People In Product
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People In Product

Product Partnerships: Scratch My Back…

Like in my last article, this one was also inspired by the People In Product community, but instead of a conversation on one of the slack channels, the conversation started on a live call (a check-in call held by the community every Saturday from 08:00 pm — 10:00 pm).

So the conversations were focused on partnerships and people were talking about all the partners they had integrated into their products and talking about how they dealt with these partners, but something that crept into my mind was a simple question; what exactly are product partnerships, how do they work and how can I implement a product partnership as a product manager?

What Exactly Are Partnerships?

In the traditional sense, partnerships are when two or more parties come together for mutual benefit, it could be in marriage, it could be in a business, or in a tag team match 🌚.
The point is people, partner up to achieve a common goal after agreeing to achieve that goal.

What Are Partnerships In Product?

From our earlier definition of partnerships, we can see product partnerships as 2 or more products working together to achieve a mutual goal. As far as there is a relationship between two companies guided by an agreement that ensures they both pursue their mutual benefit then it can be said for sure that it is a partnership.

The mutual benefit may not be the same for both companies, one company or product might be benefiting more but that depends on how much the partnership means to them.
Product A might want to just make money while Product B might just want an integration to ship a feature faster.

Why Do Companies Partner Up?

Partnerships can be a lot of work and the benefit each partner shares might be different and specific to their own goals. As stated earlier the goal of partnerships is for both companies to improve the lives of their customers and users but there are 3 key reasons why companies partner up:

  1. To co-build or to co-own a product that serves the same customer.
  2. To integrate one product's functionality into another so that the receiving product can ship faster.
  3. To leverage the customer base of a product to scale or deepen distribution.

To Build Together:
Companies may come together to build a product to target a specific customer. Although this article focuses on tech companies and digital products.
There are more popular cases where businesses in very distinct industries came together to release a single product. A good example of this is Versace and Rolls Royce teaming up to sell a Rolls Royce Phantom that had Versace interiors. It is a bespoke car that became the pinnacle of luxury.

In tech,we have actually had such rare cases and some of them are:

  • Airbnb and Flipboard: Airbnb is popular for enabling people to book homestays for vacation or other purposes. Flipboard is a news and social network aggregator where people can go and discover stories.
    Both companies came together to build Trips, it was all based on a co-marketing campaign where Airbnb customers could discover and upload new experiences as stories on Flipboard. They both decided to move above marketing together but to build a product and launch it in the market as one.
    Trip became a way for guests to connect with potential hosts that shared common interests so they could meet up to share these experiences. Flipboard would benefit from Trip from customers trying to discover new experiences and Airbnb would use it as a channel to get people to book more than just homestays, they could be booking experiences too.
  • Uber and Spotify: Uber is one of the most popular ride-hailing companies and Spotify is a music streaming platform.
    Both companies came together to create “Soundtrack Your Rides”, as the name suggests, it would be a way for Uber riders to become the DJ of their ride and they could connect to Spotify playlists while waiting for their ride.
    Uber would increase their customer’s satisfaction with the rides as they now have more control over their experience during a ride while Spotify would increase customer satisfaction and potentially more Uber riders would want the experience of being their own DJ and they would jump on Spotify.

To Build Faster:

This form of partnership have become very popular in industries like Financial Technology or B2C products. There are situations where a team may be building a product or feature and some components of those products would take a lot of time and resources to build, instead of building the whole thing from scratch they just meet another company with the same product to offer it to them as infrastructure.

Normally the company that needs the functionality would pay the provider of the tech. A lot of companies in Tech have been set up in that way, a good example is Flutterwave which partners with other startups by offering them the infrastructure to process all their payments. Instead of building from scratch and only building it for one product, companies can leverage Flutterwave’s technology and pay them a commission for every payment made.

What makes this different from just hiring the tech is that Flutterwave does not charge a subscription where the demanding party pays whether or not they use the product. They only pay when there has been a transaction.

A lot of times, these partnerships are called integrations and some examples of these integrations are:

  1. Twitter and Chippercash: Twitter is a famous microblogging social media platform with hundreds of millions of users globally and Chippercash is a popular fintech in Africa with about 4 million users and offers its users wallets for bill payment, cross-border payments and investments in stocks.
    Twitter launched Tipjar so that people can get tipped for their tweets but to do that, they needed a payment gateway or payment processor that would get the money to people’s accounts. The first version started with Paypal, but Paypal is not easy to set up in Africa. To enable easier access for Africans, Twitter partnered with Chippercash so that people could simply get paid their tips by adding their Chippercash tags.
    By integrating Chippercash into Tipjar, Twitter would not need to build its own payments system or wallets app. For Chippercash, it would also mean that customers become more satisfied as they have an extra option from which they can get money and because both parties(sender and receiver) need a Chippercash account, this would cause more people to open Chippercash accounts to take advantage of Tipjar.
  2. Flutterwave and Mono: Flutterwave is a payment infrastructure company that serves businesses and merchants globally. Mono offers reliable and secure open banking infrastructure in Africa.
    I particularly like this example because both companies are infrastructure companies and you may be wondering why one would need to partner with the other. The answer lies in the fact that they both do different things.
    For this partnership, Flutterwave and Mono came together to provide a “Pay With Bank” option where people could select it as an option to pay on the Flutterwave platform but it would be powered by Mono’s direct debit product. So if your card or other payment options do not work, you can access your bank app via mono and authorize the amount payable to be deducted from your account.
    The advantage for Flutterwave is that they do not need to build that payment method from scratch, if they did they would be rebuilding a core part of mono, a partnership would be cheaper and faster for them at least in the short-medium run.
  3. Bamboo and Drivewealth: Bamboo offers Nigerians easy access to the US stock market which performs better than the Nigerian secondary market and Drivewealth enables embedded investing by giving its customers access to different markets and assets some of which include the US Stock market.
    Bamboo does not have an SEC license to act as a broker for stocks and so cannot directly offer these stocks up for trade and being an early-stage startup it would be expensive for them to do this.
    To build faster, Bamboo leverages Drivewealth which is licensed to act as a broker and enables companies like Bamboo to give their users access to US securities.
    The benefit of this partnership with Bamboo is that it enables them to deliver their value proposition easily without needing to register with the SEC and act as a broker.

To Deepen Distribution:

You will find that a lot of the products partnerships we have discussed leverage each other to deepen customer satisfaction by creating new products or getting integrated into one another to extend functionality, but the most common reason why people partner is to tap into the customer base of a bigger product.

Partnerships like this usually involve a “Big Fish-Small Fish” scenario and this describes cases where there is a larger company and a smaller company.

Keep in mind that both companies might be equally large but the Small Fish in that scenario would be the product that needs to tap into the user base of the other product which we can describe as the Big Fish

Some examples of this kind of partnership include:

  • Mono and Flutterwave: Mono becoming one of Flutterwave’s payment options. Mono in this scenario would be the smaller fish trying to distribute their product via the bigger fish; Flutterwave.
  • Paypal and Flutterwave: Both companies announced a partnership that would enable Paypal users to pay Flutterwave merchants in Africa via the Flutterwave platform.
    Flutterwave takes advantage of PayPal’s 325 million accounts, but also Paypal gets a distribution partner in Africa with over 900,000 customers.
    It's not hard to tell who the Big Fish is in this scenario.
  • Spotify and Uber: In the case of the single product developed by both parties, you would find that Spotify would be able to leverage Uber as an expansion channel.
  • Botsurance and Kudi: Botsurance is on a mission to improve the state of insurance in Nigeria and one of the ways it intends to do that is by leveraging Kudi which has a mobile money agent network with about 50,000 agents who interface with hundreds of thousands of Nigerians daily. This partnership has distribution written all over it and the big fish, in this case, would be none other than Kudi.
  • GetEquity and WeFunder: Getequity is Africa’s leading crowdfunding investment platform. Wefunder does the same thing but on a much more global scale. The partnership enables investors in Africa to invest in African Based startups on GetEquity that also listed on WeFundr. It also enables GetEquity listed companies to get listed and funded on WeFunder as well.
    Both products are leveraging each other for distribution to different markets but we can say WeFunder is the big fish in this scenario.

Conclusion:

Partnerships are a great way to grow, they are the biggest and best step to consolidation in a growing ecosystem like Nigeria.

We can leverage other businesses to build our product and to scale the product. In some cases, a product partnering also led to its partners setting up shop in these countries. When the likes of Flutterwave and Paystack expand to other countries, you can expect their partners and customers to do so too.

I hope this helps you understand product Partnerships better, expect another article about executing partnerships.

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