Partnerships with early stage ventures

“When is the right time to think about partnerships?” is a question often asked about early stage ventures. Often, in turn, the frequent advice is to first get your own shop in order, before thinking of collaboration.

Although there is some truth to this advice, demanding a fully validated business model before starting with partnership strategies is bullshit blanket advice. There are more nuanced ways to address early stage partnering risks!

My advice to early stage venture partnerships, or to established companies that want to work with early stage ventures is to sense-check the potential of a collaboration. Here’s some pointers for doing this, covering the biggest risks:

  1. Know your X-factor. You could have a technology, a hard to access user-group or community, and unique expertise that might be a resource for others to leverage. Scan for that something you have, which you can amplify, and which also has the potential to amplify someone else.
  2. Mingle with the right people to sculpt the collaboration. There are people with specific mindsets for exploration, and those with a mindset for exploitation. Either persona strongly impacts the type of conversation you’ll have about your partnering. The former might be blunt, and start with saying things like “it’s a joint venture or bust!”. The explorative mind is a better prospect for shaping the early stage venture collaboration. Seek out the people who are willing to invest the time with you in defining a joint hypothesis for the partnership, things to experiment on, and discover.
  3. Causality is king! Figure out a theory what the business value of the partnership could be. Define testable ways for how the partnership could change the customer experience in both partners’ business models! And remember, it’s never about the experience the partnership causes to you, making a splash in the media, standing besides a big name brand on a press release. It’s all about the experience the partnership causes to your customer.
  4. Keep money out of the equation. You don’t know what value the partnership creates yet. On top of that, a partnership works best for you when you can capture its value within your own business model. Build a narrative for an equitable business case, where both sides stand to gain from the partnership’s created value, and work from there. The money equation will reveal itself when you’re testing, and seeing how revenue from the partnership will actually distribute over both partners.
  5. Be prepared.  According to KPI, the law of partnership design says that for every 1 hour of making great ideas with your partner, you’ll need to spend 2 hours convincing your own team of their merit. Make sure you involve the right decision makers, and apply the partnership design process in a simulation before engaging with the partner. That way you anticipate many of the “yes buts” from your own team on design decisions. It shifts the process from a drudge of iterating on partnership meetings, to constructive creativity of iterating on partnership execution.

There is no clearly defined graduation moment for your business to start partnering. Play with partnering strategies as early as you think it makes sense to do so. Tools like the business model, and partnership canvas are made to explore such what if scenario’s. By applying them in a short strategy session with your partner, your team, or even just for yourself, the tools give you enough sense to determine whether you’re at the right time to partner, or to determine when you will be.


Keen to learn about innovating with early stage venture partnerships? Join us in the Partnership Design Masterclass on September 19th in Amsterdam.

You can also join the Partnership Design Linkedin group to interact with the Partnership Design Community.

What happens when product, and business development people join the same squad?

Product development, and partnership teams are critical for business value creation, and growth. The product development team is key for improving a company’s offer to customers. This attracts more of them, and can also increase value from the lifetime of each customer relationship. Partnership teams aim to achieve company growth; They’re like a SWAT team that opens access for other companies’ resources, and exposes the product to new markets.

Product, and partnership teams usually operate separately. This separation seems logical. Each team focusses on what they’re good at: creating product value, and driving growth. But in this article I’ll show how the separation of functions drives a wedge into the overall business value creation process, and how collaboration needs to change to resolve it.

Product, and Partnership: Better when they’re together.
Instead of looking into ways for improving partnership, and product development teams to function separately, lets take a look at what would happen if we just put these people on the same team.

Product, and partnership teams in tandem, generate more value, than they would separately. A great example of a company that has achieved this is Nespresso. By combining Nespresso’s capabilities on (coffee) product marketing, with the coffee machine manufacturing partners’ capabilities of channel marketing for kitchen appliances, Nespresso achieves significantly more leverage from the partnership than they would from just outsourcing manufacturing.

Another example is Tesla’s (former) partnership with Toyota. By jointly working on developing electric vehicle parts, and electric car manufacturing systems, Tesla learned about mass-production of cars. This was key for launching their famous Model S. So, by not only focussing on combining technologies in the partnership, but also utilising that technology in a new way of production, the partnership actually took product development to a whole new level for Tesla.

These examples show how transgressing product, and partnership team boundaries, broadens the scope for new business value creation. Neither Nespresso, nor Tesla would be where they are today, if they wouldn’t have looked at product development and business growth in an integrative way.

From marriage to divorce…
In a fledgling company you see that the functions of product, and partnerships, are combined within the same, small group of people: the same team. Often the startup CEO takes on both product and business development roles. In this situation, it’s natural to align the functions of product, and partnerships, and make product value creation and growth efforts click.

But the moment the startup starts evolving into a real company, the product, and partnership functions will branch off into separate teams. And that is where the seamlessness of their alignment is lost.

The product team starts focussing on its own resources, and existing product development roadmap, rather than looking out for ways to leverage their work through partnering.

Partnership teams will tend to focus on the existing product and finding partners for that. They have to work with what’s on the shelf, because they’re usually not in a position to tailor the product to growth opportunities themselves.

The upshot is that both product, and partnership people each start tweaking their part of an existing business model. They gradually lose the ability to operate jointly, and invent new ones in a concerted, fundamental ways.

Re-uniting product and growth.
What can we do to put the power of product, and growth back together again?

Firstly, it comes down to a joint understanding between both teams about the process that is applied for product development. Product, and partnership teams need to jointly define, and have visibility on priorities, as well as on the big questions that need to be solved to bring the product forward.

Secondly, the product and partnership teams need to start jointly experimenting with growth opportunities for the product, and make those experiments part of the product development process. It’s not sufficient to start searching for growth once the product is done. The product will also likely need to adapt to the growth opportunities that arise.

Thirdly, product and partnership teams need to start operating in the same rhythm of iterations in product development. This means that partnership teams should be able to shift with changing priorities of the product. The other way around, product teams should also be able to adapt to shifts in opportunity on the partnership end.

To support these 3 points of alignment, visual tools like the business model, and partnership canvas are really helpful. These tools enable all participants to step in and create the alignment that is needed to search for repeatable, and scalable partnership opportunities, that sync with the direction that the product needs to take. Once product, and partnership are able to apply rapid joint framing of priorities, and decision making on what steps to take, then the business value creation process is mended. The company will operate in the mode that is once did as a startup.


Interested to learn how you can reinvent your industry through partnerships?
Check out our upcoming Partnership Design Masterclass in Amsterdam

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