Why your partnerships keep failing
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 specific observation offered on channel partnerships was based on feedback from CEOs, presumably from the VC’s portfolio companies. My intention is not to shoot the messenger, but to address the flawed argument inherent in the message.
First, let’s examine the argument. It tends to go something like this:
- Partnerships are too much trouble for too little value.
- My channel partners don’t drive enough revenue.
- We’re too small to play with the big boys. We’ll only waste time and end up getting crushed.
- It would have been faster and cheaper to do it all ourselves.
There are specific cases in which each of these arguments is valid. Far more often, however, they aren’t. Most failed partnerships are the result of bad strategy, poor planning and simple neglect.
Specifically:
You start with too little too late. Unlike your product and customer development efforts, you look at partnerships as an after-thought. You rush in without clarity and readiness. You don’t get around to building technology and channel partnerships until your product is in-market and the pressure is on to sell. Which means…
You expect too much too soon. You fail to realize that you’re building a sales channel, not hiring a sales person. As a result, you treat your partners like direct hires under your full control. You expect them to ramp up fast and start selling this quarter, which they won’t. Why? Because…
You don’t equip your partners to succeed. You don’t invest in the marketing and sale tools, support and processes to get your partners up and running and sustain their continued success. Or maybe you recruited the wrong partners in the first place, because…
You didn’t build a business case. You think success is a given because your product kicks ass. It’s not. You may have piqued their interest with product, but you’ll only build and sustain a partnership with traction and revenue. That requires attracting partners that see the upside, commit to do what drives results and will be held accountable should they fail. Still, even if you manage to attract the right partners…
You don’t know what good looks like. You never went through a planning process to determine which leading and lagging indicators matter, what the customer acquisition and revenue targets should be and why, or how you course correct if the results you expect don’t materialize. Often, that’s because…
You think your work is done when the agreement is signed. It’s not. In fact, it’s only just begun. The business press is littered with announcements of strategic alliances and other partnerships that never generated a single dollar in incremental revenue. You have to continually build, develop and manage partnerships, just as you do the rest of your business. Why did you think it would be so easy? Because…
You really just don’t believe. Not really. Maybe you’ve built and sold a company or two. Maybe you’re a rising star building your first startup. Either way, you’re convinced you’re better off alone; partnerships are nothing but trouble. But you’ve got pesky co-founders and investors pushing you to partner, so you’ll pay them lip service and smile to yourself when the partnerships quietly die. Finally, you can get back to doing it all yourself.
Whether you think I’m spot-on or way off the mark, I’d like to get your feedback. What do you think?
