(As featured on the Pragmatic Marketing website.)
The competitive landscape for software companies, driven by venture-backed startups and disruptive business models and technologies, has only become fiercer in today’s economy. Small players have to make good use of whatever means they have at their disposal to break free from the pack. One strategy to make that leap is to partner with a larger, established company whose scale and resources can quickly take the product well beyond anything the startup is capable of on its own. And a product manager can play a pivotal role in making such a partnership a success.
In the current economic environment that we find ourselves in, there has been an explosion of software startups and startups of all kinds. One stunning statistic drives this point home: there are 6,829 marketing technology solutions tracked on Scott Brinker’s Marketing Technology Landscape Supergraphic. The number has ballooned from 150 to almost 7,000 in six years. (The Supergraphic for 2018 can be found on chiefmartec.com in this post.)
Add to that all the advantages and disruptions that arise from the SaaS model, agile development, freemium and ad-funded apps, mobile and tablet apps, open source, and blockchain and you have quite a competitive situation. An alliance with an established partner can be what takes your startup out of its cramped, overcrowded market space and onto a much larger playing field with a stadium full of customers.
Read on to learn how a Product Manager at a startup can maximize the traction and momentum to be gained from partnering with an established player.
(Here’s more about how a Product Manager can help a partnership between two companies succeed. And here’s more about how a Product Manager at a large company can maximize the potential of a partnership with a startup.)
Yes, Big and Rich Does Matter
Small and confident companies learn the hard way that much of the market is looking to big, established, stable leaders to buy products from. Prospects want to know that a company will be around in a year, two years, and five years from now.
Prospects also want to see a healthy-sized base of customers who will help drive the direction of the product. A large customer base also builds up expertise and skills out in the workforce, making it easier to hire people to manage and support the software.
And probably what attracts prospects most of all is the thought that they’re buying from a market leader, one of the top companies in the industry. They feel confident that they are making the right choice, backed by a strong company with a good track record, and supported by many other customers just like them.
All this is the kind of clout that a big corporation brings to a prospective sale.
Sexy and Charming Matters, Too
Small companies know that there’s also great appeal to having a groundbreaking product with new, cool technology. And prospects can be charmed by a small company where they may meet a whole team of personable, attentive managers.
Sexy technology can cause prospects to forego stability and place their confidence in a product that promises to transform how they work. They decide that they don’t want, or can’t afford, to wait for larger, slower moving corporations to adopt and adapt the technology and capabilities.
Combining wealthy and established with sexy and charming can make for a truly winning combination. Customers are delighted to see their staid vendor bring out a dazzling product, and reassured that the product will be there for them in the future.
There’s a Big Difference, Here
It’s critical not to underestimate the differences that you’re dealing with in such a partnership. These differences lead to perspectives that can become almost polar opposites when it comes to timelines, development cycles, project management, and marketing and sales goals.
The smaller partner is usually much hungrier for sales revenue. The larger one may be much more focused on launching a product the right way, which takes thought and care.
The Product Manager at the small partner can help everyone on the team understand the expectations and viewpoints of the large corporation. Because they are often exposed to all aspects of the deal, from marketing and sales efforts to training, development, rollout, and support, Product Managers quickly pick up a feeling for the corporate partner and can save their teammates hours, days, or weeks of delays and miscommunication.
Moving the Monolith
One point that a Product Manager can help make to the team early on is that it always takes longer to get things done at a bigger corporation than the smaller company expects or wants. The very big partner can seem like a huge monolith that won’t budge.
Yet getting it to budge is exactly what you need to do. You may have to try many levers before you get traction in your effort. Because the Product Manager is involved in so many aspects of the partnership, you can help out your company by trying all the levers, sometimes two or three times, until things start to move.
You Can’t Change Everything
At the same time that your small company is exerting itself to get the big partner to move forward, you have to realize that you can’t change everything. Large corporations are going to have more players, more politics, more stakeholders, more approval required, and that’s not going to change just because you’re creative, dynamic, and motivated.
The same holds for your own company. Just because it would be better for your partner, your organization is not going to suddenly become thoroughly structured and process-conscious. You don’t have that luxury, and you don’t need the same amount of processes with fewer players involved.
The two partners will always be faced with the challenge of accommodating aspects of each other that won’t change. Product Managers find themselves smack in the middle.
Clash of the In-Laws
Speaking of finding oneself smack in the middle, as more people in each company become involved in the joint efforts, in marketing, sales, training, development, rollout, and support, it becomes like family gatherings involving two families with distinctly different ways of being and doing. Tensions are inevitable.
A Product Manager can play the role of translator, mediator, and peacemaker, and should be on the lookout for issues and misunderstandings. At some point every person involved can benefit from a soothing explanation of how and why things work differently at the partner company, and what they can do to help smooth the way and accomplish the task at hand.
Manage the Relationship
A relationship with such extensive and complex differences between the partners needs the attention of a dedicated person, someone who understands life on both sides of the tracks. Hire (or appoint and develop) someone who has a background of working successfully at a big corporation and who understands how things work there. This person also needs small company experience in order to truly anticipate and avoid the pitfalls of a relationship between two very different types of companies.
Without both perspectives, there’s a steep learning curve, one which a small company can little afford.
The Product Manager can provide valuable support to the person responsible for the partner relationship, reinforcing that person’s goals and message in the many joint efforts where the Product Manager gets involved. A Product Manager, with the right experience and business development knack, can be an ideal candidate to internally fill the relationship manager position.
Neither of You Is Right
Just like a good couples therapist will point out that neither partner is right and the other wrong, both partners need to be gently reminded of this fact. Each company has its own way of doing business and its own goals for the partnership. The key is to focus on what those goals have in common and to have the humility and the flexibility to change and bend in order to accomplish great things together.
The Product Manager gains a solid, sympathetic understanding of the thinking and limitations of the corporate partner, and can therefore provide a gentle reminder about there being no right partner and wrong partner when discussions get heated and noses are bent out of joint.
Programs, Plans and Execution
As a small company, expect your corporate partner to think in terms of more elaborate and extensive programs, with structured plans and execution. You may be used to flying by the seat of your pants as a startup, but that’s not how things are going to work at the larger company.
Sometimes you can gain maximum effect by taking the basic structures and intentions at your small company and dressing them up a little, documenting them better, with more structure and formality. The resulting documents can be circulated at the larger partner and gain you a lot of credibility, and more importantly, appreciation. Such documents are often the vehicle that transmits information between different levels and divisions in a larger organization. They’re also the vehicle for obtaining the necessary approval at the right levels.
One Family, Many Relatives
While at first blush a big corporation may seem monolithic, it is in fact more like a big family made up of many members. And the brother and sister divisions and companies aren’t always on an equal footing. There’s likely to be a big sister who always gets her way or an uncle who bosses everyone else around.
It’s important to realize that you’re dealing with many players who have varying degrees of importance and influence on your project.
Be sensitive to the fact that you will have more success with some divisions and groups, less with others. Focus on the most promising and use the wins there to sell to others in the corporation.
Momentum Pays Off Big
Finally, the goal is to get momentum going, so that your partner is selling your joint product internally and also to customers, and bringing in royalty revenues for you. Once the momentum starts, the day-to-day efforts of the Product Manager can ensure that it continues to build, and your small company enjoys the fruits of its relationship with a well funded partner who has a strong sales machine and a big base of loyal customers and prospects.
— Jacques Murphy, Product Management Challenges