Entrepreneurs often enter business with a particular mindset of wanting to conquer an industry. But sometimes the best thing to do is to work with other companies, increasing the success of each.
I've mentioned before how you can make competitors work for you. One aspect I failed to list is that you can actually cooperate with the right ones.
For example, you might develop a service in which you provide the innovation and a large companies does the marketing and sales. That's what the firm Nottingham Spirk does, as Forbes explains.
The company, started by John Nottingham and John Spirk, recognizes that many large companies look to small outside firms to provide an important source of innovation. The two employ 70 people who have developed hundreds of patented products and tens of billions of dollars in sales, according to the company. Some of their hits include the Dirt Devil vacuum, Pepto-Bismol's dosage measuring cap, and the Sherwin-Williams twist and pour paint can. Oh, and the Little Tikes toddler cars, created for a company that wanted to do something in addition to making bedpans with the plastic-shaping process they used.
Nottingham Spirk makes its money in a number of ways. Either they charge hefty cash fees per month of work (upwards of $120,000), royalties on sales, or equity in a company. Eminently successful, they actually would have had a tougher time going up against any of the big companies they ultimately do work for because they'd have had to develop far broader expertise in numerous areas. Instead, they work with companies to get ahead.
I once wrote about partnerships in Inc. Procter and Gamble has for many years worked with smaller outside firms. Even with large staffing and financial resources, there is a limit to how many good ideas a company like P&G can develop, and yet it wants access to more opportunities.
Or there's the company Lightblocks (originally M.B. Wellington Studio) that makes colored architectural blocks out of a number of materials. CEO Mary Boone Wellington had a patent on creating color-laminate sheets that could be turned into blocks, but the process was labor-intensive. By partnering with Arkema, a chemical company known for Plexiglas, among other things, she traded her knowledge of color for their willingness to manufacture materials she needed, cutting labor in half, as she told me.
Whether you get a revenue stream, expertise, some manufacturing capability, or something else, partnerships can pay off in a big way, no matter how small you are today.