Most startup CEOs focus on an organic growth strategy when first launching their business. This means utilizing existing resources and focusing on actions that can be controlled internally such as new product development as well as new customers and talent acquisition. While it is often the slower option for business expansion, it allows for more control.
However, organic growth can quickly reach its limits and startups must look outside their confines to remain or become profitable. So how do business leaders efficiently and affordably scale their startups? The successful CEOs engage in partnerships.
Here are five tips to help you develop business partnerships that result in more money and a better product.
Understand what the partner brings to the relationship
A strategic partnership connects you to groups that possess expertise you don't have. Understanding what you get from the partnership, what your partner gets and your combined strengths and weaknesses will yield benefits that can surpass your company's individual expectations.
The partnership between IBM and Galvanize, a workspace and education provider, is an example of this. Most recently, IBM worked with Galvanize on a new machine learning course to familiarize students with IBM's suite of Watson APIs. This partnership is so successful because we are both getting something out of it. Galvanize capitalizes on IBM's Bluemix cloud platform to reach a wider audience, and IBM takes advantage of Galvanize's data science and developer curriculums and deep community of students, startups and instructors.
Treat your partner as an equal
You should be looking for non-competitive, adjacent complementary businesses to partner with. And once you're engaged, treat them as your equal. This doesn't mean the partnership will be 100 percent fair. Ideally, you'll identify a partner who can bring more to the table than you with the expectation that they'll demand more to help you and your company grow. I've had times where I was the lower one on the totem pole myself. One partnership from early in my career forced me to focus inward to one of my own development teams. This specific partnership made me realize that this team was looking entirely at short term objectives with no solid long term purposes identified. I ended up blowing the entire team up and placing these employees on different longer-term projects which were at a greater benefit to my organization (and honestly, the partnership). Yes, this would have been the eventual result anyway, but having a solid partner point out an area of weakness on my team brought about a major change and adjusted our partnership to a more equal level. To this day, I think back to this partnership as one of the major lessons I learned early in my career as a CEO.
Start warming up your collaboration muscles
We all like to tout ourselves as great collaborators, but true collaboration on a day-to-day basis can be challenging. Be willing to collaborate in different ways than you have in the past. For example, you probably have your own style for interacting with people. If your partner doesn't respond to that style, you have to be ready to try the conversation their way. You never know when you might learn a new trick.
Know when to call in the big guns and when to cut the cord
Understand that in every partnership there will be disagreements. Know when to get legal involved from both sides or when to bring in a mediator to handle disagreements. And sometimes, this might result in the dissolution of a partnership. If you take time at the beginning of the collaboration to understand what the end goal is, this will come as less of a shock.
Dedicate a team to proactively pursuing partnerships
At IBM, we've hired a business development specialist who keeps an eye on Mergers and Acquisitions and manages the steady stream of requests that we receive. By installing a team focused on watching technology companies and products and surfacing the best ones for partnership consideration, we can cut through the noise and make better decisions.
At the end of the day, you should never stop searching for a partnership. As an avid consumer of news, I read columns and business magazines keeping one eye open for potential partnerships. If I see something that sparks my interest, I'll make contact appropriately, either through LinkedIn or via acquaintances. Even if that connection doesn't immediately result in a partnership, you never know how that new contact might pay dividends down the road.