Partner: When does 1+1=3
The amazing benefit of the startup ecosystem – especially in New York City – is that there are tons of incredible companies doing extremely innovative things, all day, every day. Many times, even more interesting concepts arise when you combine products, ideas, teams, working styles, or problem-solving processes.
That said, every proposed partnership is not always a perfect fit. With opportunity cost being one of the most important considerations for any team, you need to scrutinize every “Hey let’s do something together” request.
Sometimes it’s easy to spot what makes sense. Let’s say that I’m developing a large =-scale music listening service where, clearly, I need to establish content partnerships that will allow me to offer music to my customers and help artists increase their audience. On the other end of the spectrum, let’s say that I’m building products within a large media company. Frequently, I’d be approached by potential partners. Some might be offering to expand my social footprint or to offer tangential features around new products currently being built in exchange for the use of my brand in marketing material. Without a clear path to understanding how they will help meet my specific marketing or product goals, this could actually distract my team or worse, hurt my business depending, on the strategies used.
In my previous roles where I was working for a large media company with significant brand recognition, I often felt like I was approached by every newly-formed company, no matter how remotely they might have been related to my business. Typically, it was a clear win for them, using of our brand for validation, but frequently, not a clear win for us.
Here are ten key questions to ask yourself before embarking down a potential partnership path:
- Do your products and/or services actually fit together as well as the idea initially sounded over drinks? Try this litmus test: Draw out the relationship using a Venn diagram and try to explain it to someone outside of your team.
- So the idea seems to fit, but do you have to do custom integrations to test it out? What technology stacks do both teams work in and can they work together easily?
- What do your product roadmaps actually look like? Is there enough of an overlap on your long-term vision between the two companies? Does this matter?
- Many times this factor is forgotten, but can your teams actually work together? What are the styles of the two companies?
- Does the overlapping idea benefit both companies and in what ways? It’s ok if on one side the idea tests out a product concept and the other presents more of a sales opportunity. Just make sure it isn’t totally one-sided.
- Answer the question: Who cares and why? Is there really a market fit beside the fact that your buddy was able to convince you that this partnership sounded cool?
- Are you both on the same page with the internal and external messages? Have you tested these messages out?
- If the partnership is revenue-focused, what are you both bringing to the table? Think about both soft and the hard commitments involved.
- What does the PR opportunity look like? Can you make a big enough splash? If not, return to question number six: what’s the why?
- Map out the opportunity cost! Your roadmap and feature wants always form a longer list then you have time and resources for, so what are you sacrificing to do this partnership and is it worth it?!
Bottom line: think the proposed partnership through. Make sure you aren’t using the partnership to avoid doing the hard and focused work you need to do in order to realize the long-term vision for your product or service. Don’t distract your team from truly necessary work unless the value is there, and have some checkpoints along the way to validate that the partnership is working for both sides. And don’t be afraid to high five or hug it out and walk away.