Identifying Potential Business Development Partnerships & Roadblocks
One of the most valuable business activities in today’s technology-first world is to create partnerships between products or businesses that will benefit the customers of both.
One of the most valuable business activities in today’s technology-first world is to create partnerships between products or businesses that will benefit the customers of both. These partnerships can involve anything from simply sending customers from one platform to another, to collaborating on a brand new product or feature.In this article, we’re going to discuss how you can go about identifying potential business development partnerships and what you need to look out for that could stop you from being successful. Most of the content that we’re going to analyze below comes from a Firneo workshop that was exclusively for members of the community. You can apply today if you’re interested in learning more or joining for more great content.
Finding Potential Business Development Partnerships
Let’s say you’re the first business development hire at an early stage organization and you’re tasked with building a fruitful partnership with another business. The first step you would take is to figure out what type of partnership is aligned with your organization’s overarching goals, or what types of partnership might help you achieve those goals. After determining the type of partnership you want to build, then comes the hard part of identifying another organization that you want to partner with (and who also wants to partner with you). Even when you find someone who sees the benefits of working with you and is ready to move forward, ironing out the details can be time consuming to say the least. Negotiating terms, having quantifiable goals, and finally execution are all part of building a productive, long-lasting business relationship.Parsa Pezeshki was the first business hire at Clause, a SaaS platform for smart agreements and contracts, when he came onboard as Head of Business Development. When Pezeshki first joined, Clause had already begun partnership talks with DocuSign in the hopes of forming a strategic alliance. Parsa Pezeshki and Drew Ashlock, the Lead Product Manager at DocuSign talked to Firneo about the ins and outs of forming a partnership, the pitfalls and roadblocks that can occur, and what it takes to maintain a partnership over the long term. We cover the highlights of that discussion below.
Goals of Business Development Partnerships
The main reason for forming any partnership is to increase the long-term value for both organizations. In the case of Clause, their reasoning for wanting to partner with DocuSign were manifold. For one, DocuSign is a much bigger company with a large customer base, so being able to put their product in front of more potential users was a huge win for Clause. For DocuSign, building a product from scratch was too resource and time-intensive, and acquiring a company was too risky. By partnering with Clause, DocuSign would be able to integrate a new product fairly seamlessly into their current infrastructure and gauge customer usage and reaction more quickly. Though, the successful identification of a strong partner worked for both parties here because DocuSign ended up purchasing Clause in 2021. Before we get into the nitty-gritty details of the execution, let’s go over what you should be on the lookout for when identifying potential partnerships.
How to Identify Potential Partnerships
Creating a rock-solid partnership doesn’t happen by luck. There is a ton of due diligence that needs to happen to make sure both companies are aligned in their goals, especially when forming a strategic alliance. Here are some things you should look for when identifying potential partnerships.
1. Understand each other’s goals
Before you get to the point of signing any contracts, you should first have a clear understanding of why you want to partner with another organization. For Clause and DocuSign, both companies had a very similar vision. “It started with a vision of the future of agreements,” Ashlock said. “If we did work together, what does the integration look like? How can we take these two different services and make something happen that’s in line with the vision that we have for the DocuSign system?”Ashlock and the DocuSign leadership team then sat down with Pezeshki and the Clause leadership team to brainstorm what working together would look like. Before moving forward with any sort of partnership, you should be asking yourself if your visions align, and you both understand what’s motivating you to make this partnership happen. In other words, are your organizations on the same page or are there any items of potential confusion? If you aren’t on the same page, you need to take care of it before moving forward.
2. Is it a good organizational fit?
After identifying that there is solid reasoning for partnering with another organization, you should then move on to figuring out if there is interpersonal cohesion between the businesses. Relationships are what drive partnerships forward; it’s important that both organizations play well together.“For [DocuSign], everyone really liked the Clause team, which helps a lot,” Ashlock said. “So sitting down, having a good conversation, and realizing that there were some smart, competent people was really important. Having faith in your partner is a huge first step.” Because Clause had a core competency that DocuSign valued greatly, it made forming a partnership an easier decision to make.
3. Have clear measures for success
Once you’ve determined that your visions are aligned and there is organizational symmetry, the next step is to iron out the details of the partnership agreement. This comes in the form of establishing clear success metrics for both businesses. For DocuSign, there was a huge convention six months away where they were going to show off a demo of their new technology to an eager audience. Having the Clause integration up and running was a huge incentive for DocuSign to move forward quickly. Getting customer feedback was important to Pezeshki and the Clause team. “Putting the revenue targets aside, getting usage data and meaningful customer data was definitely a success point,” Pezeshki said. “There are some key terms that govern how both companies behave and what strategic decisions we make, both from a product and commercial perspective. We did have quantifiable targets, development targets, and revenue targets related to our joint product.”Pezeshki believes you should be ready to make tradeoffs since they are implicit to any partnership.“If you have a contractual obligation to a certain action, then you need to dedicate resources and effort to achieve those. So the implication is that there are tradeoffs to make, what companies you can work with, what product features you can enhance or bring to market. All of those tradeoffs are implicit and they are important in driving the relationship forward,” Pezeshki said.
4. Keep a continued open line of communication
Once you’ve finally come to terms on a partnership agreement, the real work starts of actually building and executing. For the DocuSign and Clause teams, that meant being in consistent contact with each other to push the project forward.“We had a continued cadence of weekly check-ins between the two teams. We created a shared Slack channel so we were working together almost like we were working at the same company,” said Ashlock. “It helped us maintain a tight working relationship while we continued to iterate on the integration. Staying invested on both sides and supporting the integration was key.”Pezeshki also believes that staying in communication with each other is the secret to Clause and DocuSign’s great working relationship, saying “we just established a really good communication line. It sounds cliche, but ultimately the partnerships, even if it’s with technology, is all about people.”Being in constant dialogue mitigates most, if not all, potential pitfalls that arise from the growing pains of building a partnership. Even having a shared Slack channel can’t help you avoid every roadblock you may encounter along the journey, which is why the commitment to being open and constant communication are always key to your success.
How to Identify Partnership Roadblocks
As with any budding relationship, there are going to be roadblocks that you’ll need to navigate around to get to the desired destination. For Clause, being a scrappy startup working with a much bigger company presented its own specific set of challenges. Pezeshki believed they lacked weekly and operational metrics early on. “We had these topline goals, but they didn’t flow down clearly. For a small startup working with a large company, just navigating the procedural and organizational maze of a public company takes effort,” Pezeshki said. “That’s definitely what you have to think about and deal with.” Another roadblock to look out for are differences in how quickly organizations are able to execute on certain projects. “We knew we were aligned on a product level, but the differences in timelines can create some interesting disparities,” Pezeshki said. “The other thing would be that, from a risk perspective, public company decisions are more calculated.”“Startup culture versus big company culture,” Ashlock added. “Clause has the benefit of being able to move very fast on a lot of things so normally they’re waiting on us. But that’s just the nature of things.”Some roadblocks are unavoidable, whether it’s because of unforeseen circumstances, or in the case of Clause and DocuSign, the huge difference in the size of their respective businesses. Being able to adapt to new challenges and having clear communication are essential ways to prevent a partnership from fizzling out.
Identifying the right business development partnership is one of the best ways to build long-term value for your organization. Before you sign off on any agreements you need to know that your business goals are aligned, that your teams will have a good working relationship, and there are clear parameters for success. Plus, keep in mind that all partnerships, no matter what industry you’re in, at the end of the day are about people. Want to learn more about how to identify potential business development partnerships? Join Firneo today to gain access to more expert workshops, including the Clause/DocuSign workshop in its entirety, plus a library of resources and content at your fingertips.
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