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.
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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?
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.
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