Despite the driven, ambitious nature of entrepreneurs, there are still some things they can’t do alone. In getting a startup off the ground, forming strategic partnerships is critical. Whether this comes in the form of a massive corporation helping boost your startup’s visibility or an individual providing content, partnerships are integral to a company’s growth.
How do you ensure strategic partnerships are valued for both parties?
When structuring a strategic partnership, you have to first have a fundamental understanding of what value you can give to your partner as well as what value you can receive from a partner. The value exchange and the alignment of the deal needs to be as equal as possible for the partnership to be sustainable.
The definition of what is valuable for any particular party in a partnership is largely based on where an organization or enterprise is in its lifecycle. For instance, for a large conglomerate like Google or Microsoft, what is valuable is to be able to access new markets where they aren’t currently popular or well known.
For a small upstart media company that has captured the attention of a small but rapidly growing audience, what is valuable is to be able to distribute their brand to larger and larger audiences. In that context, the value exchange aligns perfectly. Google or Microsoft can partner with the small media company and rest assured that this small but growing auience will be aware of their brand. In exchange the small media company will be included in the large conglomerate’s marketing and distribution channels, achieving levels of awareness and new user access that will allow them to accelerate their growth and potential venue. In this example, both parties get what they want but are using their strengths as it relates to their partner’s weaknesses.
What do you look for in pursuing partnerships?
When looking at partnerships, we are looking at how we can leverage our brand and what we’re doing to benefit a complimentary service in exchange for that service offering us a platform to make more potential users aware of our service. The key hallmark is that the service has a larger audience than we do or that the service or organization has a concentrated audience that may be small but extremely representative of our core user base.
A great example of a smaller scale partnership is partnering with a well known and well respected individual in a certain field. Partnering with an influential photographer who has a large following on social media can help bring your brand to the forefront in a targeted way. IThis is a win on both sides.
How long do partnerships typically last for?
Partnership durations really depend on how successful the partnership is. There are phases of partnerships. The first phase is the test phase to see if the partnership is worthwhile for both sides. The next phase is the optimization phase where you look at how the partnership is working and see how to make it more beneficial. Once both sides feel like the partnership has run its course and the maximum value has been realized, both sides then shift priorities and move forward as needed.
What characteristics of a partner are most important?
Brand alignment is crucial. Your brands have to be complementary so that your respective audiences are not thrown off by the partnership. The next is experience. Try not to be a company or individual’s first partner. You want to make sure that a partner has successfully executed partnerships in the past and can comprehensively identify what was achieved.
Does the viability of a strategic partnership complement or hinder a typical sales pipeline?
Partnerships help both marketing and sales. Depending on how your company is structured and which metrics marketing vs. sales are responsible for, they can help one more than the other. For the most part, partnerships should benefit sales the most because they help accelerate pipeline growth.
How do you evaluate the success of each partnership?
Metrics. Before starting any partnership, both sides must have a clear notion of what “success” entails based on goal-driven metrics. Metrics can include revenue, new signups, website visits, media mentions, etc. Making sure these metrics are tracked carefully during the duration of the partnership is crucial. It also makes optimization easier because you can quickly identify which aspect of your business or service the partnership is impacting the most.