Dan Martell - How to Pick The Right Business Partners

00:00:00.000 How to identify the right partnerships for your business.

00:00:03.560 That's what I'm excited to share with you guys.

00:00:05.060 In today's video, I'm going to talk about the four key aspects

00:00:08.300 of finding the right partners.

00:00:10.520 But before that, I want to share a quick story with you guys.

00:00:13.080 You know, I'm going to tell you I had probably one of the worst

00:00:15.960 experiences ever partnering with a company.

00:00:19.260 And at first, it was all great.

00:00:20.820 I think maybe if you've ever gone through this,

00:00:22.600 that's usually how it starts off.

00:00:23.960 They're great, they're fun, everything's awesome.

00:00:25.920 There's so much strategic alignment.

00:00:27.400 and you're like, yay, this is gonna be a great partnership.

00:00:30.760 And then, a few months into it,

00:00:32.860 you're working with a few customers,

00:00:34.240 maybe they promoted your product or your services,

00:00:36.900 and you find out that their values were flawed.

00:00:40.100 And that's what happened with me.

00:00:41.060 I was working with this partner out of New Jersey.

00:00:43.240 It was great at the beginning.

00:00:44.600 We had like four or five people on their team

00:00:46.440 is when I was building my company, Spheric.

00:00:48.860 And it was a great growth opportunity.

00:00:50.740 People ask me all the time,

00:00:51.560 well, how did you grow 150% year over year for four years?

00:00:55.200 Well, honestly, it was just really smart strategic partnership.

00:00:58.560 Same thing with Flowtown.

00:00:59.980 If you don't know about Flowtown, we partnered with, I think, 12 or 15 different companies that had email addresses.

00:01:07.160 And using this strategy, that's what I want to share with you guys today.

00:01:10.420 So, oh, I said their name.

00:01:12.340 Anyways, the company in New Jersey was so bad that it got to the point where we just had to stop working together.

00:01:18.280 Their approach to business and their values and their ethics made us look bad.

00:01:22.820 My team got frustrated, and I just gotta tell you

00:01:25.620 that no matter what you do in business,

00:01:27.920 your word is the only thing that you have, right?

00:01:30.500 You might have people and revenue and money

00:01:32.460 and all that stuff, but if your word doesn't mean things,

00:01:35.000 it doesn't get you far, and for what I did

00:01:37.460 and what I wanted to create, that was number one.

00:01:39.660 So I wanna walk you through these four key areas.

00:01:42.480 Number one is shared customers.

00:01:44.080 Does the partner, if you're looking to partner

00:01:45.740 with a company, does that company

00:01:47.320 have a shared customer base, your ideal customer?

00:01:50.220 Is it, do they have a large majority?

00:01:52.120 because many times big companies want to partner

00:01:54.520 with startups because they want to get access

00:01:57.160 to your customers, but if you look at their customer base,

00:01:59.980 it could be old, stodgy, not innovative,

00:02:02.320 not early adopters, so is that truly your ideal customer?

00:02:06.480 Probably not, so I want to challenge you

00:02:08.400 to really ask yourself, does this partnership,

00:02:10.980 us partnering with them, going to get us

00:02:12.840 in front of our ideal customer?

00:02:15.520 Not them getting in front of your new, innovative,

00:02:18.340 smart, faster, bigger pockets type of customers,

00:02:21.560 but them, because that is really the true value.

00:02:23.720 So that's number one.

00:02:24.560 Number two is, do you have an early commitment from them?

00:02:28.700 You know, when you're building your startup,

00:02:30.840 it's easy, especially if you're small and they're big,

00:02:33.700 it's easy for you to get excited about the opportunity

00:02:36.240 and start thinking about, oh, if we do this,

00:02:38.120 and when this goes off, great,

00:02:39.880 it's gonna generate so much revenue for us.

00:02:41.740 But the truth is, is they, as a big company,

00:02:44.020 take a while to make decisions, and at any point,

00:02:46.780 and this has happened to me many times,

00:02:49.060 the person that you're working with could change jobs,

00:02:51.260 could get fired, could get reassigned,

00:02:53.300 and everything you've worked on

00:02:54.520 over the last few months will go south.

00:02:56.320 So what I always suggest to startup founders,

00:02:58.940 as I advise and I've invested in over 30 plus entrepreneurs

00:03:02.400 as an angel investor, I always tell them

00:03:04.180 when they're looking at doing deals,

00:03:05.320 get an early upfront financial commitment from that company

00:03:08.940 because it's just gonna set the expectations

00:03:10.700 because you're small and fragile as a startup

00:03:13.040 and they're big and established,

00:03:14.460 and if they aren't willing to throw down $5,000, $10,000

00:03:18.240 to set that relationship up from the beginning,

00:03:20.600 then you gotta really question how valuable they see

00:03:23.580 this potential relationship being long-term.

00:03:25.940 The third area that you gotta nail, okay?

00:03:28.580 To me, if you sacrifice this,

00:03:30.800 you can go in for a world of hate,

00:03:32.380 is strategic alignment,

00:03:34.060 specifically around the product roadmap, right?

00:03:36.780 I don't know if you've ever ran into this,

00:03:38.420 but I've seen entrepreneurs all the time

00:03:40.620 get a call from a big company

00:03:41.900 that wants to use their product,

00:03:43.660 and we wanna pay you, we wanna partner with you,

00:03:45.780 but it needs to change a few features.

00:03:48.580 For this to really work for us,

00:03:49.660 we need to add these two or three different things.

00:03:52.960 And it's totally kind of different

00:03:54.960 than what they've built so far.

00:03:56.420 And if they go down that path,

00:03:57.840 there's potential that the roadmap they've created

00:04:00.320 is gonna get delayed,

00:04:01.580 or that they're gonna have features

00:04:03.000 if that partnership doesn't really take off

00:04:04.680 the way you expect it to.

00:04:06.060 Those features and code base

00:04:07.560 is something you're gonna have to support.

00:04:08.960 So I always suggest to make sure

00:04:10.720 that the alignment of what they need as a partner

00:04:12.860 and where you wanna go on your product roadmap

00:04:15.140 are in the same directions.

00:04:16.400 Because if they're totally left and right field,

00:04:19.020 you're gonna be asking for a world of hurt.

00:04:20.840 The fourth, most important,

00:04:22.560 is make sure that there's brand alignment, right?

00:04:25.080 That you would be, and here's the word,

00:04:27.020 proud to be associated with that partner.

00:04:30.460 I've seen many opportunities,

00:04:31.860 especially around distribution and marketing,

00:04:34.000 where companies will allow another business to promote them.

00:04:38.080 And truthfully, when they ask about that deal,

00:04:41.320 they don't even wanna talk about it.

00:04:42.480 It was just like this shady underbelly kind of thing

00:04:44.720 that they did to just try to get the message out there,

00:04:47.140 to get their product used by more people,

00:04:49.020 but there was nothing that they would be proud

00:04:51.360 to run home and say, hey mom,

00:04:52.380 we just did a deal with this kind of company,

00:04:54.620 and they would be totally ashamed.

00:04:56.120 So make sure that you understand

00:04:58.480 where their brain values and ethics,

00:05:00.680 like I made the mistake where I should have dug deeper

00:05:03.000 when I did that partnership with a company on New Jersey,

00:05:05.180 but I didn't, and later on, months of effort and time

00:05:08.400 and my team involvement found out that we were not aligned.

00:05:11.320 So again, I wanna quickly review this.

00:05:13.340 The way to make amazing strategic partnerships

00:05:17.000 is a shared customer base, ideal customer,

00:05:19.360 your core customer avatar,

00:05:20.960 make sure that that partner has that in spades.

00:05:23.800 The other one is an early financial commitment

00:05:25.960 from that partner to make sure that they,

00:05:27.940 because when you're small,

00:05:29.260 you're gonna put a lot of your eggs in that same basket,

00:05:31.500 and for them, it's one of 100 different things

00:05:33.340 they're doing that year.

00:05:34.180 So make sure that they give you

00:05:35.720 some kind of financial deposit commitment

00:05:37.680 towards that partnership long-term.

00:05:40.080 The third one is strategic alignment on roadmap.

00:05:42.800 So where you're going on your product roadmap,

00:05:44.960 where they wanna go, they're aligned.

00:05:46.400 And then the fourth one is making sure

00:05:47.640 that you'd be proud to have them as a partner.

00:05:50.920 That is my four strategies for you

00:05:53.120 to have an amazing partnership.

00:05:55.080 I wanna ask you to subscribe to this channel

00:05:57.520 and also share this video.

00:05:58.820 If you know somebody that's about making

00:06:00.100 a big partnership decision, share this video with them.

00:06:02.740 I wanna ask you, this is your opportunity

00:06:04.560 to brag a little bit below in the comments.

00:06:06.640 Leave a comment, let me know.

00:06:08.000 What partnership have you done in the past

00:06:09.700 that was just world-class, that you just,

00:06:11.780 it was instrumental in the growth in your business,

00:06:14.140 in the learnings, in all aspects of just

00:06:16.940 what we just talked about.

00:06:18.660 It is an amazing partnership.

00:06:20.200 I want you to take the opportunity to honour them.

00:06:22.060 Mention them below in the comments.

00:06:24.060 I want to challenge you guys, as usual,

00:06:25.800 live a bigger life and a bigger business,

00:06:27.420 and I'll see you next Monday.

Dan Martell - February 01, 2016

How to Pick The Right Business Partners

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