If you’re about to approach a larger company and propose a partnership, stop now, and ask yourself the following questions:
- What are you bringing to the table for the potential partner?
- How can you help them increase their revenue?
- Does your startup have something of value that they need?
Startups can benefit immensely by partnering with bigger companies. Larger companies can give them channel reach and a more powerful engine to drive sales as well as increase clout with prospects. But what does the larger company gain? Why should they partner with you?
To successfully forge partnerships, startups must look at the opportunity through a specific lens in order to motivate target partners and make it a win-win for both sides. This takes homework. Before you make the first call, be sure to:
1. Identify strategic customers and technology gaps
Who are the most important customers to the potential partner? The larger and more strategic a customer, the higher value that customer will be to the partner’s business. Look at these key customers and see whether there are some gaps in what’s being delivered to these accounts and whether your startup has the ability to fill them.
For example, let’s say you want to partner with a large cloud storage vendor with a very horizontal solution and your technology has a vertical industry-specific or role-specific use case (e.g. legal, human resources, marketing, or sales). Research a large law firm that is a customer or potential customer of this partner and target that firm to understand what’s needed to “fill out” the gaps in the cloud storage vendor’s solution. The gaps might be in compliance reporting, data privacy, data sovereignty, or simply an extra layer of analytics and control.
Whatever the gaps may be, if your technology can fill it, get the joint customer to try your solution and endorse it. If you can get a few such companies, even better. Go back to the partner sales team with case studies that clearly outline the opportunity. I guarantee that when you call on the partner, you will have their attention.
2. Leverage your core assets
As a startup, your most valuable assets are probably the technology, the IP, and your agility. You don’t have the depth of customer base or the wide reach yet.
How can you use your intellectual property to get the partner’s attention? With more IP, you have a stronger hand in partnership discussions.
If your startup has patents, you gain even more leverage. For example, while I was at Armor5, we had several cloud security patents, giving us leverage with partners who – although they might have the capability to deliver the technology – were less interested in doing so for fearing of running afoul of our patents.
3. Train, train, train
Once you have established a few joint customers and a compelling joint value proposition, get in front of the partner’s sales organization. Remember, the partner’s sales people are first and foremost there to sell their own products. Plus, if it’s a large partner, they likely have tens if not hundreds of partners trying to get the attention of the sales people.
As a startup, even with a few joint wins under your belt, if you don’t develop compelling and timely sales training materials and get — and stay – in front of the partner’s sales organization, you will not be successful. But once you catch the attention of a few good reps and help them close deals successfully, they will become your internal champions. In the early stages, when you are trying to get the partner’s sales organization’s interest, consider running a few sales promotions or spiffs – these are very popular and help drive the right behavior from the sales organization.
It can seem like a one-sided deal when startups approach larger companies regarding partnerships. Startups need to take the time to research what value they can offer potential partners to get their attention and interest before reaching out to successfully counter any asymmetry in terms of what they want and what they can offer.
Suresh Balasubramanian is CEO for LiveHive, Inc. He has more than 20 years of operations and senior management experience in the software industry. Before LiveHive, he served as CEO for Armor5, and GM worldwide at Adobe Software.