Nowadays, the market is overwhelmed by competition and the ease of entry to it is such that differentiation has become highly valuable.
Consider how entrepreneurship has evolved in the past two decades. If a great idea wakes you up at 4 am, you can get online and sketch out the design and features, have a custom website for it built by 8 am, spread the word about it on your new company social media accounts by noon, and use Shopify or some other e-commerce set up to start taking pre-orders by 4 pm. Twelve hours following your Eureka moment, you’re all set – a process that would take weeks two decades ago.
The flip side? It increases the level of competition. 10 other startups may be working on a similar version of your same idea, with their cookie-cutter websites and social media accounts splashing out loads of content into the marketplace.
Seen from outside your mindset, it’s a crowded field of like-minded individuals that quickly begin to look identical to one another. So what makes your startup stand out?
Partnering with other organisations can rapidly stimulate growth and turn startups’ weaknesses into invaluable strengths. This can happen through finding partners that focus on system integration, reseller partners, or anything else that allows your company to grow fast and take control of whatever niche you are based in.
The Importance of Partnerships for Tech Companies
There are many reasons why a startup or scaleup can seek out allies that are already established and well-known, but three in particular stand out from the crowd.
- Increase value proposition
- Accelerate customer acquisition
- Enhance brand awareness and marketing
Let’s deep dive into the most fundamental of those three:
Increase Value Proposition
Enhancing the value proposition is a huge part of crafting today’s customer experience (CX). Every extra bit of customisation a firm can give its users is just another feather in your cap. Not only will it hopefully lead them to come back as a repeat customer, but it will also develop your brand organically through word-of-mouth and online reviews – the most powerful forms of advertising.
Once upon a time, Uber and Spotify were both in uphill battles to start their existence. While Spotify was in a crowded field of companies trying to become the leader in audio streaming, Uber was fighting over a century of people using taxi companies and the difficulties that many people have of riding with a stranger.
The peer-to-peer cab giant tried to make their riders feel more at home in a vehicle and, in 2014, partnered with Spotify to allow streaming service’s premium users to hear their playlists in the vehicle while riding. When you think about it, it was the perfect pairing. Listening to music in the car is one of the three most popular places for Spotify users, but if they were in a taxi they’d have no choice in the selection. Uber wants to cater to its customers in every way possible.
The partnership aimed to enhance both brands based on sharing a huge slice of the pie. None of the two companies would be able to assume the entire value chain on their own while remaining competitive. As customers’ expectations are constantly evolving, so is the synergy that allows companies to focus on their core offer that satisfies clients.
Accelerate Customer Acquisition
How many tech pioneers have failed before their first six months was up? They had an amazing idea but unfortunately couldn’t find the customer base to support it.
Take TrialPay, for instance, founded in 2006 in Silicon Valley into an extremely top-heavy niche – which used to offer free perks and gifts to its users who took purchase items from its merchant partners. Sounds slightly like every credit card company in the world, doesn’t it? The good thing was that TrialPay positioned itself as a tech company that targeted a specific customer – interested in earning things like exclusive video game content. The downside is that it only worked if customers were buying things online – every transaction made in person or over the phone could not be a part of TrialPay. When trying to allocate budget and attention first to social networks, then to the mobile movement, TrialPay found itself surrounded by competitors and not making enough of an impact. That is, until it partnered with Visa, one of its early-round investors, to leapfrog onto Visa’s platform in 2015. It enhanced Visa’s booming loyalty and rewards platform and gave TrialPay access to Visa’s customer base of 471 million debit card users in the US alone, and 1.09 billion in the rest of the world.
Customer acquisition went from a struggle to a milestone for TrialPay.
There are so many opportunities in the tech ecosystem without having to overlap interests that creativity can find its way without worrying about absorption or obsolescence. When you start looking for partnerships, consider what industries occupy the space ‘right next door’ to where you live and see what sort of symbiotic relationships can be possible.
Enhance Brand Awareness and Marketing
When it comes to increased brand awareness and marketing, startups will try anything and everything to get noticed; it’s the golden goose of the modern business age. With millions of entrepreneurs shouting for attention, how do you get your voice heard in a way that attracts and retains the attention of a segment of people who fill your specific persona?
In 2015, New York-based tech startup Pager was looking to create a mobile app that takes patients’ needs and matches them to nearby available doctors, nurses, and clinics. It is currently a necessary service with all sorts of room to grow, but without a powerful partner at the time, it was being ignored.
So Pager joined Walgreens, in business for more than 100 years, the second-largest pharmacy chain store in the US, and a brand name synonymous with affordable medical care. Suddenly the startup was connected to Walgreens and its brand credibility as a trusted brand magnified overnight.
The fear of “selling out” to a large corporation is no longer what’s going on here. Big brands aim to be as flexible and agile as their marketplace allows. They don’t want to get lured into the stereotype of big corporations that are so large that they seem ready to take over the world. Although Walgreens does not own Pager, both companies have forged a partnership that allows them to sustain a like-minded segment and enhance each other’s notoriety.
The game is changing, and if you want to play your part as a startup, it’s time to give it a try. Being an entrepreneur does not have to be about solving every problem on your own and going to war by yourself. Smart entrepreneurs can focus on enhancing and refining their offering to reflect their customers’ expectations. By finding potential partners, you can start to grow your business and brand without spending all your capital in marketing and advertising.