Thinking About Partnerships Before Product

Product is provocative, but partnerships are powerful.

Within two years, 80% of new businesses will fail. Of the survivors, another 80% will close their doors during the following eight years. Over ten years, that’s a 96% failure rate.

Facing down the actuarial reality, digital entrepreneurs keep starting up, driven by the ease of coding something up in a weekend, and the tales of hundred-million-dollar exits.

“If we build it, people will come.” If only it were that easy.

When we started GoSoapBox, the student response system that teachers can use to leverage the devices students already bring to class, our goal was to get something out there. We accomplished that, and with tech journalists buzzing about us, we were confident GoSoapBox would quickly reach escape velocity.

Whether it is through revenue, traffic, or signups, growth is a startup’s marrow, and sustained organic growth is to what we aspire. In retrospect, launching will be the easiest thing you do as an entrepreneur.

Rather than be consumed by questions of product, new entrepreneurs should be primarily concerned with arising to, and maintaining, sustained organic growth. Sure, a product is necessary at some point, but somewhere along the way every successful company requires a beneficial partner. As much as humans are social animals, businesses are too.

Investors

Investment partners and venture capitalists are handy because they have a direct interest in seeing their investments mature. Sure, the checkbook is helpful, but if you are struggling with anything, an investor will answer your call and provide advice.

Beyond financial support, investors tend to be well connected and can give direct access to whatever you need. We’ve all seen Shark Tank, a program where small business owners pitch their products to veteran entrepreneurs. While folks like Mark Cuban and Daymond John are intelligent and formidable businessmen, the reason they are so valuable as partners is that they can get you a meeting with anyone.

Development Partners

Your first customers are enthusiastic about your product. (If they are not enthusiastic, you may want to re-think who you are selling to.)

Rather than build something blindly, you can form a symbiotic relationship with your first customers by asking them to become development partners. Development partners get access to your daily builds, and while acknowledging bugs and limitations, provide steady feedback. They get something that solves a problem, and you get information that would otherwise cost tens of thousands of dollars in usability research fees.

Distribution Partners

Sales can be a time-intensive. With Conferences.IO, the audience response system for events and conferences, we typically do one-on-one demonstrations with prospects. This process helps us figure out if someone will be a good fit for our product, and has been tremendously helpful to that end. But, 60-minute demonstrations cannot scale without a dedicated sales staff.

To solve this problem, we look for distribution partners who show our product off, answer questions, and hand off to us someone who is ready to buy.

It’s like getting into a major retailer: You supply the product, they do the selling (incentivized because they get a cut of revenue), and you collect a check.

One great distribution partner can guarantee a company’s success.

Marketing Partners

In the same vein as distribution partners, a marketing partner will send leads your way. Regardless of whether you have a turn-key product or time-intensive sales process, this still leaves a bit of work on your end, but it is great to have your sales funnel topped off with leads.

Creating Barriers to Entry

Hacking something up in a weekend is a tremendous advantage of digital entrepreneurship, but that same advantage is also a danger — what’s to stop someone from copying your idea and stealing customers?

Partners can support your company’s position by creating barriers to entry for competitors. If you’re building software for tech-savvy lawyers to use and you get the biggest legal blog to sign on as a marketing partner, it’s going to be an uphill battle for a competitor to upstage you.