We recently stepped back from a proposed engagement that was positioned as a joint venture. The walk-away was decisive enough that it felt worth writing up — both as an internal record and because the pattern repeats across our industry and we've decided how we'll respond to it from here on.
What the JV shape looks like in practice
On the surface it's appealing. A partner brings the client, you build the platform, you split the upside. In practice the structure tends to encode three things into the contract that are individually defensible and collectively destructive:
- Operational handover. Hosting accounts, mobile distribution accounts, vendor relationships transfer to the partner on go-live, often described as "administrative custody." The word administrative does a lot of work there. Operational control of Vercel, Supabase, Apple Developer, Google Play is not administrative — it's the keys to the platform.
- Continuous source-code access as a default option for the partner. Marketed as "business continuity protection." Functionally a back door to your IP that doesn't require any triggering event.
- Non-circumvention drafted broadly. Not "you can't replace us with the same client." The clause covers the partner's entire pipeline — clients you've never met, leads you didn't know existed. Often paired with uncapped liability for breach.
Each of those is a real and reasonable concern from the partner's side. Combined, they amount to: you build the product, they hold the relationship and the leverage and the option to step in.
Why we won't sign it
The work doesn't fit the structure. Our model is long-arc partnership with the operator. We embed. We stay. We answer the phone in year five. A JV that puts a third party between us and the operator means we're answering through a translator. That breaks the trust gradient that makes the work good in the first place.
It mis-prices the work. JV-shape engagements price the build fee at a quarter of cost on the assumption of pipeline. When the pipeline doesn't arrive, the gap doesn't close — you've already shipped. The maths only ever favours the partner who controls the pipeline definition.
The IP isn't theirs to "concede". A common drafting move is to write a clause where the partner generously "concedes" or "releases" their claim to the IP. There was no claim to concede. Drafting language that frames the absence of a claim as a generous forfeit is a way to manufacture consideration. We don't accept that framing.
What a good vendor relationship does instead
The cleaner shape — one we'll happily take — is a customer-of-record relationship. The operator pays us for the platform, directly, on per-seat terms. A separate party (an introducer, a service partner) may have their own arrangement with the operator for training, support, configuration. That contract is between them and the operator. It has nothing to do with us.
That structure has three properties the JV lacks:
- The operator can fire either side without affecting the other.
- The platform vendor (us) is paid in proportion to the work, not the pipeline.
- No party owns operational control of infrastructure they didn't build.
The signs to watch for at contract stage
Before any drafting, three quick reads tell you which shape you're in:
- Who pays whom? If the partner pays you a fraction of what the operator pays the partner, the partner is intermediating margin and the contract will reflect that.
- Who holds the cloud accounts? If the proposed structure transfers them at handover, the contract is about control, not service.
- How does the term end? If termination requires the partner's consent or triggers a step-in, the partner has structured themselves into perpetuity. We don't sign perpetuity clauses dressed as commerce.
The rule going forward
We engage as a vendor. We answer to the operator. We charge per seat. We own the platform. We stay. Anyone introducing the operator to us is welcome, and we'll honour the introduction with a goodwill fee or an explicit thank-you — but they don't sit between us and the relationship that pays for the work.
Plain numbers, plain terms, no JV theatre.