Despite the driven, ambitious nature of entrepreneurs, there are still some things they can’t do alone. In getting a startup off the ground, forming strategic partnerships is critical. Whether this comes in the form of a massive corporation helping boost your startup’s visibility or an individual providing content, partnerships are integral to a company’s growth.
Lee Moulton, the Head of Strategic Partnerships at Breather, breaks down the process of determining and securing a viable partner. His experience has taught him, that particularly for a young company, these types of partnerships are one of the fastest means to scaling.
How do you ensure strategic partnerships are valued for both parties?
When structuring a strategic partnership, you have to first have a fundamental understanding of what value you can give to your partner as well as what value you can receive from a partner. The value exchange and the alignment of the deal needs to be as equal as possible for the partnership to be sustainable.
The definition of what is valuable for any particular party in a partnership is largely based on where an organization or enterprise is in its lifecycle.
For instance, for a large conglomerate like PepsiCo or Microsoft, what is valuable is to be able to access new markets where they aren't currently popular or well known. For a small upstart media company that has captured the attention of a small but rapidly growing audience, what is valuable is to be able to distribute their brand to larger and larger audiences. In that context, the value exchange aligns perfectly. PepsiCo or Microsoft can partner with the small media company and rest assured that this small but growing auience will be aware of their brand. In exchange the small media company will be included in the large conglomerate’s marketing and distribution channels, achieving levels of awareness and new user access that will allow them to accelerate their growth and potential venue. In this example, both parties get what they want but are using their strengths as it relates to their partner’s weaknesses.
What do you look for in pursuing partnerships?
Breather is a very young company. We are almost 3 years old at this point. Because we are young, are greatest weakness is awareness and our greatest priority is rapid active user growth. We need as many potential users of our services as possible to know about our offering without breaking the bank via traditional paid advertising. When looking at partnerships, we are looking at how we can leverage our brand and what we’re doing to benefit a complimentary service in exchange for that service offering us a platform to make more potential users aware of our service.
The key hallmark is that the service has a larger audience than we do or that the service or organization has a concentrated audience that may be small but extremely representative of our core user base.
A good example of the former is Zipcar. Zipcar is a public company with millions of users and an extremely large audience. They are an on-demand, hourly service like we are so we can assume that their audience would find our product complimentary. For Zipcar, one of their key priorities is making sure the value of being a Zipcar member is always world class. One aspect of this is partnering with complimentary services to offer exclusive discounts to their member base. In exchange for these discounts, Zipcar will then share these services with their audience, giving the service access to Zipcar’s audience. The exchange here is very simple, exclusive discounts for Zipcar members in exchange for access and distribution of the Breather brand to their audience.
A great example of a smaller scale partnership is partnering with a well known and well respected individual in a certain field. For instance, many photographers use our locations to shoot content. Partnering with an influential photographer who has a large following on social media can help bring your brand to the forefront in a targeted way. In this case Breather is the larger entity and the photographer is the small one. Breather provides discounts / credits on our spaces to the photographer and in exchange, the photographer notifies and promotes Breather to his / her network. This is a win on both sides.
How long do partnerships typically last for?
Partnership durations really depend on how successful the partnership is. There are phases of partnerships. The first phase is the test phase to see if the partnership is worthwhile for both sides. The next phase is the optimization phase where you look at how the partnership is working and see how to make it more beneficial. Once both sides feel like the partnership has run its course and the maximum value has been realized, both sides then shift priorities and move forward as needed.
How do you evaluate the success of each partnership?
Metrics. Before starting any partnership, both sides must have a clear notion of what “success” entails based on goal-driven metrics. Metrics can include revenue, new signups, website visits, media mentions, etc. Making sure these metrics are tracked carefully during the duration of the partnership is crucial. It also makes optimization easier because you can quickly identify which aspect of your business or service the partnership is impacting the most.
What characteristics of a partner are most important?
Brand alignment is crucial. Your brands have to be complementary so that your respective audiences are not thrown off by the partnership. The next is experience. Try not to be a company or individual’s first partner. You want to make sure that a partner has successfully executed partnerships in the past and can comprehensively identify what was achieved.
Does the viability of a strategic partnership complement or hinder a typical sales pipeline?
Partnerships help both marketing and sales. Depending on how your company is structured and which metrics marketing vs. sales are responsible for, they can help one more than the other. For the most part, partnerships should benefit sales the most because they help accelerate pipeline growth.
What’s next for Breather? What new innovations can we expect to see?
We recently announced the closing of our Series C round of funding. We raised $40 million in a round led by Menlo Ventures. This is extremely encouraging as continue to building a more connected world by making private space more accessible. We are focused on expanding our network to more places our clients find themselves in and making our search functionality and access functionality more seamless. Expect to see our mobile app continue to service more of your needs around the booking process as well as seeing spaces more specialized to specific use cases.