Startup Speed Dating
The success of a relationship depends on two things. First, both sides must share a common goal.
If you’re dating someone who hopes to settle down in her hometown with 2.5 children, while you’re drawn to a fast-paced international career, things may not end well. The same is true of a business partnership; if you hitch your startup to a company that doesn’t value innovation, you’ll quash your potential.
The Yin to Your Yang
Second, each side in a successful partnership must benefit from what the other offers. A small startup’s team is hungry and foolish; it takes risks, makes bold decisions, and experiments. Team members are good at what they do and remain dedicated to innovation. But without access to capital, they struggle to achieve their goals.
Meanwhile, a big company sees a market opportunity but doesn’t have the in-house expertise to take advantage of it. It needs to maintain its financial security, so the corporation benefits from partnering with a startup to develop an alpha product.
The benefit to the startup is obvious: The team gains the capital, customer base, and credibility to scale and succeed. The startup gets PR and marketing, and a big-name partnership makes it much more attractive to investors.
A Give-and-Take Relationship
What’s less obvious, however, is the benefit to the big company. The startup acts as a corporate accelerator, energizing the corporation with fresh perspectives and innovative thinking. The collaboration empowers both sides to become better at what they do.
My friend, Greg Merril, launched HT Medical Systems. Greg took a technology license from Immersion, and after a few short years, Immersion acquired HT for $42 million.
A similar thing happened to Hemang Gadhia, the founder of Condaptive. Hemang’s team was just eight months in when it developed an alpha product for Millennial Media. Things went so well that within two months, Millennial made an acquisition offer.
These partnerships bridged the gap between the supply and demand for financing and creative thinking. Both sides grew as a result.
How can you find your own corporate soulmate? Here are a few tips:
1. Evaluate Your Startup’s Culture and Priorities
Know yourself. Is your ultimate goal to be acquired, or do you want to grow your business independently? How does your team make decisions? Being self-aware helps you identify partners who share your vision and offer what you need.
2. Seek out Companies and Form Relationships
To find the perfect partner, be proactive. Go to events. Network. Find out which companies have values aligned with yours. While you’re doing this, build personal relationships.
Choose events that host big corporations that place a high value on innovation. SwitchPitch is an event being held this October in New York where large companies present their projects to startups, which have the opportunity to “bid” on projects they’re interested in.
Events like these give startups the opportunity to get to know the people inside a company and boost their chances of obtaining — and growing — a successful partnership.
3. Don’t Compromise Your Strengths
As a startup, you’re positioned to do things most big companies simply cannot by virtue of their size, structure, and culture. A good partner will maximize your strengths. On the other hand, a company that demands you do everything its way will stifle you. Pick partners based on an alignment of values and vision.
A mutually beneficial partnership can unleash your potential for innovation while increasing visibility, but the best relationships allow both parties to stay true to who they are. Stay hungry, stay foolish, and don’t settle.