When founders are starting out, partnership inquiries sound really exciting. In theory, a successful partnership with a larger company could help your company get more customers. What you realize, though, is that partnerships are rarely a real thing. When you work with another company, either they are your customer or you are their customer. Anything other than that usually just eats up time and energy.
—From Brad Flora’s “I Sold My Startup for $25.5 Million: Here’s how I did it,” which is interesting throughout despite the sensationalist title.
At Seliger + Associates we’ve learned that anyone who talks about partnerships is wasting our time (and theirs). People who need a good or service and can pay for the good or service are usually prepared to move quickly. They don’t need much if any convincing from third parties. And they don’t need an intermediary between them and the good or service provider.
Think of it this way: if your friend knows you love Thai food and tells you that there’s a great Thai restaurant nearby, you’re not going to wait for your friend to take you there. You’re just going to go. By the same token, when existing clients make referrals, they often don’t even tell us. They just do it. The referral isn’t hard and it isn’t complex and it usually involves very little negotiation.
Being in business taught me that there are two factors that matter more than anything else: who is paying me money and who I am paying money to. “Partnerships” or “alliances” that don’t involve contracts and money and services or goods don’t mean anything.