Many start-ups piggyback on another company to market their product or services early on.
Microsoft, eBay, Oracle, Facebook and Apple are just a few technology companies around whom entire ecosystems have grown. There are hundreds of successful, profitable companies that depend on these big fish, or "whales", to reach customers. Early on, the whale might not notice the startup at all, or even welcome the startup to a community of other small businesses that support niche needs of the whale's customers.
However, as the startup grows, the relationship between these startups and whales faces many challenges. Depending on how aligned the strategies of the two companies are, the whale may view the startup as parasitic rather than symbiotic. And as the startup becomes successful, it may want to separate from the whale and begin to own the customer relationships directly, rather than through the whale. Meanwhile, the whale may decide that the niche being filled by the growing startup is attractive enough for the whale to serve directly. Many companies have been put out of business by their former "partners".
So what's a growing company to do?
1. Start your business with more than one channel–ideally 2 or 3–so you are never entirely dependent on a single company.
2. From the beginning of your relationship, be clear about the importance of at least sharing the customer relationship with your whale (this might mean keeping customer data, or having right to directly contact your customers)
3. Understand motivations and objectives of the whale. what is the likelihood of their entering your market? what is the impact of you leaving their market?
4. Indulge in some E-team "scenario planning"–even just a few hours to think through the different options (stay in ecosystem, pull decisively away from ecosystem, walk the tightrope between dependence and independence)
5. As soon as you can afford it, begin investing in brand building with
your ultimate customer. Make sure they know you as discrete from your
channel or network.
6. When you do "pull away" from the ecosystem, make sure there is value for the customer–and that it doesn't feel like just a power play. There are sure to be glitches as you transition to a more direct approach, and you need your customer's support.
Today's companies see the challenges within social networks as unique and new–but in reality, these are simply new flavors of age-old strategic problems relating to partnership and channel strategy. By applying proven strategies to these challenges, companies can avoid some of the minefields that have destroyed fledgling businesses just as they were learning to fly.
