Sprint 76 :: Labyrinth of Product Partnerships
Internal product development is already a formidable task, but when you introduce another organization into the mix, the complexity escalates exponentially. If your team is preparing to embark on a collaborative product journey this is for you.
When you build internally, you possess the autonomy to design, iterate, and respond to user feedback at your discretion. Conversely, in a partnership, your creative freedom is often constrained by your partner’s technological framework, operational capabilities and distinct priorities. The feedback loop is no longer a streamlined process but a negotiation between two entities.
As a product manager navigating these waters, your stakeholder scope expands dramatically, and the intricacies of execution amplify. You're tasked with balancing two sets of users, aligning two corporate visions, and synchronizing two development teams—all while maintaining a bias towards your own company’s objectives.
Why Companies Seek Partnerships
The allure of partnerships can be distilled into a single concept: acceleration.
Effective partnerships create a symbiotic dynamic, enabling both companies to expedite their strategic goals. Unlike traditional "win-win" scenarios, product partnerships require a triad of success that includes the end user.
Strategically, partnerships often fall into two categories: expanding into areas beyond a company's core expertise or leveraging the partner’s customer base for enhanced distribution. Most partnerships can be visualized within a 2x2 matrix, plotting these goals against each other. Let’s explore this with some fresh examples.
Examples of Strategic Partnerships
Square and Etsy: Square handles Etsy’s payment processing, offering Etsy a robust financial infrastructure while Square gains access to Etsy’s diverse customer base. While Etsy could eventually develop its own payment system, Square solidifies its position by continuously enhancing its service offerings.
Pandora and Lyft: Pandora users can enjoy personalized music playlists during Lyft rides. This collaboration leverages Pandora’s extensive music library to enrich the Lyft experience, making Lyft a more appealing choice for music enthusiasts and giving Pandora a new platform to reach listeners.
Microsoft and SAP: In a powerful union, Microsoft’s Azure cloud services provide the infrastructure for SAP’s enterprise software. This collaboration not only enhances SAP’s software capabilities but also extends Microsoft’s reach into enterprise environments.
The most enduring partnerships deliver significant customer utility. Unlike short-term marketing partnerships that merely cross-sell products, successful product partnerships create deep, sustainable value.
The Genesis of Partnerships
While the notion of strategic partnership formation is appealing, the reality is often more serendipitous and relationship-driven. Partnerships frequently emerge from spontaneous interactions and unforeseen opportunities. Here are a few scenarios that illustrate this:
Executive Encounters: A chance meeting between executives at an industry event can spark discussions and lead to a partnership.
Business Development Outreach: An inbound request from a business development representative can coincide with a period of openness and availability.
Employee Movements: An employee transitioning from one company to another can act as a catalyst for partnership discussions, leveraging their network.
Pre-Acquisition Trials: Sometimes, a potential acquisition target becomes a partner through exploratory collaboration.
VC Facilitations: Venture capitalists often broker partnerships within their portfolios.
Organic Integration: Independent development on a platform can catch the host company’s attention, leading to deeper integration.
Partnership formation is more akin to the unpredictable nature of dating before the advent of apps—it relies heavily on chance encounters and mutual interests.
Forging Alignment
Alignment is the cornerstone of a successful partnership. It’s imperative to understand each other’s strategic goals, cultural nuances, and what each side expects from the collaboration. Initial meetings should be focused on establishing this alignment through a series of probing questions:
Background and Culture: How did your company evolve to where it is today? What defines your corporate culture?
Vision and Strategy: What are your strategic priorities for the next few years? How has your vision adapted over time?
Success Metrics: What does a successful partnership look like to you? What metrics are critical for evaluating success?
Urgency and Readiness: When do you aim to launch? Is there a team ready to commence work?
Driving alignment requires engagement at multiple levels—teams, executives, and legal stakeholders must all be in sync to avoid potential obstacles and ensure a harmonious partnership.
Navigating Partnership Dynamics
Power dynamics are an inherent aspect of partnerships. Typically, there is a dominant player (the big fish) and a lesser one (the small fish). Understanding your position and the relative leverage each side holds is crucial.
Guidelines for Big Fish:
Leverage your position wisely without being overbearing. Respect your partner’s contributions and avoid exploiting your dominance.
Guidelines for Small Fish:
Push for rapid progress and maintain momentum. The larger partner may not share your urgency, so it’s vital to keep the pressure on.
Guidelines for Equal Partners:
Equal partnerships carry the highest risk of conflict due to perceived parity. Constantly reinforce the mutual benefits and maintain executive-level engagement to navigate tough times.
Pitfalls to Avoid:
For Big Fish: Don’t be a bully. Overconfidence and arrogance can drive the smaller partner away.
For Small Fish: Don’t procrastinate. Drive the initiative forward with urgency.
For Equal Partners: Don’t let pride prevent compromise. Collaboration is key.
Product partnerships, when executed with precision and mutual respect, can propel both companies towards their strategic goals, enriching the customer experience in the process. While the journey is fraught with challenges, the rewards of a well-orchestrated partnership are well worth the effort.
The Product Land ⛰️
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