April 20, 2017
Get Big, Fast with Strategic Partnerships
Over the last four years, the food and beverage industry has grown an average of 2.3% annually. Only 0.1% of that growth came from the 25 largest food and beverage companies, while the remaining 2.2% was the result of 20,000 startups growing revenue by $17 billion. Incredible. Despite doing $8 billion in sales last year, Campbell’s (the food company best known for its soup) board and shareholders weren’t happy. The company wasn’t growing. There was no innovation. Something, anything, needed to change—but what? The Campbell’s team realized they had two options: Option #1: Try to out-innovate the startups by building new food lines and products to replicate their success. But, as a big company, they knew it’d be incredibly hard to compete with agile startups. **Option #2: **Instead of competing against agile startups or designing new food products, Campbell’s could _partner_ with these companies. In return, Campbell’s could give them access to their wealth of distribution, production, and funding resources. The company decided that partnership, over competition, would yield better outcomes. As a result, Campbell’s created a $125 million food technology innovation fund to invest in promising startups. By investing in them, Campbell’s would grow faster, as would the less-established brands just getting off the ground. So how can you implement this partnership approach to grow your company, no matter the size? Here are four steps.
1. Stick to your core
In the SaaS space, there’s been a shift from using legacy all-in-one solutions to creating best-of-breed tool stacks made up of the right individual apps for the job. You could say unbundled is the new bundled. The fastest growing companies do one thing better than anyone else, they make it easy to integrate with other platforms. This way, other companies are friends as opposed to competition. Zendesk is a legendary example of how partnerships fuel growth. The company came from a world of monolithic software made up of jack-of-all-trades, master-of-none support solutions that only worked in call centers and didn’t integrate with any other tools. Zendesk came along and said, “What if we built a beautifully simple user interface for support?” Once the Zendesk team created their solution, they approached Shopify (which was already growing fast) about a partnership. Zendesk realized that all of Shopify’s customers would need an easy-to-use customer service solution—the foundation for a mutually beneficial partnership. By focusing on providing an easy-to-use and easy-to-integrate customer service tool, Zendesk quickly developed a ton of partnerships, like Shopify, which helped the company grow exponentially.
2. Solve a problem
A few years ago, InVision wasn’t really on anyone’s radar. It was a small startup based in San Francisco looking to break into the scene. Instead of trying to add a million other features and tools to create an all-inclusive design tool, they decided to reach out to Photoshop to inquire about a potential partnership. InVision created a native plugin that would allow designers using Photoshop to easily live share directly from within Photoshop. Prototyping wasn’t something Photoshop was particularly good at, so it was a natural partnership. Fast forward to today: InVision is seen on billboards throughout San Francisco and is used by designers throughout the industry, thanks in part to this initial partnership with a major player. When creating a new product, the first question you should ask is, what problem is your product solving for someone else? If it’s not solving a problem, then you probably don’t have a viable partnership. In the case of InVision, the problem they were solving was Photoshop’s customers ability to easily prototype.
3. Start small
While InVision and Zendesk are two examples of successful partnership growth early on, it’s advisable to start small. Test the waters before diving headfirst into a potential partnership. There are a couple ways to do this. First, it’s important to do research and see if the partnership makes sense. If you’re considering partnership with a bigger company, take advantage of open APIs and try testing out the potential use case of your partnership. That’s what we did with Slack. We added the integration to allow us to automate messages through Autopilot. This integration eventually got back to Slack, and we were able to create a more formal partnership. Another approach to starting small is reaching out to the potential partner to see if they might be interested in co-marketing. This could come in the form of a webinar or blog post about how customers are using the two tools together. Ultimately, rising tides raise all ships, so what’s good for one company will likely be good for those around it.
4. Learn to say no
There may come a time when the opportunity to partner with a really awesome, innovative company presents itself—but it just won’t be the right fit. It may seem like a great idea initially, but, despite how awesome it sounds, it just doesn’t make sense. That’s when you need to say “no.” Ultimately, if the use case doesn’t mean anything to the customer, there’s no point in creating a partnership. The partnership would probably fail and wouldn’t have a cumulative impact on your growth. This brings us back to the importance of solving real problems. Make sure you’re solving a real problem through your partnership. If it doesn’t make sense to you, it won’t make sense to your customers. So many people hope growth hacks and an enormous amount of ad spend will grow their business. These efforts can help for sure. But in addition, consider going out and finding complementary solutions who have a customer base you would benefit from, creating something that solves a problem for both audiences, and building a mutually beneficial relationship for all parties involved. Plus, business is just way more fun with friends. Want to partner with Autopilot? Contact us. If you want to learn more about how the fastest growing companies aren’t doing it on their own, watch the original Souped Up: How to Get Big, Fast With Partnerships video.