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Optimising Startup Partnerships for Growth

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Justo 24 SymbolsThis guest post is written by Justo Hidalgo, co-founder of 24symbols – the platform for reading and sharing digital books. Partnerships have played a pivotal role in growing 24symbol’s business. In this article Justo describes the experience of working with one such partner, and the challenges and opportunities partnerships can bring.

Winston Churchill is attributed the statement “There is only one thing worse that fighting with allies, and that is fighting without them.” With this, the statesman crudely defined the challenges but also the absolute need of finding partners to work and grow – or survive.

Madrid, Spain. First months of 2013. 24symbols, the service created by my colleagues and I in 2010, keeps on growing, but not at the desired pace. We’re six on the team. We just launched the 24symbols Infinite UX version, following Pinterest’s design practices, and the feedback is wonderful. We are considered as one of the best cloud readers in the market, and new publishers come on board. But it’s not enough.

In May of that year we sign an investment round and, most importantly, a distribution agreement with Zed Group, a media company that started with two brothers selling a videogame in the eighties, and it’s now the leading distributor of digital content to mobile carriers worldwide, an animated movie producer, a value-added app and service producer, and an arts and technology university.

This partnership came because of one insight: we believe we’re quite good at designing and implementing a top class reading service; we are also good at engaging readers, and understand how to make a compelling proposition to publishers and other stakeholders in the publishing industry. But we needed to improve customer acquisition, big time. A partner that would enable us to access mobile carriers in more that seventy countries, to potentially put our service in the hands of millions of mobile subscribers, looked like a great move. Zed came to the same conclusion.

Eighteen months after this partnership, lots of great things have happened: we’ve launched in Russia, Guatemala, Colombia and Argentina; we are working on lots of projects for EO2014 and 2015, and our own 24symbols is on the way to reach one million users. And I’ve learnt a lot about working with strategic partners. I want to share my main insights, not on how to obtain partners (there’s lot of literature about it) but on the dynamics of a partnership.

The Honeymoon

A partnership is like a marriage.

It starts with a honeymoon, because, well, you just got married! In order for a newly married couple to succeed, you need to stay physically close to your partner. Someone from your team must always be close to your partner. Is there an office nearby? Even better, can they rent you an office inside of their company headquarters? It doesn’t need to be a full team office, but a place where part of your team can spend part of the week working with them. Of course, you can always arrange weekly meetings, but the serendipity happening when you walk towards someone while heading to the restroom who happens to be working on a project where your company would be a great match, is invaluable. From a stage development perspective, this helps advance the partnership evolution, and a deeper understanding about how your partner works.

You left the toilet seat up again!

After a few months, like it or not, both sides will start to complain about minor things. It’s ok, these are two disparate organizations and, specially if the relationship is asymmetric (e.g. different company sizes), the way things are done differs a lot. If things go well, partners get to accept each other, but it requires efforts from everyone. This is what Hilda Heady defines as the evolutionary stages of a partnership. For me, at this stage it is critical to be on the trenches with your partner. In a strategic partnership, the VPs and CxOs usually get involved. But while that is a critical step towards giving the partnership enough priority throughout the whole organizations, it’s the day to day what is critical. Find the people on the partner that are actually making things happening. Who is acting on behalf of you at your partner’s internal meetings? Who are their sales/marketing team members thinking on you? Go talk to them, engage them. This of course, requires a key action on your side.

You still love me, don’t you?

In partner relationships, having the same goal doesn’t mean rowing together all the time.

Partners should always have the same goal: creating value on shared clients, working together to create the best possible product, … but this doesn’t mean everyday tactics of, as I call them, subsystem priorities, are the same. There are many reasons (strategic, political, organizational, philosophical, …) why two partners may disagree regarding how to act on a specific issue. It is critical to fully understand each other’s motives, before getting into fights that are not good for your shared objectives. Just as couples who might love each other, but in different ways, partners need to find the common ground from which to continue growing together.

The warm feeling of seeing your kids grow up

Having kids is a great feeling and a typical outcome of becoming a couple. For a strategic partnership, these are the projects outlined and executed together. When a ‘child’ is born, the happiness is incredible. But then the challenges come: is it growing up as expected? Aren’t we hiding our own issues by focusing on their welfare? This is an important and often unseen problem, as projects push both teams to focus on the short term, on the urgent rather than important tasks.

Until the end of time, Mariah Carey-style

But, if things are done right, a startup should get the feeling that the partner is really helping growth happens, without really hurting the vision and mission of the project itself. And the partner gets the results expected, after so much work. That’s when you may realize that you have found a long-term companion. Or not 😉

 

This is an ongoing process, and we are learning every day how to optimise a relationship that is key to our growth as a company and a business. We haven’t gone through other stages like “Stop looking at that girl over there, you’re with me!”, or “Kids misbehave so badly I can’t stand it”, but I’ll surely return here if I ever find out how to handle them!

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