Most partnerships are not worth pursuing for startups. Startups should not get overly excited about what other companies will do for them. Rarely do partners actually move the needle for a startup, in distribution, co-marketing, co-sales, etc.
The exception I’ve noticed is when a BigCo’s customers have real needs that the BigCo does not provide and that their customers require in order to take full advantage of the BigCo’s solution. I’ve written before about some of these situations in which startups in Atlanta have ridden a platform advantage to success.
For instance, Google Apps customers need help migrating their emails and documents from Microsoft to Google. Companies like Cloud Sherpas in Atlanta stepped in and fulfilled a vital element of the overall solution for Google’s customers.
Another example is Blinq Media which became only one of 5 partners to sell advertising for Facebook.
In our market, the accelerator chip manufacturers’ customers need to move their applications onto the new hardware. This code rewrite is difficult and companies like ours play a vital role in ensuring success for the overall solution.
When BigCos partner with startups to provide a better overall solution, I have seen two different approaches:
- The shotgun approach: The BigCo creates a landing page and lists every company (often one-off consultants) that raises their hand to say they can help. These lists grow overly long and confuse customers more than help. Also the best small company partners get drowned out in the noise of the list. It spreads the market opportunity around among overly many companies and keeps everyone small and weak or weakly interested. It is a losing approach.
- The targeted nurturing approach: Like the Google Apps and Facebook approaches above, the BigCo limits their partners to only a few vendors (2 for smaller markets and up to 5 for bigger markets like those two examples above). This narrows the choices for the customers and provides a tractable solution space while still fostering competition among small company vendors. Also, those in the pool are enabled to grow big and strong and strongly interested.
If your startup is working with a BigCo that has a tendency to be a little too open to their partnerships, it might be worthwhile to explain to them the difference between the losing shotgun approach strategy and the winning targeted nurturing strategy.
What are your thoughts on winning strategies for partnerships with BigCos?