The Art of Partnering

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When I went through the security line at San Francisco International Airport this morning, I noticed this laptop with an Apple sticker pasted over its Dell logo (click to enlarge the photo if you don’t believe me). I thought this was very funny, so I asked its owner why he did this. He explained that he was tired of explaining why he had a Dell. I told him that I’d never heard of an Apple owner pasting a Dell sticker over the Apple logo, and he agreed that this was unlikely to happen. (At that point, he noticed my PowerBook’s Tony Hawk autograph, but I digress…)

This got me to thinking about how companies form partnerships–pasting each other’s logos on products and services and ending up with crap. The fallacy of partnerships–and how “partner” became a verb–is rooted in the dot.com days of 1998-2000. During these years, most startups didn’t have a business model, so they blew smoke about having “partnered” with big firms. Surely if a company partnered with Microsoft or IBM, it would be successful.

To this day, whenever an entrepreneur uses “partner” used as a verb, it bothers me because I hear, “Bull-shitake relationship that isn’t going to increase revenue.” However, I am not an angry little man, so in the spirit of improving what has become a flawed process, I offer The Art of Partnering.

  1. Partner for “spreadsheet” reasons. Most companies form partnerships for the wrong reason: To make the press and analysts happy. This is stupid. The right reason to form a partnership is to increase sales or decrease costs. Here’s a quick test: Will you recalculate the spreadsheet model of your financial projections if the partnership happens? If not, then the partnership is doomed. You can wave your hands all you like about “visibility,” “credibility,” and “acceptability,” but if you can’t quantify the partnership, then you don’t have one.
  2. Define deliverables and objectives. If the primary goal of a partnership is to deliver “spreadsheet reasons,” then execution is dependent on setting deliverables and objectives such as additional revenues, lower costs, penetration of new markets, and new products and services. The only way to determine whether a partnership is working is to answer quantifiable questions such as, “How many more more downloads of software occurred because our two web sites are now linked?”
  3. Ensure that the middles and bottoms like the deal. Most partnerships form when two CEOs meet at an industry boondoggle. The next thing you know they’ve concocted a partnership that “the press and analysts will love,” and the next step is to get the PR people to draft an announcement. Is it any wonder partnerships seldom work? Some people believe that the key to successful partnerships is that top-management thought of it. They’re wrong. The key is that the middles and bottoms of both organizations like the partnership–after all, they will be implementing it. Indeed, the best partnerships occur when the middles and bottoms work together and wake up one day with a de-facto partnership that didn’t involve top management until it was done.
  4. Designate internal champions. Long after the press conference and announcement, one person inside each organization must remain the champion of the partnership. “A bunch of people contributing to the partnership when they can” doesn’t cut it. For example, during the desktop publishing days of Apple, John Scull (not Sculley) was “Mr. Desktop Publishing” at Apple. His counterpart at Aldus was Paul Brainerd. So the responsibility for the success of desktop publishing came down to John and Paul–not John, Paul, George, Ringo, and a host of other part-time contributors.
  5. Accentuate strengths, don’t hide weaknesses. Companies form most partnerships to hide their respective weaknesses. For example, Apple and DEC formed such a partnership in the 1980s. Apple’s weakness was a lack of data communications strategy. DEC’s weakness was a lack of a personal computer strategy. So the two companies tried to put two and two together. In the end two and two didn’t even add up to four because DEC’s data communications strategy couldn’t help Apple, and Apple’s personal computer strategy couldn’t help DEC. The deal between Apple and Intel has better prospects because it is based on the companies respective strengths: Apple’s ability to design great consumer devices, and Intel’s ability to build fast chips with low power requirements.*(see footnote) And this partnership certainly has “spreadsheet” reasons for both parties.
  6. Cut win-win deals. A partnership seldom takes place between equals. As a result, the more powerful side is tempted to squeeze the other party. The weaker side, for its part, will begrudgingly accept such deals and try to get what it can. Bad idea. Bad karma. Bad practicality. If the partnership is a win-lose deal, it will blow up because concrete walls and barbed wire cannot hold a partnership together. Only mutually beneficial results can. In the long, the bitter seed of resentment planted at the start of a partnership will grow into a giant, destructive weed.
  7. Put in an “out” clause. No matter how great the deal looks, put in an “out” clause so that both parties may terminate the partnership relatively easily. This may seem counter intuitive, but if companies know that they can get out of something, they’ll work harder to make it successful. This is because easy out clauses can increase motivation: “We’d better keep up our end of the bargain because we need these guys, and they can walk.” Frankly, if all that’s holding the partnership together is a legal document, then it’s probably not going to work anyway. It’s hard to imagine that indentured servitude is a motivating model of employment.
  8. Ask women. Men have a fundamental genetic flaw. Actually, they have many fundamental genetic flaws, but I am only concerned with one here: The desire to partner (verb!) with anything that moves. They don’t care about practicalities and long-term implications. If something is moving, men want to partner with it. Women, by contrast, do not have this genetic flaw. When you come up with an idea for a partnership, don’t bother asking men what they think about it because they will almost always think it’s a good idea. Instead, ask women and gain some real insight as to whether the partnership makes sense.
  9. Wait to legislate. Remember in the Art of Recruiting entry when I said that an offer letter is the last step in the process? An offer letter is not properly used as a “strawman” to get negotiation going. The same thing applies to a partnership. After you’ve reached closure on the deal terms–the result of many meetings, phone calls, and emails–then you draft an agreement. This happens at the end of the process because you want the people to have psychologically committed themselves to the partnership. If you start the drafting process too early, you’re asking for nit-picking delays and blowups. Incidentally, if you ask for legal advice too early, you’ll kill the process. The best way to deal with lawyers is to simply say to them: “This is what I want to do. Now keep us out of jail as we do it.”

Written at: Marriott Hotel, Park Ridge, New Jersey

* Please God, take these two strengths and give us a laptop that has the Macintosh interface and a six-hour battery life. But then, God, why didn’t Steve talk about battery life in his keynote address?

Thanks, Tom Kang, for your outstanding contributions to this entry.

By | 2016-10-24T14:28:54+00:00 February 6th, 2006|Categories: Entrepreneurship, Marketing and Sales|48 Comments

About the Author:

Guy Kawasaki is the chief evangelist of Canva, an online graphic design tool. Formerly, he was an advisor to the Motorola business unit of Google and chief evangelist of Apple. He is also the author of The Art of Social Media, The Art of the Start, APE: Author, Publisher, Entrepreneur, Enchantment, and nine other books. Kawasaki has a BA from Stanford University and an MBA from UCLA as well as an honorary doctorate from Babson College.

48 Comments

  1. Graham English February 6, 2006 at 10:28 pm - Reply

    You always have unique hooks: “spreadsheet” reasons.
    🙂
    I won’t forget that one!

  2. Smittie February 6, 2006 at 11:10 pm - Reply

    I love explaining why I have a Mac. It’s even more fun dropping the other shoe and telling them that I left Microsoft to go to work for Apple.
    Aloha

  3. Viswanathan February 6, 2006 at 11:39 pm - Reply

    I think your 8th reason is more playing to the gallery than anything else.
    But truth to be told all the other reasons are valid, in the sense we should all give it a good thought.

  4. Charles February 7, 2006 at 12:30 am - Reply

    Ferchrissake, quit whining about battery life and go buy a second battery. You can afford the $90 and the extra few ounces of weight.

  5. John C. Randolph February 7, 2006 at 1:02 am - Reply

    Your comment about lawyers reminded me of another lesson I got from my first teacher in Entrepeneur’s Disease. The guy absolutely *loved* to spend money on lawyers. He spent so much time and money arranging the deck chairs for our “can’t miss, billion-dollar business” that our Titanic didn’t have to hit the iceberg… It never even got sent down the ways.
    I now consider it a major warning sign if someone who’s asking me to participate in a new venture starts by spending his $100K in friends and family money on legal fees.
    -jcr

  6. MJ February 7, 2006 at 3:00 am - Reply

    I’ve been in this situation.
    I always want to know WHY someone wants to partner with us. Things are always painted in a win for us – but there has to be a reason, otherwise why do it. Sometimes it’s them re-using our services in order to win a contract. Sometimes they’re effectively subcontracting us to their clients. Sometimes they just want access to our customer list. Sometimes it’s just kudos – they just want to be hip and happening with the cool cats.
    I’ve never signed any of these partnerships. I always want to see how things play out. In almost every case, I’ve not seen things play out during the trial period and that for me is evidence enough that what they’re offering is not much more than smoke and mirrors.

  7. Javier February 7, 2006 at 3:26 am - Reply

    I have quoted your point about asking women in my blog, duly quoting you. I find that point especially relevant to my blog for other reasons…:)
    Best regards,
    http://niquel757.blogspot.com
    Javier

  8. Audiolathe February 7, 2006 at 3:38 am - Reply

    Hmm.. asking women? Are you being nice now Guy..? Maybe we are just more sceptical.
    See the thing is we want to find a man we don’t want to change to partner with in the first place so I suppose it is this mindset that stops us from jumping on the first ship that sails by. And as you doubtless know, women can be quite good at thinking up things that should be changed, so finding a company/man/etc you don’t want to change takes longer but is ultimately more worthwhile.
    And caution in business has never costed as many jobs as recklessness..

  9. Ric February 7, 2006 at 5:26 am - Reply

    And I’ve got one of the Apple stickers I got with the iPod on my IBM T42 laptop – just don’t tell the boss!

  10. Luc Vaillancourt February 7, 2006 at 5:44 am - Reply

    To ad on point 4, when the numbers at stake justify it, I suggest both parties to send an “ambassador” working full time with the other’s team to make sure that the “culture” and knowledge is available at all time and can monitor the progress…

  11. Patrick Klatt February 7, 2006 at 6:28 am - Reply

    This is a pre-apology for the email you will recieve shortly. Hopefully you’ll be the victim of some long plane flight (soon) and take the time to entertain yourself reading too-lengthy emails and mine will fall onto the Read&Replied list. I was going to post here but I gave up after the two paragraph mark.
    And I’m not kidding about the apology.

  12. Kendall February 7, 2006 at 6:55 am - Reply

    Being a middle myself I couldn’t agree more. I have been involved in implementing hair-brained ideas from top brass that, to me, don’t make a whole lot of sense. And I also see opportunities to partner with organizations that sometimes the higher ups don’t see or agree with. I suppose I’ll just keep on pushing towards what I see as best and let the chips fall where they may.

  13. Home February 7, 2006 at 7:15 am - Reply

    Set up a contract with an out clause

    As we think about the next step in renovating the house, this quote is useful to consider.Guy Kawasaki: The Art…

  14. Anshul Jain February 7, 2006 at 7:47 am - Reply

    I dont know whether you have been to Singapore or not but here you will see a lot more of Apple stickers on IBM, Dell laptops. Even I have one. I think its a nice way to say that I LOVE APPLE BUT JUST DONT HAVE THE MONEY TO BUY IT.

  15. Modesto Business Law: February 7, 2006 at 8:29 am - Reply

    How to Put Together a Profitable Joint Venture

    The startup guru, Guy Kawasaki, again provides us with an excellent how to guide. This time it is about partnering, but I think the better term is a joint venture. He lays out a nine part checklist: 1. Partner for

  16. Digital Digressions February 7, 2006 at 8:38 am - Reply

    The Art of Leadership

    Inspired by a very heated debate last night with a friend who works as a consultant with big business people, coaching them on leadership skills, I’ve decided to embark on a series of posts in the vein of Guy Kawasaki’s recent .. The art of.. blog post…

  17. Rick Dobbs February 7, 2006 at 8:49 am - Reply

    Picking the proper partners will save your company. The companies that did well after the .com bust relied on their partners to make their quarters, and not the ones that they just press released on. They relied on regional integrators, tight-knit VAR’s, and others of that kind to keep revenue going when their own sales force couldn’t. Take care of your partners and they will not only take care of you, they’ll make you look great.

  18. John Koontz February 7, 2006 at 9:02 am - Reply

    I gave one of my partners an Apple sticker I received when I got my Mac Mini last year. He promtly placed it over the Dell logo on his laptop! Trend setter.

  19. Faisal Khan February 7, 2006 at 9:02 am - Reply

    :spreadsheet: indeed! Never had looked at it that way. But now I will.
    FK

  20. Vooed Business Marketing February 7, 2006 at 9:15 am - Reply

    Forge An Alliance with Linear Industries

    Most likely a confusing topic name, but I couldnt think of any better way to express the need for an alliance. Stephen Labuda says on the subject:
    find another business in your market but that is not a direct competitor and then team up to ma…

  21. Micke Griffin February 7, 2006 at 9:47 am - Reply

    Hey Guy… btw… ur blog DONT suck… i keep it in my safari bookmarks folder (for u dummines using IE… keep on guessing)!
    I placed my apple sticker (from G3 iBook) a couple of years ago on my dell.. all my colleagues wondered why… i said Duh!!! Where you from??
    Rock on Guy!!!

  22. Creative One February 7, 2006 at 10:29 am - Reply

    Gk,how’s Kyle and prescott doing? are they still inspire to make film loop a successful company. Is Film Loop still in beta mode because I haven’t seen Kyle or Prescott promoting their company.

  23. JR February 7, 2006 at 10:40 am - Reply

    Your post about partnerships is just as applicable to consultants like me as it is to larger business. I’ve met many people that wanted to be my partner because they wanted access to what I had not because they wanted to share what they had. I did however recently partner with another consultant to offer a teleseminar on a subject of interest to his clients. I have had direct and immediate “spreadsheet” impact from this partnership.
    I’ve recommended your blog to a number of entrepreneur clients of mine and the feedback has been rewarding. Most are finding something of value in your blog. Keep up the great blog!

  24. Brady Archambo February 7, 2006 at 10:40 am - Reply

    Haha. I bought an iPod a while back and it came with some Apple stickers. I put one of them over my Dell logo on my laptop. Everyone always asks me about it. It’s nice to know that I’m not alone.

  25. David February 7, 2006 at 10:54 am - Reply

    Apple v. Windows power comparision:http://snipurl.com/macpower
    In general, Apple’s profit margins come from its “cool” factor, as opposed to a quantifiable power rating. Jobs plays to the “Wow!,” not the solid performance.

  26. Graham S. Lopez February 7, 2006 at 1:29 pm - Reply

    Number nine highlights the mistake entrepreneurs and business owners make when it comes to retaining counsel. If you are not comfortable having an attorney at every stage of discussions, change your attorney.
    Attorneys are vital during negotiations and leaving them out until the end is a grave mistake.

  27. Greg M February 7, 2006 at 10:12 pm - Reply

    That’s What everyone is asking, why no mention of battery life, with a 30% brighter screen there has to be batter issues even if the chip does use alot less power!!
    Anyways again another great post!!! Keep it up!!
    Greg!!

  28. Ryan Storgaard's Blog - Microsoft Canada ISV Developer and Platform Advisor February 7, 2006 at 10:33 pm - Reply

    Guy the Art of Partnering

    Man, GuyKawasakihas been absolutelyrippin’ up the blogging world over the last month….

  29. Ralf Haller February 8, 2006 at 5:09 am - Reply

    I agree with most of your points Guy. There are a few cases where partnerships have worked but in probably 90% of all cases they fail for at least one party. The probably most successful ones I know of are:
    IBM. Get their partner directory (Yellow Page like book) and you will understand why this has worked for them!
    eBay. In Germany e.g. alone they have 170k or so people making some sort of living by being an eBay sales rep.
    Google. Just take a look at Guy’s blog site further down on the right and you understand.
    Interestingly, all of the above celebrity companies made partnerships work for them. I think the question is why did it work for them and for so many others not?

  30. Random Thoughts February 8, 2006 at 10:42 am - Reply

    Top Quote #2

    Interestingly, the second in my new Top Quotes series also comes from Guy Kawasaki: The best way to deal with lawyers is to simply say to them: “This is what I want to do. Now keep us out of jail…

  31. Smittie February 8, 2006 at 11:22 am - Reply

    So, real world example, what are the spreadsheet benefits of the partnership between FilmLoop and PhotoBucket?
    Aloha

  32. Katie Nittler February 8, 2006 at 6:50 pm - Reply

    Of course I am biased about the 8th Reason – there is no doubt that both men and woman contribute different perspectives to partnering.

  33. Su-Ho Hwang February 8, 2006 at 7:34 pm - Reply

    I find your blogs offer a lot of insights, and I wish there is a table of content so the past entries do not get buried. Decided to create one over here:
    http://www.suckingfish.com/view.do?crumb_id=csid_1149
    Maybe this will be helpful to others as well.

  34. Gordon in Taiwan February 8, 2006 at 8:37 pm - Reply

    I’m loving this blog Guy (you just made a sale off the back of it), and especially all the ask-a-woman tips that appear all the time! P.S. Do you think Apple are subsidizing the new, cheaper Nanos?

  35. Guy Kawasaki February 8, 2006 at 9:45 pm - Reply

    Su Ho,
    Thanks for doing this! I love it.
    Why do I only get three stars?
    Guy

  36. Sand Hill Slave February 8, 2006 at 10:16 pm - Reply

    One of the worst examples of “partnering” during the boom time = [email protected] Remember THAT one, people??
    Guy, you beat me to the punch on my next post – it was in reference to a rag fest I had with a girlfriend -since when did the term “partner” turn into a verb?
    You do realize that all this advice translates into relationship advice, right? Perhaps you can write an entry on that. God knows, I could use the advice. 🙂
    Slave Girl
    http://www.sandhillslave.com

  37. Su-Ho Hwang February 8, 2006 at 10:44 pm - Reply

    Sorry Guy, it is a design fraud in that the ratings of the links that have no note are not accurate. I was planning to add notes/rating to each link as I go through them.
    Anyway, just changed them to all 5 stars, but that will change as soon as someone add a note.

  38. Guy Kawasaki February 8, 2006 at 11:35 pm - Reply

    Su-Ho,
    You can go ahead and keep every entry at five stars. 🙂
    Guy

  39. Guy Kawasaki February 8, 2006 at 11:44 pm - Reply

    Sand Hill Slave,
    I read your web site. You are very, very funny. You do prove that there is nothing funnier than the truth.
    You could be the next Denise Caruso–you might not know who she is. Back in the 80s and 90s she had the best rumor column in the valley.
    My fond regards because of your efforts to show that the feces have no clothes.
    Guy

  40. Wilco van Duinkerken February 9, 2006 at 4:18 am - Reply

    Partnering with other business has a great deal to do with the position of you and your partner in the supply chain and the relationship that’s already in place. Some interesting books about industry wide partnerships are:
    The Extended Enterprise: http://snipurl.com/extent
    Value Nets: http://snipurl.com/valuenet
    You might also google for: “E-procurement” and “Extended Enterprise”
    Have fun reading!

  41. Sevenline internetiturundus February 9, 2006 at 8:34 am - Reply

    Partnerlus

    Guy Kawasaky kirjutab oma ajaveebis partnerlusest. Miks kellegagi sõprussuhteid luua ja miks seda mitte teha. Pöörake tähelepanu rahale. Kui partnerlus kajastub pangaarvel on sel jumet, kui aga mitte…

  42. Shree February 12, 2006 at 1:30 pm - Reply

    Interesting read. I reached the article through a comment on my article about ‘stickers on gadgets’ on my blog.
    http://shreerams.blogspot.com/
    -Shree

  43. Kim February 15, 2006 at 11:18 pm - Reply

    You made the sexual metaphor in #8, but I thought #3 cried out for one: “If the middles and the bottoms aren’t going to be a good fit, it doesn’t matter what the heads think” 🙂

  44. Paul Cartwright February 20, 2006 at 1:06 am - Reply

    Guy,
    It’s unfortunate that you write with such a profound anti-male bias. Point #8 is not only incredibly offensive, it isn’t even true. As a young man in the SF/Bay Area, I must point out that women partner much more readily than men, both romantically and otherwise. If there is a difference, it’s that women tend to partner “up”, in terms of wealth and power, while men are relatively ambivalent, considering more local and tactical issues.
    Respectfully,
    -Paul.

  45. free fall February 25, 2006 at 10:44 am - Reply

    on start

    Its been a whole month since I first finished reading chapter 1 of Kawasakis new book – the Art of the Start (the Art from now). Here I will give a brief note for what I consider to be the most rewarding points for my own e…

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  47. Marketing & Strategy Innovation Blog September 5, 2007 at 1:33 pm - Reply

    The Art of Partnering

    by Guy Kawasaki When I went through the security line at San Francisco International Airport this morning, I noticed this laptop with an Apple sticker pasted over its Dell logo (click to enlarge the photo if you dont believe me)….

  48. URL November 2, 2007 at 2:56 pm - Reply

    Will work for equity (or food)! The URL links to my partner want ad. In addition to finding someone in the Pennsylvania / New Jersey area, I hope this ad provides some comic relief to our entrepreneurial brothers on the west coast. “Art of the Start, Philadelphia Style” is a work in progress.
    🙂

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