Startups and partnerships
04 Jul 2023DALL·E 2 with the prompt "C-3PO and R2-D2"
- I've been thinking about "partnerships" as an underutilised tactic to build and scale startups
- Why is this important today: everyone wants to do more with less (aka focus, efficiency)
- Exception to the "underutilised" comment: fintechs (unlicensed) partner with banks (licensed) - but that is enforced by regulation
- Regulatory licenses draw boundaries of what you can do or not do
- My hypothesis is that startups don't know themselves to be able to partner with others
- Without knowing "who you are", you can't lean on someone else, at least not without worrying about competition (you mix up complements and substitutes)
- How to know thyself?
- "Strategic clarity" is the end-goal: is there a framework that mortals can use?
- Licenses define what "you can do yourself", strategic clarity defines what "you should do yourself"
- My preferred framework to get this clarity: big vs small product, by Shreyas Doshi
- Your big product: what makes or breaks the value prop for your customers
- Your small product: everything else
- Example: Uber's (as ride-sharing) big product is "matching demand with supply", small product is "the mobile app"
- Which is why Uber could partner with Google Maps and offer Uber bookings inside the Maps app
- Your big product can change over time
- "Strategic clarity" is the end-goal: is there a framework that mortals can use?
- Applying this to partnerships
- Once you know your big product, partner with others to outsource your small products
- Chances are that your small product can be the big product for someone else (ideal partner candidate)
- Examples to think about (caveat: recalling from memory without research, might have missed nuances)
- WhatsApp Business API (WABA) x BSPs
- From the link: "BSPs are a global community of third-party solution providers with expertise on the WhatsApp Business Platform"
- Onboarding to WABA is only possible via a BSP, which is perfect for WhatsApp because it offloads customer management onto BSPs, thereby enabling WABA to focus on their big product = becoming a super app for consumers
- BSP's big product (e.g. for Yellow) = omnichannel conversations for support/marketing
- Stripe's partner ecosystem
- Stripe started partnerships (for growth, not regulation) with their 28th employee
- Examples: system integrators or dev agencies that "advise, implement, deploy, or offer managed" integrations built with Stripe APIs
- Common template for all infra players? Infra's big product = quality, reliability, scale; but (mainstream) customers want full solutions with bells and whistles on top
- WhatsApp Business API (WABA) x BSPs
- Since big product can change → partnerships are not permanent
- Partnerships can open future product opportunity: "a marketplace of partners"
- My hypothesis for the recipe of partner marketplaces: enough number of partnerships + mature interfaces for partner engagement