By Avery Faller
Speaker: Drew Lipsher
Company: Clear Channel
Sometimes—more often than not—you will find that your company cannot complete its goals alone. Partnerships, between your company and other corporations, academic institutions, customers and maybe even competitors, can be key to achieving success whether you are a web startup or a manufacturing plant. Last week, Drew Lipsher of Clear Channel spoke to the Summer Fellows about methods you can use to help you make successful deals.
Making the Deal
Over the years, Drew has worked in a wide range of industries from beer brewing to music. This diversity of experience has allowed him to draw conclusions about larger trends in how businesses interact. When meeting with potential partners, especially larger companies, Drew encourages startups and small companies to bring three great (often unsolicited) ideas of ways you can add value to the first meeting. Drew pointed out that if you enter the conversation with three great ideas you are essentially offering them options for three different types of partnerships that they could enter into with you, allowing them to choose which type of relationship will be best for them.
“Make their job easy,” Drew said, referring to your potential corporate partners. “Make it easy for them to say ‘YES!’” While a company may say ‘no’ to one idea, it is really hard for a company to say ‘no’ to three great ideas. And let’s define exactly what it means to be a ‘great idea.’ These are not just ideas that you thought of in your car ride that morning; these are well-researched, presentation-worthy ideas--ideas that you have financial models for and have done focus groups on. This type of preparation significantly reduces a company’s reluctance to embarking on a partnership as they have proof for their higher-ups that it will be valuable to them. All these methods are essentially ways to make them want the deal as badly as you want it, increasing your odds of a positive outcome.
Also, be sure to think about all the things that could potentially go wrong down the road and proactively build in “outs” to the contract or relationship. (If a company is asking you for exclusivity, will you then require a minimum commitment?) Although your partner may be much bigger than you, you don’t have to revere them. Make sure you structure a deal that is favorable not only to them but also to you. You don’t want this deal to kill your own company.
Partnerships are a great way for you to grow your business, but don’t be surprised if for your first few you have to do more than your fair share of brainstorming and development. While this or that deal may be critical to the future success of your company, your partner may have no such motivation. So as eager and enthusiastic as you are, be prepared for a long deal-making process ahead of you.Read More