The six keys to successful business partnerships
Lessons in collaboration for both startups and established brands.
As almost every industry faces massive disruption, more companies are viewing the competitive landscape as an ecosystem, rather than as a group of disparate entities. In order to capitalize on — and not succumb to — the transformations in healthcare, energy, education and technology, businesses small and large must embrace collaboration as a recipe for success.
And, while much has been written about how startups and entrepreneurs can forge business partnerships with larger companies in order to enhance their status or raise capital, there is less guidance for more established brands looking to partner with startups. Still, it’s important that these organizations receive the same sort of “how-to” guidance so that both parties can maximize the relationship for their own purposes — and those of the greater industry good.
After all, when the agility and speed of the small meets the scale and scope of the large, transformation can truly take place.
Larger companies are beginning to realize that successful business collaboration with smaller, startup industry partners requires developing and promoting an environment of aspirational vision, creative thinking and uninhibited experimentation. Thus, larger companies are working to develop startup mindsets; inherently, startups are high energy, future-focused and fueled by change-the-world optimism.
But adopting this mindset isn’t always enough. In partnering with startups, larger companies must not only foster and feed a startup culture in order to break away from the status quo, but also to bring the best ideas to fruition.
Tips for startups looking to partner with a corporation
- Understand your value proposition
Be able to clearly and explicitly explain how your idea will help bring value to and advance the mission of your partner’s organization. Be ready to demonstrate how your partnership will drive their bottom line and lead you both to success.
- Focus on building relationships
Find an advocate within the business partner’s organization and win his or her trust. Although it’s important to sell your idea to the decision-maker, once you have advocates, you can empower these people to do the selling.
- Expect delays in signing the contract
As a startup, working at a fast pace is necessary for survival, but most large companies move much more slowly. The first example of this difference in speed may very well come in the process of contract negotiation. Prepare yourself for the delays that may come, exercise patience and use the opportunity to do your homework to confirm that you’re aligned with your partner’s long-term strategy.
Tips for corporations looking to partner with a startup
- Evaluate the market and market strategy
Is the startup you’re working with going to address a real-world need? Is the product or service differentiated? Do the market and product work together? The answer to all of these questions should be yes.
- Determine potential for long-term alignment
Once the startup is off the ground, what will the partnership look like? Does it benefit your long-term strategies and goals? In addition, given the startup’s resources, can it sustain a long-term partnership? Does it have all its eggs in one basket, a team on deck whenever things take off and access to funding beyond your support?
- Understand that innovation requires risk
Innovation is inherently risky, but without it, businesses both small and large would fail. Analyze the risks and benefits carefully, but understand that this partnership involves much less risk than that of completely revamping your business structure to accomplish the same goals.