Minimum Viable Partnerships

By December 2, 2013blog

Over the years I have seen over a hundred sales/reseller/biz dev partnerships come and go. Some were seemingly huge, with big brands behind them. Most were small-to-medium. But ALL felt like very promising ways to grow the business. I’ve spent and watched gobs of money and energy on customizing our products, taking valuable time away from core products, and even hiring extra folks to staff the waves of new customers that would soon come.

Some examples:
Adding a product link on every page of a partner’s site with millions of visitors a month. 
Partnering with an event directory site that listed hundreds of thousands of events that could send event organizers to our event registration software.
Partnering with the largest seller of college newspaper advertising to resell our college advertising product
Partnering with the largest financial services company in the world to offer an easier way for their business customers to collect from their customers

Partnering with a huge consumer publishing site with millions of visitors to run a contest to use the product.  
“If you build it, they will come” kept ringing in my ears… stealing millions of dollars of resources away from my core product and towards this vision of a more fruitful EASIER future via these partnerships. 
Not ONE out of one hundred of these partnerships can I point to and say it produced a positive return on resources invested. But I still hold hope, year after year, partnership after partnership, as I wait for the one. We can’t give up hope, because partnerships are too much fun and there ARE plenty of examples out there where they have made the company a huge success. Like Microsoft & IBM, Apple & AT&T, in the early days. 
So what to do? A little partnership-worn and hopefully wiser, I NOW say let’s walk before we run. What’s the minimum viable partnership (MVP) we can test to see if teaming up actually produces any fruit for us? How quickly can we test the power of our relationship and how that translates with our customers. 
For example I recently heard about one startup looking to partner with another, even trade some equity, because they both imagined that the partnership of millions of emails of one partner would be a perfect fit for launching the other startup. I suggested that before spending days together charting out a master deal why don’t they email a small subset of the group to see what kind of impact they might be able to extrapolate. When they approached the partner about it, it turned out they only had 20,000 permissible emails, not millions. Certainly not worthy of spending days talking more about it or trading equity. 
Two of the most common push-backs I hear from potential partners on MVPartnerships are when partners want white-labeling, customizations, integrations, complicated rev-share agreements, and sometimes real capital before getting started. While it’s not optimal, most partnerships can be tested without having to have those. By putting an emphasis on doing a quick test to see if there’s any real demand/value, and THEN we’ll ALL know better how to design the partnership going forward.  It usually puts them at ease, reduces the upfront workload,  and more importantly causes everyone to be more realistic by testing our field-of-dreams assumptions first. Saves lots of money, resources, and broken hearts that way. 

One Comment

  • Dan Forman says:

    I find this MVP approach particularly relevant for successful startups because they attract an ever-increasing number of inbound partner requests. Vetting these opportunities takes time and typically consumes resources from other teams:

    – Product: does the partner offering complement or conflict with existing roadmap plans; how difficult would it be to integrate?
    – Sales: would the new offering remove friction from the sales process or add complexity; are customers asking for this?
    – Marketing: would promotion of the partnership align with the existing marketing calendar; how would it affect other partner marketing opportunities?

    Additionally, most of these prospective partners fail to frame the opportunity appropriately because they only focus on how it benefits them. All relevant partnerships start by solving a mutual customer problem first. If you get that right, new bookings and marketing opportunities will follow naturally. Beware the inbound BusDev opportunity that fails to bring a joint-customer to the table to validate your plans – whether the partner is an industry-leader or a two-person startup.

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