Honesty is a Virtue
How many people are honest these days? When some1 asks "how are you doing? how is your business?" Do you answer "I'm miserable, full of stress.. Business is going the drain, chaos is around the corner, we won't survive the year?" Or do you put a smile and say "Everything is great! How are you doing?" Then the answer is another lie, "Excellent! I love my life! I love my job!" Would you believe you could get better results just by telling the truth?
Last week I had a final discussion with a company from Korea looking for a partner in Indonesia. We met on December and hit it off really good. Ready to become their partner/implementor, we treaded the deals. There was one obstacle. We had to buy an initial license. And the price is quite high. double digit G's plus we had to buy servers also (another 5k) .We could not afford it. How do we tell them? Pride was in my way. I had wanted to say "we can't invest that much because there is limited market potential in Indonesia.. blablabla".. But a friend told me, if you want it, just tell the truth. It was quite hard to swallow my pride and say we could not afford it. I wanted the partnership.. And after several moments of pondering how to get that amount of money... Then even though I could get the money, it would still be a foolish thing to do financially.. I finally swallowed my pride and told him the truth.
We are now partners with ARA Networks!
below is the transcript of our chat on skype. Quite long even though some parts of the conversation had to be excluded :)
[1/31/2008 12:14:44 PM] api.perdana says: Good afternoon Mr. Choi
[1/31/2008 12:15:20 PM] [Korean Contact] says: Hi....GOod afternoon...Mr. Api perdana...
[1/31/2008 12:15:23 PM] [Korean Contact] says: How are you?
[1/31/2008 12:15:38 PM] api.perdana says: I am fine, thank you.
[1/31/2008 12:16:15 PM] api.perdana says: My legal guy wanted to ask a question regarding the Partnership Proposal you sent me.
[1/31/2008 12:16:29 PM] api.perdana says: It is on page 4, Partner's Conditions.
[1/31/2008 12:16:39 PM] [Korean Contact] says: OK..Hold on, let me open.
[1/31/2008 12:17:05 PM] api.perdana says: The third item "Initial Order (only for demo, not for selling)
[1/31/2008 12:17:07 PM] api.perdana says: "
[1/31/2008 12:17:16 PM] [Korean Contact] says: Yes....
[1/31/2008 12:17:24 PM] api.perdana says: Could you please explain more on that point?
[1/31/2008 12:18:07 PM] [Korean Contact] says: OK...usually such as Cisco, HP, SUn,,requires partners to purchase their routers or servers..
[1/31/2008 12:18:14 PM] [Korean Contact] says: before the marketing......
[1/31/2008 12:18:47 PM] [Korean Contact] says: And ARA also requires partners to purchase the licenses for demonstration.
[1/31/2008 12:19:15 PM] api.perdana says: Which license is that?
[1/31/2008 12:19:25 PM] api.perdana says: and how much does it cost?
[1/31/2008 12:19:25 PM] [Korean Contact] says: I have never seen any partners to market if the partners don't place initial order.
[1/31/2008 12:19:39 PM] [Korean Contact] says: License is the web cache, PPTM product's license..
[1/31/2008 12:19:53 PM] [Korean Contact] says: ARA is basically S/W developing company.
[1/31/2008 12:20:38 PM] [Korean Contact] says: ARA provides license based S/W and in general partners buy commercial servers and the partners build S/W onto the commercial servers.
[1/31/2008 12:20:38 PM] api.perdana says: Yes
[1/31/2008 12:21:18 PM] [Korean Contact] says: The initial order for Gold partner is about **K USD and **% discount.
[1/31/2008 12:21:31 PM] [Korean Contact] says: Silver partner is about **% discount and **K initial order..
[1/31/2008 12:22:02 PM] [Korean Contact] says: I hope you understand...
[1/31/2008 12:24:45 PM] api.perdana says: the license is quite expensive :)
[1/31/2008 12:24:49 PM] api.perdana says: USD **k
[1/31/2008 12:25:21 PM] [Korean Contact] says: Umh.....
[1/31/2008 12:25:59 PM] [Korean Contact] says: My idea is simple, if the partner don't have any products to market, then I am pretty sure that the partners will not do anything and will move very slowly.
[1/31/2008 12:26:27 PM] api.perdana says: What is the software for?
[1/31/2008 12:26:36 PM] [Korean Contact] says: Jaguar and PPTM.
[1/31/2008 12:26:51 PM] api.perdana says: Yes, but there is no hardware yet.
[1/31/2008 12:27:00 PM] api.perdana says: Or does that already include the hardware?
[1/31/2008 12:27:29 PM] [Korean Contact] says: You choose H/W company on your benefit..
[1/31/2008 12:27:42 PM] [Korean Contact] says: I mean if you have good relationship with Dell, you can choose dell.
[1/31/2008 12:28:06 PM] [Korean Contact] says: or if you have good relationship with Sun or HP, you can choose them.
[1/31/2008 12:28:30 PM] [Korean Contact] says: Basically, ARA provides S/W, partners provide H/W and combine them and sell to the endusers.
[1/31/2008 12:28:43 PM] [Korean Contact] says: This is the basic foreign partnership model.
[1/31/2008 12:29:13 PM] [Korean Contact] says: As always, the prices are negotiable.
[1/31/2008 12:31:48 PM] [Korean Contact] says: (handshake)
[1/31/2008 12:32:31 PM] api.perdana says: I am a bit confused :)
[1/31/2008 12:32:38 PM] api.perdana says: I thought you also provided hardware
[1/31/2008 12:32:47 PM] api.perdana says: like Jaguar
[1/31/2008 12:32:48 PM] [Korean Contact] says: If you want, I can do..
[1/31/2008 12:33:03 PM] [Korean Contact] says: OK let me explain..
[1/31/2008 12:33:13 PM] [Korean Contact] says: 1) ARA provides H/W + S/W to Avevo
[1/31/2008 12:33:30 PM] [Korean Contact] says: 2) ARA provides S/W only + Avevo provides H/W to the customers.
[1/31/2008 12:33:37 PM] [Korean Contact] says: It's your option.
[1/31/2008 12:33:53 PM] [Korean Contact] says: If you choose 1),
[1/31/2008 12:34:18 PM] [Korean Contact] says: then you pay more tax and the appliance(S/W+H/W) price will be high because of delivery fee.
[1/31/2008 12:34:39 PM] [Korean Contact] says: If you choose 2), you will pay less tax and no delivery fee.
[1/31/2008 12:34:59 PM] [Korean Contact] says: I will give you installation CDs by air, and license by email or by mail.
[1/31/2008 12:35:34 PM] [Korean Contact] says: I hope you under stand..
[1/31/2008 12:36:16 PM] api.perdana says: Do you have a list of compatible hardwares?
[1/31/2008 12:37:56 PM] [Korean Contact] says: Yes.
[1/31/2008 12:38:23 PM] api.perdana says: [url censored]
[1/31/2008 12:38:27 PM] [Korean Contact] says: DELL PowerEdge 2950 http://www.dell.com/content/products/productdetails.aspx/pedge_2950?c=us&cs=555&l=en&s=biz&~section=specs#tabtop
HP ProLiant DL380 G5 http://h10010.www1.hp.com/wwpc/us/en/sm/WF05a/15351-15351-3328412-241644-241475-1121516.html
[1/31/2008 12:38:28 PM] api.perdana says: I thought you sold this
[1/31/2008 12:39:18 PM] [Korean Contact] says: Yes I sold it...
[1/31/2008 12:39:43 PM] [Korean Contact] says: Appliance type...
[1/31/2008 12:40:14 PM] [Korean Contact] sent file "JAGUAR_Spec_080109.pdf" to members of this chat
[1/31/2008 12:41:27 PM] [Korean Contact] says: That sever model is based on Dell PowerEdge 2950./
[1/31/2008 12:45:50 PM] [Korean Contact] says: OK?
[1/31/2008 12:46:30 PM] api.perdana says: ok
[1/31/2008 12:46:54 PM] [Korean Contact] says: So it's good for you..
[1/31/2008 12:47:01 PM] [Korean Contact] says: you have two options....
[1/31/2008 12:47:17 PM] [Korean Contact] says: [url censored]
[1/31/2008 12:47:23 PM] [Korean Contact] says: You can see ARA's partners..
[1/31/2008 12:48:02 PM] [Korean Contact] says: I suggested the two options...but most partners chose the second one, S/W only...they have their own partnership with server suppliers and can buy cheaply..
[1/31/2008 12:51:05 PM] [Korean Contact] says: Everything is clear?
[1/31/2008 12:51:19 PM] api.perdana says: Yes
[1/31/2008 12:51:22 PM] api.perdana says: Thank you
[1/31/2008 12:51:27 PM] [Korean Contact] says: No problem...
.
[THIS IS CENSORED BECAUSE IT IS A DISCUSSION ON POTENTIAL CLIENTS]
.
[1/31/2008 1:33:04 PM] [Korean Contact] says: OK...thanks for cooperation..
[1/31/2008 1:33:19 PM] [Korean Contact] says: Do you think positive about the partnership?
[1/31/2008 1:34:23 PM] [Korean Contact] says: And if you want to know some contact information, you can tell me,,,I can get some contact information by agency...
[1/31/2008 1:34:34 PM] [Korean Contact] says: I wish I can have a good partnership with Avevo...
[1/31/2008 1:35:46 PM] api.perdana says: We are excited for the chance to be a partner. But I have to be honest upfront that I think the initial cost for us may somewhat be an obstacle.
[1/31/2008 1:36:31 PM] [Korean Contact] says: Could you tell me how much is the suitable?
[1/31/2008 1:36:47 PM] api.perdana says: As you may already know, we are not a large company and $**k upfront is quite steep :)
[1/31/2008 1:37:53 PM] api.perdana says: I will have to discuss the matter with my partners before I am able to answer that question.
[1/31/2008 1:38:17 PM] [Korean Contact] says: **K USD??
[1/31/2008 1:38:40 PM] api.perdana says: yes. You said $**k, partner gets **% discount.
[1/31/2008 1:38:50 PM] api.perdana says: That is $**k
[1/31/2008 1:39:36 PM] [Korean Contact] says: **% is the discount for the product...for example
[1/31/2008 1:39:50 PM] [Korean Contact] says: J3K SF800 $**,***
[1/31/2008 1:39:57 PM] [Korean Contact] says: is the list price of the product.
[1/31/2008 1:40:13 PM] [Korean Contact] says: for silver partner the price will be **,*** USD (**% discount) -> higher that I initially thought
[1/31/2008 1:41:04 PM] [Korean Contact] says: but for gold partner the price will be **,*** USD (**% discount)
[1/31/2008 1:41:18 PM] [Korean Contact] says: initial order is **K for silver partner, **K for gold partner..
[1/31/2008 1:43:32 PM] [Korean Contact] says: Hold on, let me talk with my team..
[1/31/2008 1:43:35 PM] [Korean Contact] says: give me 1 minute..
[1/31/2008 1:43:44 PM] api.perdana says: ok
[1/31/2008 1:43:46 PM] [Korean Contact] says: I think I can help you about the initial order.
[1/31/2008 1:49:07 PM] [Korean Contact] says: I will invite your 1 engineer charged by ARA Networks.
[1/31/2008 1:49:41 PM] api.perdana says: invite?
[1/31/2008 1:49:42 PM] [Korean Contact] says: and the initial order will be reduced **,*** USD -> reduced 20%
[1/31/2008 1:49:54 PM] [Korean Contact] says: Yes I will invite your engineer to come to Korea.
[1/31/2008 1:49:59 PM] [Korean Contact] says: Free training..
[1/31/2008 1:50:24 PM] api.perdana says: how long will this training take?
[1/31/2008 1:50:28 PM] [Korean Contact] says: ARA will pay for one engineer for the training in Korea including accomodation and airplane tickekt..
[1/31/2008 1:50:34 PM] [Korean Contact] says: the training will take about 3 or 4 days.
[1/31/2008 1:50:48 PM] [Korean Contact] says: And I can reduce the initial order to **,*** USD,,,
[1/31/2008 1:50:57 PM] [Korean Contact] says: this is the best that I can do for you...Mr. Ap Perdana.
[1/31/2008 1:52:05 PM] [Korean Contact] says: an initial order for J3K SP400 (the original price is **,***).
[1/31/2008 1:52:36 PM] [Korean Contact] says: What do you think?
[1/31/2008 1:58:11 PM] [Korean Contact] says: You are very lucky since ARA doesn't have any partner in Indonesia yet.
[1/31/2008 1:58:32 PM] api.perdana says: Yes, I know.
[1/31/2008 1:58:36 PM] [Korean Contact] says: You can see [url censored]
[1/31/2008 1:58:51 PM] [Korean Contact] says: Two European SI companies gave us proposal recently.
[1/31/2008 1:59:04 PM] [Korean Contact] says: ARA's products are very promising as you know.
[1/31/2008 2:00:14 PM] [Korean Contact] says: What do you say?
[1/31/2008 2:03:54 PM] api.perdana says: Well, the argument my team states is that to make a sale, we only require brochure, product catalog, presentation files, and representative letter.
[1/31/2008 2:06:09 PM] api.perdana says: I am sorry, but I would rather be honest now.
[1/31/2008 2:06:22 PM] api.perdana says: We will give it our best to market your product
[1/31/2008 2:06:43 PM] api.perdana says: But to put that amount of money upfront is heavy for us.
[1/31/2008 2:07:18 PM] api.perdana says: If the brochures and other sales kit were made available, we will gladly cover the printing and shippng cost.
[1/31/2008 2:07:48 PM] api.perdana says: We can work on a tight timeline and provide detailed information on sales progress.
[1/31/2008 2:08:56 PM] api.perdana says: But again, financially, we are unable to make a commitment like that.
[1/31/2008 2:10:49 PM] [Korean Contact] says: ARA only keeps partners who placed initial orders because I always think "no investment, no move"....**,*** USD was the amount even I should persuade my boss...
[1/31/2008 2:10:58 PM] [Korean Contact] says: It was my sincere best...
[1/31/2008 2:12:08 PM] [Korean Contact] says: Ok..then let's talk about the project case by case...
[1/31/2008 2:13:02 PM] [Korean Contact] says: Company's policy is policy....then we can talk case by case if there is a potential customer.
[1/31/2008 2:13:04 PM] [Korean Contact] says: OK?
[1/31/2008 2:13:46 PM] api.perdana says: So, we are still permitted to market your product
[1/31/2008 2:14:02 PM] api.perdana says: And then after we receive a lead, we can contact you?
[1/31/2008 2:14:15 PM] [Korean Contact] says: Yes..of course.
[1/31/2008 2:14:26 PM] [Korean Contact] says: I can send you some brochures soon..
[1/31/2008 2:14:31 PM] [Korean Contact] says: I just trust you...
[1/31/2008 2:14:31 PM] api.perdana says: Okay.
[1/31/2008 2:14:34 PM] api.perdana says: Thank you!
[1/31/2008 2:14:45 PM] api.perdana says: I know its a hard thing to do
[1/31/2008 2:14:45 PM] [Korean Contact] says: when I met you guys at the conference, I was impressed by your honesty..
[1/31/2008 2:14:50 PM] [Korean Contact] says: I like honesty.
[1/31/2008 2:15:13 PM] api.perdana says: Thank you
[1/31/2008 2:15:19 PM] [Korean Contact] says: I usually look at partner's eyes...you guys have good eyes,,,really.
[1/31/2008 2:15:28 PM] [Korean Contact] says: my pleasure...it's my pleasure to know you.
[1/31/2008 2:16:54 PM] [Korean Contact] says: I can give you software list price...
[1/31/2008 2:17:42 PM] api.perdana says: Allright. I will get my marketing team on it right away :)
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[THIS IS CENSORED BECAUSE THIS IS THE PRICE LIST]
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[1/31/2008 2:18:29 PM] [Korean Contact] says: There is no table.. -> the table format is gone when pasted on the chat
[1/31/2008 2:18:36 PM] [Korean Contact] says: Table is gone.
[1/31/2008 2:18:41 PM] api.perdana says: Its ok. We can retype.
[1/31/2008 2:19:09 PM] [Korean Contact] says: Hold on.
[1/31/2008 2:20:40 PM] [Korean Contact] says: Do you prefer H/W(+S/W) or only S/W provide by ARA??
[1/31/2008 2:20:59 PM] [Korean Contact] says: provided by ARA?
[1/31/2008 2:22:05 PM] api.perdana says: is there a large price difference if you provide the hardware also?
[1/31/2008 2:22:17 PM] [Korean Contact] says: For you S/W is much better...
[1/31/2008 2:22:32 PM] [Korean Contact] says: you can find a cheap commercial server supplier and you can get more profit.
[1/31/2008 2:23:13 PM] [Korean Contact] sent file "Jaguar???.JPG" to members of this chat
[1/31/2008 2:23:28 PM] [Korean Contact] sent file "JaguarListPrice.JPG" to members of this chat
[1/31/2008 2:24:19 PM] api.perdana says: This is just the software version?
[1/31/2008 2:24:25 PM] [Korean Contact] says: Yes.
[1/31/2008 2:24:48 PM] [Korean Contact] says: I can suggest you **% discount, you can think your margin and sell to your customers...
[1/31/2008 2:25:28 PM] [Korean Contact] sent file "JAGUAR_Spec_080109.pdf" to members of this chat
[1/31/2008 2:26:25 PM] api.perdana says: I think you already gave me that file :)
[1/31/2008 2:26:53 PM] [Korean Contact] says: Oh really?
[1/31/2008 2:27:49 PM] [Korean Contact] sent file "Comparison_J3K_Squid.pdf" to members of this chat
[1/31/2008 2:27:49 PM] api.perdana says: its okay.
[1/31/2008 2:28:04 PM] [Korean Contact] says: And you can see why I'm confident to sell ARA's products.
[1/31/2008 2:28:08 PM] [Korean Contact] says: by looking at this document.
[1/31/2008 2:28:15 PM] api.perdana says: Aah.. this is the selling point :)
[1/31/2008 2:28:36 PM] [Korean Contact] sent file "BlueCoat&Squid_ARA_Comparison_2.pdf" to members of this chat
[1/31/2008 2:28:40 PM] [Korean Contact] says: This too.
[1/31/2008 2:28:59 PM] [Korean Contact] says: There is only one competitor which is called BlueCoat...
[1/31/2008 2:29:12 PM] [Korean Contact] says: and the other competitor is Squid, a free open source code.
[1/31/2008 2:29:22 PM] [Korean Contact] says: Squid is more popular over the world..
[1/31/2008 2:29:27 PM] [Korean Contact] says: and there are no more competitors..
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