3 Tips On Closing The Perfect Corporate Partnership For Your Startup
How do startups reach scale? Fanatic customers? Going viral? A key celebrity endorsement? One of the most predictable channels for scaling up your business is a corporate partnership. But predictable does not mean easy or without frustration. Peris Bosire, the co-Founder & CEO of FarmDrive has made setting up corporate partnerships a science. FarmDrive is “a financial technology company that applies data science to provide digital financial services – loans, digital payments and agriculture insurance – to smallholder farmers and agriculture value chain SMEs through mobile phones.” They launched in Kenya in 2015. Through the DigiFarm initiative, FarmDrive scored the mother-of-all partnerships for Kenyan tech companies, Safaricom. Best known for inventing mobile money with their M-Pesa product, Safaricom holds 63.3% of the Kenyan market for telecommunications.
If you too want to score a big corporate partnership, and not live to regret it, follow Bosire’s three core principles.
1. Deliver value that the corporate partner cannot
“Any partnership is established on a basis of value,” says Bosire. You need to not only know what you can deliver, but also how that will help the corporation reach their goals. With increased competition, Safaricom has seen their market share decline steadily from a high of 71.9% in September 2017 to the current 63.3%. To drive growth, Safaricom needed to find a way to offer diversified services to their subscriber base. In Kenya, that means providing more services to farmers. They launched the DigiFarm brand which sits within Safaricom but outsourced the different components to partners. Through the DigiFarm, farmers can learn, get loans, check where to buy inputs, and access other critical information and services. This is where FarmDrive’s unique capabilities came in. They had the ability to provide credit scores for farmers and so they were selected as the loan-provision partner in the DigiFarm.
New capabilities can also help startups deliver new customer segments. FarmDrive has spent the last few years “proving that you can automate processes and understand risks” making it viable for banks to serve smallholder farmers. Now that banks want to enter this segment, FarmDrive is well-positioned to partner with them.
2. Demonstrate clarity of vision
Startups can be intimidated by corporations. No matter what the corporation asks for, the startup will find a way to deliver. Bosire says to do the opposite. You need to stand out and be known for something specific rather than being all things to all people. “When people think about smallholder farmers, agriculture financing and tech, most likely FarmDrive will come up,” she says. That tight association means that corporates come to them with specific tasks. Not only does this reduce the burden on business development, but also levels the playing so that the startup and corporate can meet as equals, each providing something that the other needs.
3. Partner with people
When we talk about partnerships, we say that this startup has partnered with this brand or that corporation. While this is great for the press release, real partnerships are not between entities. They are between people. For Bosire, the partner needs to have the right people on their team. For example, if it is a partnership with a bank, she needs to know that the people responsible for the credit risk assessment are ready to forego bureaucracy, roll up their sleeves and work side-by-side with them.
“As a startup we move very fast. We like breaking things and learning from them and recovering. So, we look for partners who don’t have red tape in their processes. We don’t like meetings upon meetings upon meetings,” she said. And at this stage, it’s not just that she personally doesn’t like meetings, it’s that an early-stage startup doesn’t have the human resources to manage an account that needs that level of active management. If she finds out that a partner doesn’t have the right collaborators on their side, she prefers to tackle the problem without partners and wait for the corporate to come back to them when they are ready to be flexible in their processes.
If you follow these three pieces of advice, your startup will be on its way to scaling through a corporate partnership. Don’t forget though that in starting a partnership, you also have to be comfortable walking away. Bosire made it clear, no matter who the partner is, if it is not headed in the right direction, you have to be prepared to terminate.