Knowing how to join forces with another business is a key factor in making any growing company successful.
A strategic partner can provide you with capital, or let you leverage their brand to give you more exposure. They could help you win business by offering services that you can’t, while you build out those competencies on your own team. When it works well, a strategic partnership can be just what you need to speed up the growth of your business.
The partnership between Hudson’s Bay Co. and tech firm True Fit is a good example of a partnership with mutual benefits. HBC partnered with True Fit to add the U.S. company’s fit personalization software to thebay.com. This gave HBC the cachet of being the first Canadian retailer to use this innovative technology. It also allows them to deliver a better experience to their online customers. In return, True Fit got the brand benefits of partnering with an iconic retail leader, and access to the Canadian market.
In the tech world, partnerships are often about getting to market fast, accessing talent and resources as an alternative to an aggressive hiring process. Here are a few valuable lessons in developing strategic partnerships:
1. Finding the right strategic partner is exactly the same as finding your co-founder or key hires. You’ll be working closely together, so it’s important to have a good connection. Don’t be afraid to trust your gut. If your instincts tell you that something isn’t right, even when everything looks good, it’s smart to be cautious.
2. Establish clear objectives. Making sure all parties are on the same page greatly improves your chances of a good outcome. It also gives you benchmarks for measuring a project’s success. Understand what you want to get out of a partnership, and have a rock-solid grasp of your partner’s goals. This will make sure that everyone is aligned and has the same or complementary visions.
3. Be honest about your own weaknesses and gaps. Trying to do too much at once is something we all experience, and it can be hard to let go. This is especially true when you’re passionate about your idea or product. But seeking partners who are experts in a particular area will free you up to focus on your core competencies. You’ll be able to focus on the critical activities that keep your business functioning.
4. Understand what makes your business unique. Having a clear grasp of your own intellectual property and the value you bring to a partnership will help you negotiate the terms of any agreement. It also helps to determine when you should work with a partner or do the work in house.
5. Do your research. You need to be confident that a partner can deliver what they’re promising before you enter into any kind of relationship. Ask your network for recommendations and look for businesses with an established track record. Always ask to see evidence of results.
6. Keep communicating. Once you’ve found a great partner, established a good relationship and figured out your objectives, don’t forget to keep communicating. Maintain contact with frequent check-ins to talk through any problems. This will keep confidence levels high on both sides, and means you can deal with any unexpected issues or changes swiftly.
Chris Eben is an investor, entrepreneur and startup community evangelist. He’s a partner at Toronto-based digital studio The Working Group, a Startup Weekend organizer and facilitator, and father to two little girls. You can find him on Twitter @ceben. Email chris.