The Power of Partnerships
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As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe NowI recently sat down with Hyde Park Ventures partner, Tim Kopp, and Terminus CMO, Sangram Varje, to discuss how important partnerships are to growth. Sigstr is fortunate to be partners with companies like Terminus, Hubspot, Salesforce and several others. In fact, we are building partnerships into every facet of our business strategy because we believe that being good partners and patrons in our ecosystem is a powerful and efficient growth driver – and because the right partners add tremendous value for marketers, our customer.
You can’t go it alone in tech. All technology companies, regardless of their segment, live in an ecosystem comprised of organisms of varying complexity. More mature companies in established categories can function at the top of the food chain, consuming smaller companies through acquisition, but startups are seldom if ever in a position to gain dominance through acquisition. It’s vital for the success of a startup to be able to play well with others as a point solution in a broader category – and the better you are at partnering and integrating with others, the more likely it is your company will be successful. Sage advice that I got from Tim Kopp when I was starting Sigstr was to "build your business on the shoulders of giants."
First and foremost – being an active participant in an ecosystem matters not only for your business, but for your category as a whole. Banding together with other individuals and businesses helps you become more resilient and immovable as the category becomes more crowded. If you’re doing things right, the category will no doubt become crowded, which is why it’s important to make careful, strategic partnerships that last and help you to stand out.
Your partner strategy needs to start in the bedrock of your product or service and permeate through every facet of the business, culminating in precise executive alignment on your partnership strategy. Having flexible technology that can leverage APIs is a great start, but the ability to maximize those integrations comes from executive sponsorship internally and externally. It’s also imperative to launch the partnership with a shared customer’s success story. Stories are what people remember and share, and it gives third party context to your partnership.
Your ecosystem is the sturdiest and most reliable growth driver for your business for two big reasons: brand and demand.
Brand Amplification – Investing in brand is expensive and, because it’s so difficult to measure, all the more risky of an investment. Partnering with companies in your ecosystem not only allows you to spread that risk over several parties, but it also helps to amplify your brand across them as well.
Demand Generation – Similar to brand amplification, integrating with other non-competitive companies in your ecosystem can not only provide outsize value to your product, but also grows your addressable market by sharing customers. The stronger your partnerships (and the bigger their megaphone) the more your demand generation efforts can be magnified.
Both of these things combined lead to increases in customer acquisition and retention, and the more integrated you are into your ecosystem, the more difficult it becomes to displace you. Developing these deep partner relationships isn’t easy though.
Partner relationships take a tremendous amount of time and effort and, as a result, represent significant gambles. Partner efforts are tough to measure and their outcomes are tough to predict. Every relationship is unique, so there’s no playbook to follow. And deep partnerships require a large amount of coordination from several disparate members of your respective teams, which is all the more reason to have a executive alignment on the partner strategy.
Ultimately, partnership math should always be 1+1 = 3. The easiest way to identify that is to think about what happens when you combine your audiences. You want your audience to mesh well with theirs, but you don’t want there to be too much existing overlap. Will the joint story you tell to this combined audience resonate and get them excited? Is the integration you’re creating going to create more value for everyone at a lower cost? Is a partnership something you feel you can mutually execute on quickly to bring to that audience? If the answer to these questions is yes- then what are you waiting for? Go make friends!
Dan Hanrahan is the founder and president of Sigstr.