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.

How to prototype, and test your partnership, before launching it; Shopify-Uber

Brennan Loh of Shopify, talks about designing the prototype for their partnership with Uber.

This is the way that many successful and innovative partnerships come to be. It’s not about the big idea, and the big name involved, and then having all the rest fall in place.

It’s about performing experiments to find out if:
a) there is really a fit between partners,
b) and if the value created in a partnership will actually have enough impact to each of the partners’ business models for them to remain committed.

Brennan describes how to do it lean. Start with a small project that could reasonably generate a small win. Only after trying a couple of things, and creating a series of small (and growing) wins, a model for collaboration is revealed that has significant impact for both.

The Partnership Canvas is designed to guide you through this particular job of partnership design and experimentation. First, it challenges you to find out whether your partnership idea has a fit with your partner’s perspective. Then, you perform a Value Check, and a Cost Check on your business model to define testable hypotheses to find out whether the benefits outweigh the costs for both partners.

Find out more on the Partnership Design process here.


Interested to learn more about using the Partnership Canvas for transformative business collaboration?
Check out our upcoming Partnership Design Masterclasses