Prompted by a recent guest post on StartupNorth, similar to statements I’ve heard time and time again, I’d like to offer some candid advice and a bit of tough love for early stage founders and CEOs regarding why your partnerships keep failing.
The success of a channel partner should be measured by the outcomes achieved for the investment made. In other words, did you get what you paid for or more? If not, how do you restructure partner compensation in order to do so? Throwing money — in the form of deal margin — at partners in the hopes of driving the right behavior is the wrong approach. Pay must be tied to results, just as you would for direct sales professionals you employ.
Pitching a new product to potential partners is a key part of getting a startup off the ground. It’s also a risk to be managed. How do you disclose enough to get them engaged and excited while still protecting your intellectual property?
In the course of negotiations, prospective partners often ask for some kind of exclusivity. This generally takes the form of an exclusive technology license for what may as well be eternity plus a year, or an exclusive right to resell your product in an overly broad territory; say, the world.
After an initial call and one or two follow-up conversations, you’ve secured a face-to-face meeting with the decision makers at a prospective partner. It’s your one shot to make a strong impression and sell the value of a partnership. You know your product cold, and you’re passionate about it and your company. You have reason to believe they will be too. So what could go wrong?