These 2 Start-ups Rock at Strategic Partnerships
One way to help your start-up grow faster is to work with an established company. Partnerships can provide credibility for customers (as well as future investors), and create new sources of revenue.
But making a great partnership is no easy feat; big companies often have different cultures and values than small ones, and work on projects of different scales.
How can your company benefit from the social proof of acceptance by a large player, and still keep that start-up edge? New York City's Bespoke Post, a monthly subscription curated package service for men, and Baltimore's Parking Panda, a service that helps consumers find private parking, shared some of their best secrets.
Bespoke Post, launched in November 2011, was created by Kellogg Business School friends Rishi Prabhu and Steve Szaronos with the concept: "A box of awesome," according to Szaronos. "We're helping you become a gentleman, one box at a time." But this year, the marketplace for curated boxes is getting crowded. So Bespoke Post has tried to make sure it differentiates its offering from the pack by making strategic partnerships.
Make Sure Partnerships Align for Everyone
Bespoke Post set up its first partnership with Diageo, the maker of premium spirits such as Tanqueray, Captain Morgan, Johnnie Walker, and Ketel One. Its February box had "all the tools you need to start a bar at home," including a bar spoon, shaker, strainer, jigger, and bitters. It also included several videos from expert mixologist Elayne Duke. The partnership aligns Bespoke Post's interests (in providing quality products to customers and its desire to sell more boxes) with a brand that wants to reach an audience to promote in-home usage. While Bespoke Post can't ship spirits, the educational component of teaching men to make high-end cocktails to encourage future purchases helped convince Diagio to partner, according to Szaronos.
The company also just launched its first media partnership, as their box will be featured in a spread of "Summer Essentials" in June's Details magazine. "The heart of the partnership is the box and what's going in it," said Doak Sergent, associate publisher of Details. "This is representative of Details's constant focus on innovating and piloting new concepts. For our readers it is showing that Details is new and interesting, and for advertisers, it lets them be innovative and puts them in the hands of a curated audience of guys who are affluent and style conscious." The spread (and box) will include a linen beach blanket, sunglasses, a beach game, and shampoo from Malin+Goetz.
Selling a Large Company Requires Great Presentation
Why did Details take the pitch from Bespoke Post? "Presentation is everything–fake it until you make it," said Sergent. "The more put-together your materials are, if you have a mock-up or great visuals, that is really important. If you're in the start-up mode, you forget that in big companies people do things very fleshed out, and there may be tougher filters or higher hurdles than in your start-up."
He continued: "You may visualize your concept, but your picture is worth a thousand words. First impression is everything. And being able to articulate what you're doing concisely gives people confidence in your abilities and lends credibility."
Be Accommodating to the Larger Player
Parking Panda's goal is to help people find local parking from their phone or computer, and reserve spaces. It also helps property owners rent out their driveway or lot. Pricing varies based on proximity to destination.
"The original idea was AirBnB for parking, and no working with garages. But we realized we wouldn't get coverage of cities," according to co-Founder Adam Zilberbaum. The business model itself has matured, and now Parking Panda works with partners such as Federal Parking, a 15-year-old parking and transportation management firm in Maryland and Washington, D.C.
How did Parking Panda sell Federal Parking on the concept? "We did it as a pilot in one garage, and there were obstacles, but Parking Panda was good about hearing us out and tackling the concerns. Our different garages have different systems for entry and exit, and they did work to accommodate that special need," said Douglas Logue, Federal's general manager for Baltimore.
Logue sees Parking Panda as part of the youthful "trend of Groupon or LivingSocial-type services. Drivers buy online ahead of time and save a few dollars, and it provides us a new revenue stream." Federal Parking's direct access to Parking Panda's founders, as well as great flexibility on the part of the start-up, were additional factors in deciding to work together. "You can tell a lot about the kind of company and kind of people when you're dealing with the principals," Logue says.
The Best Game is One in Which Everybody Wins
"It has turned successful fast," said Logue. "Our clients can pre-pay on our own site, but Parking Panda is just a complimentary way of getting the word out. Free advertising for them and for us." Today, the companies work together at four parking locations.
Bespoke Post has also enabled the win-win. Since working with Details, Szaronos says: "Shipment volume is starting to get bigger and we are able to prove our value. For us, it helps give us legitimacy. We have a head mixologist who travels the world and we are bringing her to our customers–that lends us credibility."
What's more: Bespoke Post reported 200% growth last month, following solid growth each month since it has started. How's Parking Panda doing? It has just announced plans to expand into Philadelphia and San Francisco.