4 Partnership Secrets for Hypergrowth Businesses
Learn when to partner -- and when to walk away.
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"Partnership" is such a promising idea. It suggests stability, growth, a fresh stream of revenue. But navigating a partnership can be like navigating a minefield when you're a hypergrowth entrepreneur. Plenty of businesses will want to hitch their wagon to your star, and that can be good, but many of them will end up feeling more like a millstone around your neck than a profitable opportunity.
Related: 4 Tips to Go Further, Faster with Strategic Partnerships
Not that partnerships can't be great: You may already know that leveraging a partnership can cross-pollinate your respective audiences and enrich your pipeline.
But you may also know that an ill-advised partnership can be a black hole devouring time and resources. So, let's take a look at two hypothetical businesses for lessons on when to partner and when to walk away.
A Tale of Two Partnerships
In our first case, a business owner gets a LinkedIn request from someone suggesting a partnership. He doesn't know her terribly well and doesn't see any immediate benefit in the idea, but he's flattered by her praise and agrees on an arrangement. Before long, he realizes that his new partner's customer base doesn't sync up all that well with his business. Furthermore, she doesn't seem to be working as hard as he is to leverage the alliance and seems to see it mainly as an excuse to charge more for her solution. Even though he's invested considerable time and resources in this partnership, the implied value just hasn't materialized.
Our second business owner is more discerning. As someone who's at the helm of a fast-growing startup, she's accustomed to receiving invitations from strangers. She generally ignores those and instead looks for partners that complement her offering and can expose her to an ideal audience. More importantly, she looks for a partner whose solution is so valuable that she uses it herself -- which helps her determine exactly what it is her customers will experience if they do the same.
Related: A Guide to 3 Brand Partnerships That Jumpstart Your Startup
Once the partnership is under way, our owner manages it proactively, staying in close contact with her partner and exploring new strategies to leverage the alliance. Her team develops specific pathways to reach the new customer base, and she encourages her own buyers to try her partner's solutions. Together, she and her partner help take each other's business to a higher level.
So, why did one partnership fail and the other succeed? Here are four critical factors -- which one entrepreneur heeded and the other did not.
1. Define your goals.
Before you formally put a partnership in writing, write down exactly what you want out of it, whether that means revenue, an IP exchange or a joint customer list. Consider the "soft factors" as well, like culture and communication styles. If the partnership goes well, you'll probably be working together more than anticipated -- and it's important at that point to be sympatico with each other.
2. Demand value.
Let's be blunt: Most would-be partners won't have much to offer you. Even if you're flattered by their interest, you'll need to ask what their business can specifically contribute to your and your customers' success. Ask yourself how your base will benefit from this solution. If the advantage isn't clear, walk away. Another important criteria entails assessing how well the partner business takes care of its customers. The last thing you want is for your own buyers to become angry with you because you recommended a business that let them down.
3. Provide value.
Sometimes you'll see immense potential in leveraging a certain partner channel -- in which case you'll want to look attractive to them, too. The best approach here is providing hypervalue from the beginning. Instead of emailing a potential partner out of the blue, broker an introduction that casts you in a prestigious light. Be ready with a clear demonstration of the value your business can offer the partner's buyers. And once the partnership is under way, be sure to treat that company's customers like gold -- just as you would want them to treat yours.
4. Follow through.
Whoever coined the saying "No news is good news" was not a good business partner. No news is actually terrible news; silence and indifference have no role to play in a hypervalue organization. If you want to grow through true partnership, you'll need to communicate consistently and stay on top of things. Drive the initiative forward and be the catalyst of change, rather than settling in and waiting for new leads to flow your way.
If there's one growth hack that applies across the board, it's this: Partner with the business that already has the customer you want. Focus on value, yours and theirs, and soon your customers will see greater value in you.
Related: Before You Form a Partnership, Make Sure Your Bases Are Covered