Photo by b1ue5ky
This article is a guest post from Eric Tarn. Eric is a co-founder of Onepager, a simple website builder which helps individuals and small businesses get beautiful sites up quickly and easily.
When you’re part of a startup, you’re usually working with a smaller team and budget to reach big goals. While it’s tempting to try to do it all by yourself (after all, isn’t that the go-getter startup way?) there may come a time when it’s most beneficial to work with another company to reach your goals.
It’s very likely that another company has developed a product or solution that you don’t have time to, and vice versa. Like the symbiosis between egrets and hippos, partnerships allow two parties to mutually benefit from each other’s work.
At Onepager, we’ve formed two very different partnerships. In our first, we incorporated fellow startup Gumroad’s e-commerce platform into our own; in the second, domain registrar Namecheap.com offered our services to their huge user base. In both cases, the other companies approached us with an initial proposal.
While luck is always part of business, I also think that by communicating our values honestly, both internally and externally, we attracted like-minded companies who were natural partnership fits. And throughout both negotiations, we made sure we were crystal clear on how the partnership would benefit each side.
Here’s how I’ve found working with both a small and large company beneficial to my own, and the reasons why any startup should be open to the idea.
Partnering with a fellow startup
Onepager’s main objective is to help small businesses build great-looking websites quickly and easily. However, since businesses tend to sell things (who would’ve thought?), many of our customers expressed the need for e-commerce functionality. Since we couldn’t address this immediately, we put e-commerce on our roadmap, and had customers link to their PayPal accounts as a provisional solution.
Then enters Gumroad, proposing a partnership in which Onepager would use Gumroad as its e-commerce tool, giving us the functionality we needed, and providing Gumroad with wider distribution. By integrating with Gumroad we were able to address the needs of our customers with a market-tested, user-friendly tool. Here’s how this partnership directly benefited Onepager, and how a similar partnership would benefit you.
1. We pushed out a sophisticated feature quickly
To build the e-commerce functionality ourselves would have taken two of our team members at least 40 hours each. Using Gumroad’s Platform API, it only took 20 hours of work over the course of a couple weeks to integrate everything and offer our customers beautiful e-commerce functionality. Not only had we reached a goal on our roadmap, but we were able to keep focus on other initiatives. And by giving our customers a product they had asked for with such quick turnaround, we demonstrated that we had prioritized their concerns.
2. We saved thousands of dollars
Using Gumroad saved us thousands of dollars in development hours, since a product we needed had already been built. If we had chosen to assign this project to existing team members, it would have taken two people at least 40 hours—a total of 80 hours, which, depending on who you ask, could have cost us $60,000.
Additionally, delaying e-commerce could have cost us thousands of dollars of potential revenue from prospective users for whom e-commerce was a make-or-break necessity. By partnering, we got a useful and elegant product for free, and delivered it to our customers quickly.
3. We worked with people like us
Other startups just get it. When you partner with a fellow startup, you both understand what it’s like to be a small business amongst many hoping to succeed in a highly competitive market. Chances are you entered the field because you’re super passionate about what you do, and working with like-minded people makes the whole process easier.
It’s also very rewarding to see both your company and their company grow. Being invested in each other’s success boosts morale all around, and this sense of kinship only happens when you self-identify with your partner. It makes the whole process that much more exciting because when one side wins, so does the other. Everyone’s in it together.
Partnering with the big guys
When Namecheap first contacted us, we couldn’t believe that such a large company was approaching us (the little guys!). Once we recovered from the initial disbelief, we felt validated to know that such an established company wanted to work with us. It reaffirmed the idea that being honest and forthcoming about our company’s mission attracted companies we were excited about. But besides merely boosting our ego, working with Namecheap has given our company huge advantages that would have been harder to gain on our own.
1. We have the seal of approval
When you’re working at a startup, you know you’re great, but it’s powerful to have a well-known company backing that up. No matter how revolutionary or useful your product is, having a trusted source vouch for you gives people confidence in your purpose. That’s what Namecheap does for us; they let people know we’re valuable. So valuable that they use us for their own customers. This type of reassurance makes people more confident in you, and thus more likely to use your product.
2. We got press you can’t buy
Being linked to a larger company gives you high-visibility press that’s much harder to come by on your own. When we partnered with Namecheap, we wrote a press release, which was either reposted or covered by various news sources. Now visitors on those sites, who we previously had no way of reaching, now know who we are. The partnership also means that anyone who registers a domain with Namecheap is offered Onepager as their site builder, putting us in front of potentially millions of their customers.
3. We gained wider distribution
It can be a struggle to balance lofty goals with a thrifty budget. While you probably didn’t found or join your startup purely for the sake of making money, the reality is that you need it to build your company. So if you can get sales in exchange for offering a product you’ve already developed, it becomes an almost effortless, and hopefully free, way to generate revenue. (Of course you have to get past the negotiation process first, which unfortunately can be lengthy.)
To give you an idea, Namecheap, who boasts a list of over one million users and three million domains, started offering us on their site December 14th, 2012. Since then, our revenue has increased by 50%. That’s high volume sales without much work. Any customer registering a domain is extremely likely to be looking for a website builder, and with the click of a button, they’ll get exactly what they need. That’s like having selling machine that presents our product to an ideal audience 24/7. Compare that to cold-calling, and you can see how desirable this model is.
Conclusion
Partnering with these two companies has allowed our company to grow in amazing ways that otherwise would have taken longer to achieve, or might not happened at all. As I mentioned before, being honest and in-touch with your team and other companies about your mission will help you develop partnerships that reach your goals with smart, like-minded people. If both companies are benefitting in clearly defined ways that directly contribute to their missions, you can rest assured you’re entering a very desirable partnership.
Down the line you might be able to enter partnerships that aren’t so clear cut (like co-branding ones), but in the beginning stages of growing your company, you need be laser-focused and protective of your resources. Partnerships like the ones we’ve formed with Gumroad and Namecheap are the kinds that directly benefit startups, allowing you to continue down your roadmap with more resources and support than you had before.
