EDITOR'S NOTES - by Diane W. Collins

Strategic Partners: Friend or Foe?
by Diane W. Collins

The buzz word of the hour seems to be Strategic Partners. Everyone is forming alliances attempting to become the best in category to their targeted user. Don't get me wrong. I definitely believe in strategic partnerships and alliances. The right partners can be extremely helpful when attempting to expand content, obtain professional services, or bring recognized personalities to your site. With whom you partner is also important to developing co-branded products and services. However, before you suit up for this game it's a good idea to scout out the other team...or you may just end up on opposite ends of the field.

There are the obvious things that need to be reviewed before alliances are formed. They include business structure, finances, site traffic, current alliances that may conflict, the proper filing of copyrights, patents, etc. But, is this enough? Is this really a measurement of compatibility? If not, what makes one company or one person a better match than another? There's definitely more to consider than just the numbers or the "potential." Remember, you're choosing team mates. It's worth your while to look beyond the scoreboard. You need to know how they play the game.

Every company has a set of principles...whether they realize it or not. Those principles are not dictated by words...like mission statements. They are dictated by actions. Watching your potential team mates "on the field" will give you good insight into the four essential areas of business compatibility: business ethic, business philosophy, work ethic, and managment personality.

Business Ethic: The most important area of compatibility is the business ethic. Let's say you are a firm believer in being a straight shooter. You call a situation exactly as you see it. Your company ethics, which you consider to be your future, are worth more to you than the deal of the moment. How are you going to be able to partner with the chameleon whose ethics change to fit any situation? You're long term...he's close the deal, cut and run. Not a match. Look for companies that build their businesses on the same ethical principles upon which you build yours.

Business Philosophy: The next compatibility issue you need to address is business philosophy. What ideology has your potential partner embraced as the road to success? For example, how do they handle customer service? Is the customer always right...or is he ignored until his last email threatens a lawsuit? If you are high on customer service and your potential partner isn't it can cause problems down the road. What if your potential partner's revenue model is free content supported by advertising only? You might not find them to be a good match if you charge for content and don't view advertising as a real revenue producer. Are you into co-branded products and a proponent of "not reinventing the wheel"? Partnering with a company that won't sell any product they don't "own" won't be an enjoyable experience. Company philosophies must match to work well.

Work Ethic: If everything fits to this point, it's time to move to the next step. How do your potential team mates get the job done? Let's say your company is into doing things correctly the first time with firmly established lines of communication and responsibility. You'll work around the clock, if you have to, to get a project out on time. If your potential partner is into whatever's good enough to get by for the moment you're going to butt heads. Let's say you're a young start up...you're hungry. You check out every potential for new content, products, services, etc. You're streamlined and you move fast. It's a whole new game if you decide to partner with a very large corporation. Light speed is not on their speedometer. Here's another example. Have you ever been involved in a partnership where you had to pick up the slack? In other words, your partner didn't hold up his end of the deal? You might want to make sure your potential team mates have a reputation for delivering on promises. Sure, they're under contract. Sure, you have legal recourse. But, if you have ever been in that very expensive situation, experience would tell you that an "ounce of prevention is worth a pound of cure."

Management Personalities: I have seen many potentially beneficial partnerships sail through all the stages of forming alliances only to bottom out and sink at this last level. If someone ever tells you, "I don't have to like the people I work with," you might want to check his employment history. Odds are he hasn't been at any company for long periods of time. If your team management works under the assumption that arrogance is unacceptable posturing; ego has no place in company decisions; and an open door policy leads to higher levels of employee commitment you're going to run into problems if you partner with a company run on the "dictator" model. The introduction of this negative force through partnering could actually end up ruining your own team.

One final word. Ideas are the commodity of the Internet. Don't reveal yours without the proper protection. If partnering requires the release of non-public information in order for a decision to be made make sure you have a tight, signed non-disclosure agreement (NDA). If a potential partner won't sign one, he has already played his hand. Move on. You don't need him.

FEBRUARY 16, 1999


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