Strategic Partnering for SBIR-Stage Companies: Finding Your Strategic Partner
Tags: Business Development, Business Planning, commercialization, SBIR/STTR reauthorization, Strategic Planning
This is the third in a BBCetc series on various aspects of finding, consummating, and maintaining a productive inter-company partnership. Part one / Part two
In many ways, the process of finding the right strategic partner is not much different than finding the right customer for your product. Both involve identifying and understanding a problem. Finding the right customers means identifying and solving a problem they have. Finding the right strategic partner means identifying and solving a problem you have.
Perhaps you need access to funding, critical resources to accelerate R&D, or manufacturing expertise. Can these or other “problems” be solved through partnering? Is that the best alternative? If so, what value will your company bring to the relationship?
As in any negotiation, you want a clear idea of your own objectives, their relative importance, and how far you’re willing to compromise away from those priorities.
Identifying prospective partners will be easier if you first define concrete screening criteria, such as, size, location, market focus, and track record. A good rule of thumb for an early-stage company is to identify more than one prospect, but less than 10, unless you’re willing to make a substantial time commitment to the process. The best matches are between partners with common interests but complementary skills. This situation gives the small company the chance to make a unique contribution to the relationship, or at least one that’s not easily replaced.
Many corporations have departments or groups that serve an “intake” function. They have various names: business development, in-licensing, technology scouts, new initiatives, and so on. If your prospect has no designated front door, T.A. McCann, co-founder of Rival IQ, suggests targeting the marketing manager. This individual is not only the most knowledgeable about what’s happening on the ground but also has the resources to make things happen within the organization.
Dealing with large companies can be a frustratingly slow process but after an initial expression of interest, the pace will allow you to do the necessary due diligence before your selection. Both sides can benefit from a measured approach, especially if it is combined with a smaller “test” project to assess compatibility and mutual trust.
No matter how well it seems to be going, leave the rose-colored glasses at home. The reality is the majority of large company/small company alliances are unsuccessful, so you’ll want to have a contingency plan in place.
Michael Kurek, PhD, is BBCetc’s Partner in charge of commercialization planning. He also provides SBIR/STTR consulting focusing on NSF,DoE, USDA, DoC, DoT, DoED, and EPA.