I’m on the cusp of a transformative partnership with a global system integrator (GSI).
We draft a joint business plan together. We align on revenue projections. We agree to start mapping the customers we will pursue together.
My CEO’s mouth is watering at this burgeoning global alliance that I’m forging.
Then, the Managing Director at this GSI informs us that we need to pay their firm $250,000 to train their teams to use our software. Some partnership.
Next, they send us an 80-page contract to sign that makes it clear that their senior team, who we have been working with for 6 months, does not understand our product.
As this partnership goes up in flames, I am distraught. As I reflect on this debacle, I vow not to make this mistake again.
That is how I became a raging advocate for minimum viable partnerships.
Minimum viable products … learning before scaling.
Twenty years ago the notion of a minimal viable product was fresh.
Today, minimum viable product (MVP) is a universally accepted approach to product development among startup founders and investors, thanks in large part to Eric Ries and Steve Blank.
Minimum viable product is building the most minimum version of a product that will still allow you to learn. - Eric Ries
Famous startups MVP stories include …
Dropbox started with no product, just a 2 minute video that generated 75,000 sign-ups. Today, Dropbox is valued at $10B.
Airbnb started when its founders rented out one air mattress to attendees at a design conference. Today, Airbnb’s valuation is $75B.
Uber started as a simple text-messaging service in one city. Today, Uber is worth $200B.
Minimum viable product is about gathering customer feedback before a writing business plan, assembling a team or pitching investors, etc.
Applying the MVP playbook to partnership
Minimum viable partnerships are a first cousin of minimum viable products. The goal is the same for both: learn as much as possible with the least amount of effort and investment. Then, use those learnings to iterate and refine.
Here is what minimum viable partnerships look like:
Before you publish a press release touting your new partnership, build a proof-of-concept and collect feedback from 10 customers.
Before you go on stage at an industry conference to announce a partnership, prove that a customer wants to use your joint solution.
Before you craft a co-selling and co-marketing plan together, see if you can close a few deals together.
Minimum viable partnerships are about having the discipline and patience to listen to customers before announcing what a game-changing partnership you’ve struck.
MVPs are key to co-selling
Co-selling is very popular in B2B software right now for good reason. With co-selling, each partner builds a direct relationship with the same customer. Unlike reselling, co-selling partners each negotiate their own agreement (and pricing) with the customer in parallel.
Co-sellling is when Microsoft and Salesforce team up to convince a customer to transition off HubSpot. Or when Shopify and Stripe partner to win a retailer’s RFP.
But co-selling is much harder than it sounds. Selling a bundle of complimentary goods is more complex than selling a single product. Co-selling requires that the customer makes two buying decisions at once - no small feat!
Successful co-selling requires a compelling “better together” story that the customer can grasp quickly.
That is why minimum viable partnerships are so important.
Without validating your “better together” story with actual customers, you have no idea if you are putting together a strategic partnership or a waste of time.
I learned the hard way. It was agony.
Make sure first step with your next partnership starts with customer feedback.
More reading
The Lean Startup, Eric Ries