How Startups Secure Valuable Partnerships
A partnership with an existing business can be a huge win for a startup. But just because a bigger, shinier company wants to be your new BFF, it doesn’t mean the revenue firehose is going to be aimed your way.
It’s almost a requirement these days for an up-and-coming startup to join forces with a slower, less-flexible, more networked company as part of an overarching sales strategy. Whether your startup offers a product or a service, high-tech or low-tech, hardware or software, gaining access to a bigger partner’s customer base, marketing reach, and industry expertise can advance your startup along its growth curve like rocket fuel.
Furthermore, the more strategic partnerships can create a new slate of future options for your startup — everything from access to new markets to investment to eventual acquisition.
But partnerships — and especially the pursuit of them — can suck up a ton of time, a bunch of resources, and an ample amount of lost revenue while your company ramps up for a book of business that may never materialize.
So here are some questions to ask yourself to help recognize when a partnership is real.
Where are you on the timeline of partnership viability?
A partnership deal, like any other transactional deal — be it customer, investor, or acquirer — follows a specific viability timeline.
Early Timeline: Until your company shows up on the “radar” of a few potential partners, no one is going to be reaching out to you with a partnership proposal. How your startup gets on that radar is unique to your business and your market, but having a lot of big splashy sales in a short period of time is usually the booster I work with.
Middle Timeline: Once your startup begins to show up on some of those radars, you’ll indeed get people lining up to partner with you. The problem is, these can be the wrong kinds of companies — in that your company can do way more for them than they can do for you. Oddly enough, that won’t stop them from proposing some crazily lopsided-in-their-favor partnership deals.