There’s nothing new about entrepreneurs looking to build relationships with more experienced collaborators. It’s a tried-and-tested way that can bring benefits to both parties: the startup gets to tap into established expertise and find new routes to market, while the mentor often gains access to a much-needed injection of innovation.
Establishing Mutual Goals
Naturally, any collaboration needs to satisfy both partners, which is why goals should be fully aligned at the outset. If you’re looking to take your startup to the next level, it’s important to be candid about your aims: what do you have to offer, where do your strengths lie and what are your weaknesses? How could your proposition help your partner company to enhance their business?
Established companies need to remain agile to stay relevant, which means finding new markets, generating fresh revenue streams and diversifying their portfolio – partnering with a startup can be the perfect way to meet these objectives. For startups, the opportunity to build a reputation and accelerate growth through collaboration is often an irresistible draw.
The good news is that most forward-thinking organisations are open to the idea of mutually beneficial collaboration and there are lots of initiatives – often funded by governments or not-for-profits – designed to pair startups with funders or commercial partners. Corporate Venture Capital (CVC) is widely accessible, with more than, according to Venture Beat.
A good fit is often realised where the startup has a proposition that can improve the quality or operational efficiencies of a corporate partner. For instance, multinational drinks brandto create an innovative ‘smart bottle’ that has helped them to improve the supply chain and extend their anti-counterfeiting measures. The John Lewis Partnership has its own incubation division – Jlab – which offers startups a chance to launch trials and pilots and explore possible financial investment. by the retailer to help in its quest to reduce single-use plastic packaging.
The best way to get a good partnership fit is, to be honest about your expectations. Larger corporates may well be anxious about exposing their business to risk, especially as their brand and reputations are already established, while startups will be worried about losing control and having to operate within a less flexible infrastructure which may stifle innovation. Forging a productive partnership requires trust but it can unlock opportunities that would not have existed otherwise.
Five Steps Towards a Successful Partnership
Collaborations succeed where there is a good match between interests and expectations and where each party trusts the other to play their part. It helps to develop a partnering plan:
- Set your priorities. Think about the companies you’d like to work with and why. Any successful collaboration will need to be mutually beneficial, so if you have any red lines, make sure you’re clear about them from the start.
- Take a steady approach. The decision-making process can often take time in large corporates, so maybe suggest a small-scale collaboration over a fixed period of time to start with. If the trial works, you can always roll it out more widely, but you’ll have significantly reduced the risk for both parties.
- Show you can be flexible. If you can demonstrate that your startup can work within your partner’s existing framework of policies and processes, you’ll be more likely to succeed. The bottom line is that big business wants to explore new opportunities but will respond better to phased solutions rather than rapid change.
- Communicate. All parties must understand each other’s objectives and boundaries throughout the working relationship. Being clear on expectations helps to build better outcomes and avoid problems further down the line – especially if you’re jointly creating intellectual property.
- Agree on a realistic schedule. Startups are often much more agile and quicker to respond than their corporate counterparts. Only by acknowledging and accommodating the cycles, timelines and processes of your partner can you plan for realistic timeframes and outcomes.
Finding the Perfect Fit – a Case Study
Online business selling service Bizdaq has become the go-to resource for small-business owners who want to find buyers without the cost and hassle associated with more traditional routes to market. In particular, its online valuation tool has proved to be a big hit with vendors, as valuations are calculated using a unique algorithm that factors in real data from specific business sectors to provide accurate pricing.
To extend its reach, Bizdaq has recently become an integrated partner with small business accounting service QuickBooks – a collaboration that demonstrates the value of a well-thought-out partnership to both parties. The Bizdaq valuation integration with QuickBooks creates a seamless valuation experience. QuickBooks account holders can log in with their QB credentials to obtain an instant valuation report that utilises relevant data to generate the business valuation. It’s completely free to use.
Theis a great fit for QuickBooks: small-business owners are looking for resources that can help them to manage their businesses effectively and the app means that the right people can have access to a market-leading valuation tool. In this case, both businesses and their customers receive tangible benefits from a best-fit collaboration.
Some Final Thoughts
As with the Bizdaq/QuickBooks exemplar, collaborations are most successful where there is the opportunity to evolve solutions that wouldn’t otherwise see the light of day. Conversely, they fail where there is a misalignment of interests, lack of communication or a failure to build trust. Entering into a partnering arrangement isn’t without risk and there’s no guarantee of success but by making informed choices from the start and keeping lines of communication throughout, it’s possible to build a relationship that is much more than the sum of its parts.