#2 — How to partner with a corporate — a conversation with 3 experts
Startup-Corporate Partnerships in Africa: Beyond The Deal
This is the second essay in a three-part series on startup-corporate partnerships in Africa. Published by The Subtext in partnership with Founders Factory Africa.
I tried to approach this piece as a list of reasons partnerships could fail. As mentioned in essay #1, failure largely comes from the many misalignments between startups and corporates. Identifying and closing these gaps should, in theory, improve the failure rate. Very quickly, though, I exhausted the available space — there are at least as many reasons a partnership could fail as there are companies in partnerships. Perhaps the question should be, “What makes a partnership more likely to succeed?”
To help with the answer, I had conversations with three former colleagues with deep experience in partnerships on the continent, and from whom I’ve learned a lot over the years.
- Bruno Akpaka is a full-time dad with 15+ years digital financial services experience across Europe, Africa, and the Caribbean; ex-MTN & Wari, currently Director of Strategic Partnerships at Migo.
- Patricia Ndikumana led partnerships at Wasoko, and was responsible for their expansion drives to Senegal, Cote D’Ivoire, and the DRC; she is currently Head of Customer Insights.
- Wiza Jalakasi is a technology operator with experience across 20 African markets; he was responsible for Chipper Cash’s Twitter tips integration and currently serves as Africa Market Development Director at Brazilian fintech, EBANX.
Let’s unpack the learnings below.
How to partner with a corporate
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A — Stay Informed, Stay Connected
Your corporate partner probably has more opportunities than they can address or even respond to. Pitches from startups big and small promising to help them drive innovation. So, the depth and quality of your network significantly influences your ability to close the partnership or even get things done. If the founding team does not have the required network internally, then recruiting someone who does should be a priority.
i./ Bruno Akpaka, Director of Strategic Partnerships at Migo:
“From the startup point of view, I would say it requires a lot of time and energy. While some startups believe that it’s a waste of time, it is absolutely necessary that they embed themselves into the enterprise culture [of the corporate]. There’s no business that will bring any kind of value, if, beyond the signature, they don’t also cross the bridge and try to better understand the people inside the corporate.”
ii./ Why does this matter? The reality is that companies are made up of people. And at the scale of a multinational, accomplishing anything is less about the direct effort you put in, and more about your ability to get the organisation to work for you — your ability to get people to want to work for you. Patricia Ndikumana, Head of Customer Insights at Wasoko:
“So it is about trying to understand what the environment is, where everyone is situated, what they’re trying to achieve. Also understanding the people. What’s the hierarchy? What’s the structure within the company? Who really holds power? You know, you’ve got the regional managers or the directors who you think have decision making [authority], but the reality is you also have to work very closely with the teams that are going to execute. If you don’t have their buy-in, as much as you’ll have signed a document, there’s a lot of blockers that could still happen. You need to unlock that level as well.”
iii./ In a closely regulated sector like financial services, access to government and an awareness of the market’s socio-economic context can have real implications for your business. Meanwhile, in high-velocity sectors like FMCG, the market context could inform a startup’s approach to dealing with manufacturers, importers, and other players in the value chain. Patricia:
“You have to understand what are people consuming, how are they buying, what do they prefer?You’ve got certain countries that have a wide variety of products for consumers to choose from. So it’ll be tougher for you to push products. There, the relationship with the manufacturer is going to be one where they have a little more power. In other countries where there’s less choice, you have a bit more to play with.”
iv./ Within every corporate, there are usually people who have a similar drive to develop innovation, and/or whose work would benefit from the success of your project. You should find them and recruit them to join your cause. (Hint: they are not always the Head of Digital or Innovation.)
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B — Be Dependable: Deliver on Your Commitments
Large corporates operate with complex, interdependent systems — it is not easy for them to change direction quickly. If a corporate team is missing a critical input, then that function grinds to a halt, often with several knock-on effects across the organization. This is why predictability and dependability are highly rewarded by the corporate system. There’s an established ‘rhythm of business’ and it does not easily accommodate disruptions.
i./ Wiza Jalakasi puts it perfectly:
“The most important thing is to ensure you deliver on your commitments and the factors within your control. So if you sign a deal to say, okay, ‘MVP goes live in six months’, the corporate is a lot more rigid in the meaning of that six months. You know startup life, nothing ever happens the way you expect, and delays are common; but with corporates, there are very tangible consequences. It means there was a budget with resources allocated to that initiative. If you don’t deliver on what you’re meant to deliver, somebody, somewhere is going to look stupid in front of their boss. And that creates a strong incentive for them to not take any additional risk going forward.”
ii./ Even if an experiment fails, that is still a better outcome than missed deadlines or missing deliverables. While not ideal, an unsuccessful pilot is not the end of the world in a partnership. But failure to execute can often be. Wiza:
“So you say, ‘okay, we tried this thing with XYZ startup, they built everything, we deployed it, but then we haven’t seen the results and you know, this is why.’ That’s a much better story to tell a group of corporate executives than, ‘oh, we signed this partnership with this startup, but they haven’t been able to deliver. […]’ For the latter, your corporate counterpart will have to answer tough questions about the lack of progress.”
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C — Grow, Grow, Grow
i./ Failed experiments are useful because they teach you something about the world. That information has value to the corporate with wide ranging business interests. But you know what’s even better? Success. Partners who succeed get rewarded with more opportunities for success, including bigger business problems and better deal terms. When I worked in big tech, pilot programs, beta API access, and other partnership opportunities often went first to companies visibly performing well and driving impact for the business.
ii./ A startup partner that enables, say, $50M in revenue for a large corporate is not the same as one enabling $5M, is not the same as one enabling $750K over the same period. Such is life.
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D — Always Be Communicating
Effective communication is perhaps the most important skill to cultivate when working with people. In the context of a partnership, it enables you to stay aligned with your partner, properly manage expectations, and to learn valuable information.
i./ Wiza Jalakasi:
“Once you’ve delivered and the partnership is up and running, I think transparency around challenges is very key. Oftentimes, when startups sign these deals, they only want to report good news and what’s going well; it’s similar to that investor-founder dynamic. You just need to be very transparent about where the challenges are so that your counterpart can mitigate and manage expectations further upstream. No one wants to be the bag holder in the corporate explaining why they lost this thing that they shouldn’t have lost.”
ii./ For obvious reasons, the startup tends to adopt the communication methods of the corporate partner. But it’s also important to establish several informal points of contact across the organization. (The quality of information you have directly affects the quality of your decisions). Patricia Ndikumana:
“You can’t just be like, ‘oh, we’re meeting once a month and then I find out what’s happening in the business’ — no, no, no. There’s a WhatsApp group with most of the suppliers that we had. […] There’s emails, conversations happening all the time, and it’s someone that you have to be comfortable enough to pick up the phone and call right now and ask what’s happening?’”
iii./ To build that level of trust with your with your corporate counterparts, you have to act explicitly in their interest sometimes, without compromising your own goals. Patricia:
“It goes back to the relationship that you create with your person. They’re your informant and you’re their informant. If anything is happening internally, you need to be the one to tell them. ‘Okay. Something is gonna happen or we have to pivot, and it might impact your business like this.’ Of course, you’re not gonna go divulge your company strategy, but you need to be able to give them a heads up if you’re that close because you understand that it’s gonna impact the relationship moving forward.”
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E — Exception Handling, A Primer
When things go wrong in a partnership — and they will — it’s important that they are handled properly and with care. This is where you earn the majority of your reputation.
In computer science, an exception is an unexpected condition the computer encounters while executing a program. Because they rely on strict instructions from the programmer, computers don’t know what to do by default when they, for example, try to open a missing or corrupted file. To avoid a fatal crash, programmers try to anticipate exceptions, writing code that can handle errors gracefully. Their software would be perceived as poor quality otherwise.
i./ The first step is to anticipate challenges before they occur. Wiza Jalakasi:
“From the word go, contracts must speak to failure scenarios more comprehensively than they speak to success scenarios. Sometimes, I see these partnership agreements, and they always explore the happy path. Like, ‘oh, you know, party A is going to do this. Party B is going to do this. And then we’re all going to make money and sing la la la la.’ And they don’t speak about contingency. They don’t speak about failure to deliver. What are the paths to remediation? What are the acceptable delays?
All of those things are important for founders, especially because like they have uncapped downside when things go wrong. Messing up a partnership with the wrong partner can literally end your business. Whereas you’re just like, one division from their perspective. So even if your thing fails, it’s not going to kill the broader business.”
ii./ In a similar vein, you should research, anticipate, address, and monitor potential regulatory concerns about your project — especially in sensitive sectors like healthcare, education, or financial services.
iii./ In execution, start conversations early; use your understanding of the corporate organization to make sure things happen at the appropriate time. This includes managing expectations internally with your team. Patricia Ndikumana:
“Corporates also move slower, you know; there’s a gap in our growth expectations on both sides. So […] If you know that the turnaround time is, say, three months or four months, and you need this closed internally by this time, then you need to account for that […] What we usually do is we have joint business plans with our partners. The first one might be the most challenging, but after that it’s just renewal every year, and adjusting a few terms.”
iv. Stay aware of local cultural norms, including attitudes towards authority, younger people or women. Use strategic escalation to resolve challenges and align individuals to your shared goals — and don’t be afraid to re-evaluate the relationship if it is ultimately not driving the net value expected.
v. Offer an alternative path if priorities change; this shows consideration for the corporate partner’s investment and protects the relationship going forward. A startup providing automated QA (quality assurance) testing to a major telco in Africa once needed to pivot to an entirely new business line. While they had some traction with the existing business, it was increasingly clear that the model was not scalable long-term. Instead of leaving the telco in the lurch, this startup spun out a custom version of its SDK that worked offline; this enabled the telco continue to use and pay for the tool annually — even though it was no longer officially supported by the company. If the founder had handled that conversation carelessly, it would have impacted his reputation and made it more challenging to do any future business with the telco.
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F — Stay Flexible; Don’t Be a Pretzel
In the ideal partnership scenario, the startup is able to distribute its innovative solution while the corporate leverages [the startup’s] technologies, talent, processes, or customers to create new business value. Find a win-win and everyone’s happy. Right? Well, reality is surprisingly complicated.
i./ For startups and corporates in African markets, the aforementioned misalignments are exacerbated by the usual challenges of doing business on the continent — infrastructure gaps[1], mercurial regulation, shallow consumer markets, and so on. As Adia Sowho, Chief Marketing Officer at MTN Nigeria once put it, “in Africa, [the telco] builds a $50 ARPU (Average Revenue Per User) network for a $5 ARPU customer.” This means that empathy and flexiblity are required from the startup to find a partnership/commercial model that works for both parties in the long term. The initial engagement is just as much about discovering what’s valuable to build as it is about executing your plan flawlessly.
ii./ At the same time, especially at the initial stage, corporate partners may not devote the requisite high-level attention or manpower to make the best of a partnership. It would be risky for a startup to abandon its mission to build overly customized solutions for one partner. You spread the risk by partnering with multiple corporates at the same time — building a solution for the market, rather than being a software vendor. (In my experience, smaller corporates tend to have a higher appetite for risk and are less likely to believe they can build your solution internally.)
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Post Script
- Wiza pointed out in our conversation that one systemic reason partnerships don’t succeed is the high financial and regulatory cost of experimentation. This is especially true with corporates in financial services. For regulators who want to address this, they can reduce the perceived risk of experimentation via sandboxing — relaxing regulatory requirements in a controlled environment. A good example is Union 54 and Mastercard’s initial engagement with the Central Bank of Zambia to enable virtual card issuing; while the project ultimately had issues with the business model and chargeback fraud, it was a success from a regulatory perspective.
- The tech ecosystem has long advocated for increased corporate participation, both via investments and strategic partnerships. Ventures Platform’s push for a corporate-backed fund in 2018 alongside the US-Nigeria Council comes to mind, as well as several initiatives from CcHub, Catalyst Fund, Founders’ Factory Africa, and others).
- It wasn’t always obvious that there was much to be gained from partnering with a startup on the continent. When I first arrived on the scene circa 2015, startup-corporate partnership announcements were few and far between, with even fewer success cases. When they did happen, the economics of those deals usually reflected that reality. These days, the ecosystem is taken a bit more seriously as startups grow big enough to exert influence on the market.
- Like I said in essay #1, I suspect this topic will become more relevant in the future.
Thank you for reading! This was fun to put together and I hope you found it valuable.
Till next time,
Osarumen
Next Up: #3 How (Not) To Partner With A Startup
Foot Notes
- As an illustration, compare the strategic value of USSD to emerging markets telcos with the value of the App Store to Apple.
