The fallacy of partnerships is rooted in the dotcom boom. In those days, most startups didn't have a business model, so they blew smoke about "partnering" with big firms. (Surely, if a company partnered with IBM or Microsoft, it would be successful.)
To this day, whenever an entrepreneur uses partner as a verb, all I hear is "bull-shiitake relationship that isn't going to increase revenue." In the spirit of improving what has become a flawed process, here are my tips for the art of partnering.
Partner for spreadsheet reasons
The right reason to form a partnership is to increase sales or decrease costs. Here's a quick test: Will you recalculate the spreadsheet model of your financial projections if the partnership happens? If not, the partnership is doomed. You can wave your hands all you like about "visibility" and "credibility," but if you can't quantify the partnership, you don't have one.
Define deliverables and objectives
If the primary goal of a partnership is to deliver "spreadsheet reasons," then execution is dependent on setting deliverables and objectives, including additional revenue, lower costs, penetration of new markets, and new products and services. The only way to determine whether a partnership is working is to answer quantifiable questions, such as "How many more sales occurred because our websites are now linked?"
Ensure that the middles and bottoms like the deal
Some people believe the key to successful partnerships is that top management thought of the idea. They're wrong. The key is that the middles and bottoms of both organizations like the partnership. After all, they're the ones who'll be implementing it. The best partnerships occur when the middles and bottoms work together and wake up one day with a de facto partnership that didn't involve top management until it was done.
Designate internal champions
One person inside each organization must be the champion of the partnership. "A bunch of different people contributing to the partnership when they can" doesn't cut it.
Cut win-win deals
A partnership seldom takes place between equals. The more powerful side will be tempted to squeeze the other party, while the weaker side will begrudgingly accept such deals and try to get whatever it can. Bad idea. Bad karma. Bad practicality. If the partnership is a win-lose deal, it will blow up because concrete walls and barbed wire can't hold a partnership together. Only mutually beneficial results can.
Include an out clause
This might seem counterintuitive, but if one company in the partnership knows the other side can terminate the relationship easily, they'll work harder to make it successful. Frankly, if all that's holding the partnership together is a legal document, then it's probably not going to work anyway.
Men have a fundamental genetic flaw: the desire to partner with anything that moves. They don't care about practicalities and long-term implications. Don't bother asking men for their opinions about a partnership because they'll almost always think it's a good idea. Instead, ask women. You'll gain real insight as to whether the partnership makes sense.
Wait to legislate
After you and your new partner have reached a conclusion on the deal terms, you will then draft an agreement. This happens at the end of the process because you want all parties to be psychologically committed to the partnership first. If you start the drafting process too early, you're automatically asking for nitpicking, delays and blowups. Incidentally, if you ask for legal advice too early, you'll kill the process. The best way to deal with the lawyers is to simply say, "This is what I want to do. Just keep us out of jail while we do it." —By Guy Kawasaki, whose mantra is "Empower entrepreneurs." He is co-founder of Truemors, a managing director at VC firm Garage Technology Ventures, former chief evangelist for Apple Inc. and author of eight books—most recently The Art of the Start. Visit his company’s site, truemors.com.
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