here's the deal: I told him I'm willing to give him a profit share in return for his collaboration for as long as he's onboard and for a certain time beyond that point, but I'm still not able to pinpoint those variables, namely the percentage of profit share. He only is expected to invest perhaps 3 or 4 hours per week including a weekly Skype call in which we will churn out content together, that is during the period before launch, that means maybe for 4-6 months, then the workload for him will relax as the first bunch of content is ready. There is no investment of capital on his part at all, only time and effort. I will be solely responsible for the business operation, all costs involved, including web development, registering a company, hiring an accountant, marketing, branding and possibly other things that I will outsource at my own expense. And I'm solely responsible to sell the website and make it a success. Thus, I don't intend to share equity in the company, which is a dealbreaker for me, and which he has accepted.
Finally, given all of the above, including potential revenue development of the biz, what would be a reasonable profit share percentage to offer? Myself, I was thinking of 5~10% of profits for as long as he's onboard and for additional 6~12 months beyond that point. But I really have no idea if this offer is too low or too high, etc. Is this ridiculous to offer or just right? I'm really clueless.
Of course, I understand I'm the only one able to make that assessment in the end, but I would really like to hear if anyone has some pointers or advice for me.
Thank you!
I'm currently building a business that is about selling digital content on a dedicated website. Just think of the digital content as a kind of course materials in text form (like in a PDF file). Creating the content is time-consuming and requires expertise and lots of thinking (I definitely think it has high entry barrier). In an ideal situation, on average and per unit of content it takes maybe 20~30 (or more?) hours of work spread over 2 weeks for one person to complete (as I'm doing this in the evenings during my spare time).
The plan is to create around a dozen units of digital content which should be sufficient for the launch of the website and then I would increase content gradually from then on (so far I've completed three units on my own). Each unit of digital content will be sold on average for $70 per download. The biz is scalable globally in all major markets, meaning potential customers in practically all developed or developing countries, it's all B2B, no consumers.
I consider the biz idea as such to be at least slightly above average, if not better (competition exist, but I'm adding significant innovation so my model will stand out). I'm trying my best to execute it at a level well above average, of course. If I can do that, I'm definitely aiming at 5-figure gross revenue per month within a year. I know it sounds crazy now, but I do believe in it. To hit 10K revenue per month would require 5 downloads per day on average on a global scale, which sounds possible provided my execution is sound.
Now here's my problem I've been pondering for days:
I intend to bring in a collaborator to help me with content creation. He is an expert with the necessary domain experience and his level of expertise and experience is actually a little higher than and and also complementary to mine, but his enthusiasm for getting the job done is of course nowhere near mine. (edit: I've known this expert for the past 13 years have worked with him, know his capabilities and trust him like a friend, though we're not close.) My expectation for bringing him onboard is to significantly accelerate content creation because we would be working as a team now, bouncing ideas between us back and forth, slugging it out side by side, synergy effects and also higher quality and better quality control. In fact, I believe if I were to work on the content all by myself it would probably burn me out soon and drag out the launch date by months.
So, I don't think paying him cash for his help is the ideal solution and he actually agrees. In an almost two hour long discussion in which I pitched my idea to my would be collaborator today, I managed to sell him on my biz idea from 0 (very skeptical) to around 80% ("sounds promising, I like your enthusiasm").
Now here's the deal: I told him I'm willing to give him a profit share in return for his collaboration for as long as he's onboard and for a certain time beyond that point, but I'm still not able to pinpoint those variables, namely the percentage of profit share. He only is expected to invest perhaps 3 or 4 hours per week including a weekly Skype call in which we will churn out content together, that is during the period before launch, that means maybe for 4-6 months, then the workload for him will relax as the first bunch of content is ready. There is no investment of capital on his part at all, only time and effort. I will be solely responsible for the business operation, all costs involved, including web development, registering a company, hiring an accountant, marketing, branding and possibly other things that I will outsource at my own expense. And I'm solely responsible to sell the website and make it a success. Thus, I don't intend to share equity in the company, which is a dealbreaker for me, and which he has accepted.
Finally, given all of the above, including potential revenue development of the biz, what would be a reasonable profit share percentage to offer? Myself, I was thinking of 5~10% of profits for as long as he's onboard and for additional 6~12 months beyond that point. But I really have no idea if this offer is too low or too high, etc. Is this ridiculous to offer or just right? I'm really clueless.
Of course, I understand I'm the only one able to make that assessment in the end, but I would really like to hear if anyone has some pointers or advice for me.
Thank you!
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