Nowadays, especially for startups, joining forces with a more profitable business becomes a requirement. Not only startups can greatly benefit from business partnerships, but by developing strategic relationships with bigger companies, they can increase their brand awareness and ultimately increase their sales. If Slack, Trello or Spotify – former early-stage startups – have all defined a partnership strategy, it’s to aim for rapid growth, among customer acquisition, system integration, online visibility, expansion, or value proposition enhancement.
Although most startups daydream of becoming unicorns, they shouldn’t only be seeking the profits from the partnerships that they establish. Instead, they should also be cultivating common grounds: aligned interests, vision, or values. When you think about it, combining skills can bring fresh and highly innovative ideas on the table and encourage your business growth.
So whether you’re selling a product or service, this article presents concrete ways to boost your startup’s overall strategy and drive unexpected growth through successful partnerships.
Consider why you want to form this partnership
Source the right firms for this partnership
Once you set clear goals for this partnership, you need to source the firms that could potentially become your future partners. This means hours, days, months of cold emails – or calls. This also inevitably means loads of nos and ghosting.
Maximise your chances by contacting as many people as you can and spread the word that you’re looking for a collaboration. Tell them what you do, the solutions you expect to bring on your market and what you’re expecting from a partnership. Additionally, if you have, inform them about your brand mentions in the industry press, and any milestones or awards gathered to date.
If you wonder how you can efficiently look for new partners, there are a few networking platforms to help smooth your research: like-minded LinkedIn or Facebook groups, webinars focused on your product areas (Eventbrite is a good start), related Slack channels or community events. Naturally, contacts or connections in common can also be a valuable manner to open the discussion around partnerships.
Bear in mind the 20/80 rule, especially if you intend to have many partners: only 20% of your partners will bring you 80% of the total value. Allow yourself to be selective by choosing the partners that you feel can support your strategy. Keep also in mind that many “potential company partners” may be very excited to talk about the partnership at first, discuss the broad terms and even start defining the strategy. But then you don’t hear from them ever again – their enthusiasm has faded or they’ve moved on. Don’t take it personally and stay focused – it’s not because this partner disappeared that your success can’t happen elsewhere.
Write a partnership agreement
Now that you may have found your new business partner, your partnership requires some formal documentation before being established. It is important to write the terms of your partnership down to ensure your continuous road towards success and overall growth as an early-stage startup.
Remember to keep this contract simple, short and crystal clear. No need to plan on a several-year span, 1 year is enough and give you scope for amends later on if necessary. Plus, you never know – your partnership might need to be revised periodically.
Determine the costs and the structure of your partnership
Usually, with any partnership, costs and ability to reach certain goals are involved before initiating the work. You might have to provide your partner with a certain level of technical resources or tools, guarantee quality standards or a minimum of existing customers. Although it might feel like a huge commitment, essentially, you’re investing in your company’s growth.
Furthermore, partners can introduce your startup to new potential customer segments. Remember that it’s still better than throwing money out the window and wasting your time on unreliable and expensive marketing strategies. The right partnerships bring new business without the investment it would take to create and market new products or services of our own.
Your partner’s resources are highly valuable and together you should define your structure, customer reach, funding, tools, and campaigns, so you can predict both your financial outcomes. Ultimately, whatever the resources, metrics, areas or operations at stake in this partnership, it is your opportunity to show that you’re committed in the business and to ensure the financial health of your business.
Take the case of an e-commerce platform selling website services, for instance. As your strategic partner, by introducing you to their customer database, the company can bring your products to new customers and generate results only you can offer. In return, you can promote the products you want to amplify, so both businesses enjoy the same benefits and generate growth revenue smoothly.
In terms of structuring your partnership, you should always expect to become a part of the essential areas of your partners’ operations. Whatever is required, you have to be flexible. Some partnerships imply much more structure and a higher level of detail, which involves negotiation. Here, you may want to implement a commission for every sale executed through your partner’s network, which would make sense to keep your business partnership going.
Major global tech firms happily welcome partnership opportunities especially when it’s to partner with early-stage startups, as combining skills, resources, tools, values can form an open path towards achievements and success. Partnerships are here to support what you’re already doing, by filling the gaps where your startup might be lacking, and for the well-established companies to benefit from your statement technology and vibrant internal culture.