If you attend any tech event or conference, you’ll find – surprisingly enough – startups pitching other startups on possible collaborations and partnerships. The upstart payment provider, for example, might pitch their solution to an e-commerce startup, even though both may be pre-Series A. It’s an elevator pitch to someone who himself is still practicing and perfecting his elevator pitch.
It’s hard to fault founders for this behavior. Partnering with other startups is low-hanging fruit. It’s the path of least resistance on a journey fraught with tension.
But some investors and other tech leaders scoff at such collaboration, finding it incestuous if not lazy. Founders, they believe, need to get out of the building in search of corporates and other large customers that can move the needle in deal size. Other startups, by this measure, just don’t cut it.
While there is some truth to this thinking – other startups should never be your primary target audience – it’s also misleading. There are some instances when you should absolutely find ways to partner with other startups, if only due to the simple fact that not all are created equal.
Let’s look at two examples on opposite poles of the spectrum. If you attend a Startup Weekend, your peers will probably not make the best possible partners. They’re still learning about building a startup and likely have no funding, or even a business model.
If on the other hand, you’re selected to Alibaba’s eFounder’s fellowship – as I was fortunate enough to have been – you should definitely be more aggressive about partnering with your peers.
By virtue of Alibaba’s selection process, you’re surrounded with some of the most promising startups in Southeast Asia. The co-founder sitting across from you today in class may be praised as the visionary creator of a unicorn by tomorrow.
You’ll definitely want to find ways to get in on the ground floor as a partner or provider of these industry-defining organizations while they’re upstarts. It’s tantamount to entrenching yourself with a future giant.
Go by growth
When working other startups, in short, you should vet by growth. Which of the startups in your ecosystem are likely to be high growth? Because as they grow, you will, too, and if you facilitate that growth in some way, they will look at you as a key strategic partner.
Striking these high-value partnerships with other startups is easier said than done. As the CEO and founder of StyleGenie, I’ve also occasionally fallen into the trap of trying to partner with startups too early.
If they themselves have yet to figure out the basics of their startup, there’s little chance they’ll figure out how to create a solid partnership with external partners. Collaborating with them later will work out better, when they are ready.
As I’ve gotten better at picking startups to partner with, the partnerships have become more rewarding. We recently partnered with Kumu, for example, a livestreaming platform in the Philippines already nearing a million users. StyleGenie’s stylists stayed on-site at Kumu’s studios to style their hosts in clothes that were in keeping with the latest trends yet still tailored to them.
StyleGenie, for our part, experienced multiple firsts courtesy of Kumu. Our logo appeared on several LED billboards in ads about Kumu, courtesy of their investor, Summit Media. Our promo code was distributed to tens of thousands of their livestreaming viewers, on Kumu’s in-house shows. And soon, we will be one of the first companies to sell through Kumu’s innovative e-commerce feature, which will allow brands to sell products through livestreams, ala Home Shopping Network.
I share my experience on partnering with Kumu as a challenge to other founders to strike similar deals. Though we may be eager to partner with other founders in the spirit of collaboration that presides over the tech ecosystem, we need to be more purposeful.
We need to evaluate other startups with the same critical eye as investors, both for your sake and theirs (collaborating with a founding team not yet ready will only be another distraction from what they should be focusing on).
Ask yourself: Is this startup likely to grow and grow fast? Is this startup likely to be industry-defining? Is this startup going to be one of our country’s flagship tech companies? If you answered “yes” to all these questions, as we did in the case of Kumu, you should absolutely work on a collaboration.
Partnering with other high growth startups can create a multiplier effect of several magnitudes because they are also treading new ground – by joining them, you will go where others have never gone before.
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