Loading ...Hi ,
I have been thinking a lot about using strategic partnerships to generate the early customer traction. I feel a lot of startups can save costs if they go for a strategic partnership with another startup. That way they can easily cash on their common customers and would be a win win situation for all. I would like to know experiences of readers here. Have you ever tried such partnerships? Were you successful? What were the challenges?
Also , I would like to know how we can accomplish networking between startups looking out for such partnerships in an efficient way.
It is in line with what incubators set out to achieve ..
Collaboration between start-ups is complicated by the fact that
1) The product/service & the business model are still being worked out and you don’t know who will end up as a competitor.
2) Everyone’s looking for customers with deep pockets (not penny-pinching fellow start-ups) to do business with.
I concur with what you are saying. Networking is a great help. Not just between start-ups in India, but also with aspiring entrepreneurs of Indian origin abroad (like yours truly!)
I think blogs like these and forums like TiE are a great help.
Dear Mohit,
You have an interesting point but I was wondering what if the customers are not happy?
Putting on a users hat, when I signup with an Internet based service, I assume that my privacy would be sacrosanct. My identity and contact information would not be shared. If there is an user sharing agreement between services, I would not want to sign up because a service provider can sell my information to anyone and everyone.
Second if I put on a business owners hat, I would want my product offering to be different from everyone else (if I have to have a sustainable business ever). Further I would attract only a certain kind of users. If I am to share them with someone else, there are two things. Either the guy I am sharing with is too similar to my service (my users might migrate altogether). Or the service is complementary so that my users are somehow benefited with this new service. And if there is such complementary service, I would rather have it on my website than giving it to other people.
Obviously first thoughts. Please tell me if my arguments hold any ground.
Regards,
SG
Saurabh,
nice comments.
I am sure you as a user would have privacy concerns. But if the business owner understands these concerns, then there is a solution to it definitely. The user should have an option to not take up the shared service . Also only a mapped random identification number can be shared and a protocol can be designed to solve this.
As a business owner, i think what i meant was more towards complimentary partnerships. About your concern, why not have it on my site itself. Well, it can happen that 2 websites are in entirely different verticals but can still be partners. I am quite sure about that.
Hi,
can you plz enlighten me a bit more about wt excatly you want to do in terms of designing/ implementation/ maketing/ promotion/ general issues ot be addressed and level of competiiton??
i had thought of doing such things long back but cudn’t just decide on how to start and from whr to start.
right now an engauged with my own startup in Delhi since a yr time.
f interested do respond @ nishant@glozon.com
Regards,
nishant
Hi Mohit - I think its a Hobson’s choice as the excercise of cracking the customer accquisiton cycle will still remain a challenge. Given that this is a common issue among most of the startups - after co-opting the offerings - the company will be back to square one in terms of figuring out how do I convert prospects into customers.
I think what would be a better idea for a startup to do is to tag along with a bigger and more established player (should be a end-user) and co-opt his service/ product offering with the end-user. This way the start-up is playing on his strenghts and piggybacking on the established player for the initial traction
Hello, interesting point - we are actually a living example of this. I am part of a young growing company, and we have a very successful strategic partnership with another company of similar profile for over a year now.
The biggest challenge is to ofcourse identify who is truly complimentary to your organization so that both the organizations don’t feel threatened by each other. Next is to work out a win-win partnership formula - not as easy as it sounds, but once done goes a long way in helping both organizations work to their best potential.
How can you go about doing it - I would suggest that identify companies who are in similar generic domain, but which dont offer services/products similar to yours. Also, in my personal experience such relationships work better (read - actually generate result, rather than act as another partner name on your website) if both organizations are of more or less similar size. Generally people are very receptive to such partnerships - meet the promoters - personal bonding is again very important to sustain relationships for longer durations.
Saurabh - The way we address customer’s concerns on privacy is that we upfront tell them that a part of their work would be handled by our partner company, and the same is built into our contracts/service agreements as well. Customers are actually happy to hear that they get all the related services from one point of contact, and they dont have to talk to different people for their needs.
Best,
Manish
Mohit,
In my experience, i’ve realized that two startups dont make a bigger company, infact they actually have twice the amount of issues to solve now. I would agree with the gentleman who said that since the model and such is still evolving, it would be hard to figure out and draw the boundaries to work under.
The idea of Mohit is interesting. The reason for partnership as he mentioned - to share a common customer base looks simple and doable but in reality it is very complex. Business partnership, for that matter any relationship is based on four founding pillars - Trust, Commitment, Give and Get. The true value of any relationship is a simple ratio of get/give.
Unless the give is really greater than get, I do not think the partnership will last long. Defining the boundaries of get and give in any relationship is very much dependent on attitude of partners - business is always done with individuals and individual comfort levels of getting along together is more important than anything else.
The fact that any business is all about customers, promoter /owner of each company feels his customer base needs to be protected at any cost. This creates a great barrier for any kind of combined pitching.
The best way to do it is perhaps have an informal arrangement.If you get a requirement from your customer which you feel the other partner will be able to do a good job / is his domain then you simply suggest to your customer that “I know a guy who does this would you like me to introduce him to you?” kind of talk. This works wonders rather than you commiting to the customer on behalf of your partner. Ask a question to yourself-if the partner does not deliver what will be the impact it has on my business realtionship with the customer? If the impact is negligible you go ahead but keep in mind that you have suggested something expecting a positive outcome. If you have great respect for the quality of the product/services of your partner and have experienced it personally it makes sense else it will be a huge risk which no new start-up will be willing to take.
Any takers?