09.20.06

Partner with large companies

Posted in Technology Ventures, Events at 1:47 pm by Ray Wu

As a startup, there is a tendency to wonder when and how to partner with a large company like HP. Since I am speaking in a SDForum event this afternoon on this topic, here are my thoughts at this moment

• Know your objectives well. Understand what exactly you want to get out of this partnership. Is it marketing, sales, OEM, joint R&D, investment, or M&A? Once you know your objectives well, it is much easier and clearer when you communicate in the discussion

• Study your potential partner. This applies to both the organization and product areas. Once you clearly defined your objective, know how the other company is organized. Who are the decision makers, influencers and your champions in the company? This reminds me of a good book called Selling to the Top which seems to apply the same principal even though it is mainly written for the sales. Try to ping down the organization chart and measurements. Nothing waste more time than working with a person whose goal is not aligned with yours. In addition, know the product areas. Don’t come into a large company and try to indicate you want to partner on everything because it just does not help whomever you are working with to focus and get the results out quickly.

• Consider timing. If you are a small startup and do not have the man power or the engagement bandwidth, don’t start the partnership dialogue unless you know the key executives there. Even if you know the key executive who is willing to sponsor you, you still need to put enough financial and time allocation to this endeavor because anything it normally takes a while to get something done.

• Understand win-win. Understand what makes your partner excited: is it your technology, your joint sales potential, your influence in the community, your brand and reach, etc? Partnership is just like selling. Think from your partner side, similar to a buyer, on what he needs. Verify your assumption with some of your connections. I see a lot of companies coming in, made the assumption and just miss completely on win-win.

• Think about the sequence. It might be worthwhile to start in the field than doing corporate level engagement to show the engagement process is working, and there are some joint successes. Again, it comes back to know thy strength. Unless you are somewhat on the equal market footing, it is better to start small and grow the relationship into something big.

• Know your competitions. There are many ways to solve a problem. Who are your competitors in the space? It is likely your partner has already studied the market and may even engage with other companies. Present well on your unique offerings and advantages and what you can offer that beats out the competitions. I don’t like when people tells me there is no competition. If it is true, then it can be 3 scenarios: 1) bad market no one wants to go into 2) you don’t know your market 3) you underestimate players in the adjacent market.

• Protect your IP. Partnership on both sides needs to think about protection and disclosure. Startups tend to think they are more at risk. Actually, it is not true. Large companies are equally worried about getting into sued. It is always better to start with non-confidential information and sign NDA if there is a need to get into details.

More later, too much typing already….

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