For startups and small businesses, the opportunity to partner with large companies can seem like an easy path to success. Your scrappy little enterprise brings the innovative solution and the sleepy, established behemoth brings capital and distribution. What could possibly go wrong? Unfortunately, it’s never quite that simple when it come to building successful and lasting partnerships.
The company I cofounded, BodeTree, provides a simple yet powerful financial management platform for small businesses, filling a need felt by over 90 percent of those businesses across the U.S. As a result, we’ve had the opportunity to partner with much larger and more established organizations, from major consumer software companies to large financial institutions, who are looking to better engage with the small business market. Some of these partnerships have been wildly successful, and others failed to get off the ground. Regardless of how they turned out, each one taught me important lessons about approaching and managing partnerships.
Present a compelling vision for the future
For startups and small businesses, it can be difficult to convince a large company to enter into a mutually beneficial partnership. After all, it’s usually the smaller company that generally has more to gain in the relationship. It’s not enough to have a complimentary product or to serve a similar market; you have to present a compelling long-term vision for how the partnership will serve both sides’ strategic goals.
At BodeTree, we showed one of the financial institutions we wanted to partner with how we could revolutionize their digital banking strategy and helped them understand what that could mean for their organization and the industry as a whole. It wasn’t the features and functionality of our product that convinced them to partner, it was the shared strategic vision we presented.
Our approach was heavy on the visuals and focused on boiling down the message into two simple diagrams that illustrated their current market position and where it could be post-partnership. We were careful to present the images digitally at first, introducing the concepts as we spoke so that the partners in attendance were forced to focus rather than skipping ahead in a printed document. Only after the meeting was over did we circulate a simplified print version of the diagrams to the attendees.
Remember that time is of the essence
Large organizations have two speeds: slow and slower. If you sit back and let the other side drive the process, chances are that nothing will get done. Even worse, constantly pestering your contacts on the other side to move forward is annoying at best and potentially damaging at worst. So how do you get your partners to take action? I’ve learned that the only way to get things moving is to create a genuine sense of urgency.
To do this, you have to understand your partner’s organization and culture and find ways to focus on what matters to them. For BodeTree, we learned this when we realized that many of our partners were facing regulatory pressure to better serve small business. We were able to frame our conversations in the context of this pressure and use that to drive action.
Be realistic, but don’t undervalue your contribution
Finally, it’s all too easy to undervalue your company’s own contribution to the partnership. It can be tempting to give too much away when negotiating the economics or workload of the deal. Remember, if you’re having partnership discussions, it’s happening because the other side sees value in what you do. Outlining reasonable expectations and maintaining the value of your contribution not only ensures that the partnership is equitable, it also signals to the other side that the relationship is something that they should be excited about. This doesn’t mean that you have to have a signed agreement right off the bat. Instead, it’s a function of how you present yourself, your company, and your product. Projecting an aura of confidence and value goes a long way in helping to guide the relationship down the right path.
As an emerging company, it has been incredibly important for BodeTree to seek out partnerships that can be leveraged to dramatically accelerate our growth. These “moonshot” moments have helped us to refine our product, marketing and customer experience in short order. By sharing a defined vision for how to serve small business, we’ve been able to partner with some of the largest organizations in the market today. However, we’ve learned firsthand just how important it is to make sure that the partnership is structured in such a way that it’s mutually beneficial and doesn’t bog you down. Applying the lessons we’ve learned to your approach won’t guarantee a successful partnership, but it will help to make sure that you’re moving in the right direction.
This article was written by Chris Myers from Forbes and was legally licensed through the NewsCred publisher network.