lecture 7 partners 120411
TRANSCRIPT
Steve Blank
Jon Feiber
John Burke
Ann Miura-Ko
Jerry Engel
Jim Hornthal
Owen Jacob
The Lean LaunchPad
Lecture 7: Partners
2images by JAM
customer segments
key partners
cost structure
revenue streams
channels
customer relationships
key activities
key resources
value proposition
KEY PARTNERS
which partners and suppliers leverage your model?
who do you need to rely on?
Test Hypotheses: Key Partners
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What defines a “Partner?”
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• Shared economics
• Mutual success / failure
• Co-development/invention
• Common customer
But remember - you’re a startup
Why have partners?
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● Faster time to market
● Broader product offering
● More efficient use of capital
● Unique customer knowledge or expertise
● Access to new markets
Partners – Physical Channels
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• Strategic alliances
• Joint new business development efforts
• “Coopetition,” (cooperation between competitors)
• Key supplier relationships
Partners – Strategic Alliances
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• Reduce the list of things your startup needs to build or provide to offer a complete product or service.
• Use partners to build the “whole product”
• using 3rd parties to provide a customer with a complete solution
• complement your core product with other products or services
• Training, installation, service, etc
Partners – Joint Business Development
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• Joint promotion of complementary products
• Share advertising, marketing, and sales programs
• One may be the dominant player
• Intel offered advertising fees to PC Vendors
Partners – Coopetition
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• Joint promotion of competitive products
• Competitors might join together in programs to grow awareness of their industry
• Tradeshows
• Industry Associations
Partners – Key Suppliers
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• Outsource suppliers• Backoffice, supply chain, manufacturing
• Direct suppliers• Components, raw materials, etc.
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Startup mistakeStrategic alliances and joint partnerships
Not needed for Earlyvangelists
Are needed for Mainstream customers
Usually fail
Traffic Partners – Virtual Channels
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• Long-term agreements with other companies • deliver long-term, predictable levels of customers • “Cross referral” or swapping basis• Paid on a per-referral basis• Partners drive traffic using text-links, with onsite promotions, and
with ads on the referring site• Partners sometimes exchange email lists
Partnership Disaster: Boeing
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CollaborativeLooked great on paper.
Worst business decision of the 21st century
Mobile Location Based ApplicationsCollaborative Partner
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Managing partners - risks
• Impendence mismatch• Longest of partners schedule becomes your longest item• No clear ownership of customer• Products lack vision – shared product design• Different underlying objectives in relationship• Churn in partners strategy or personnel• IP issues • Difficult to unwind or end
Why Will a Large Company Partner?
• You give them a competitive “leg-up”• In sales • Or “halo-effect”
• You are on their technology road-map• You’re an economic opportunity for them
• potential customer of large company• can leverage their existing products and sales
• Change agent for the large company
You need to understand their motivation
Should I take an investment from a Large Company?
• They are interested in their bottom line, not yours• Their objectives are not to make you a large company• Who’s the sponsor? What’s the motivation?
• Needs to come from the business side• Not the venture side
• Try to get sales deals not investment• Or try to offer warrants based on sales success
Startup Partner Strategies
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• Don’t confuse partners for Earlyvangelists vs. mainstream• Don’t confuse big company partnering with startup strategy• Find the one that gives you an unfair advantage
– Air Supply strategy
• Recognize you don’t matter to a large partner
Team Deliverable for Next Week
• What partners will you need?• Why do you need them • Why will they partner with you?• What’s the cost of the partnership?• Talk to actual partners
• Summarized in a 5 Minute PowerPoint Presentation