Engineering 245The Lean Launch Pad

Session 7: ChannelsSteve Blank,

Ann Miura-Ko, Jon Feiber

http://e245.stanford.edu

KEY PARTNERS

which partners and suppliers leverage your model?

who do you need to rely on?

Test Hypotheses: Key Partners

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Why have partners?

Faster time to market

Broader product offering

More efficient use of capital

Unique customer knowledge or expertise

Access to new markets

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What defines a “Partner?”

Shared economics

Mutual success / failure

Co-development/invention

Common customer

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“Whole Product”

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ComplementaryServices

ComplementaryProducts

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Whole Product Partners and Allies

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Us

Us

Us

Us

?

?

?

?

US

Assemble for a one-time project

Recruit for a repeatable whole product

Include to minimize sales friction

Eliminate to retain margin

Only engage partners when they can supply a part of the whole product that you either cannot or do not want to provide

Only engage partners when they can supply a part of the whole product that you either cannot or do not want to provide

© TCG Advisors LLC

Two different types of partner ecosystems

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High volumeTransaction orientedOutgrowth of value chainsOrganize around a concentratorFocus: efficiency, speed, and

market scalability

High complexityRelationship orientedOutgrowth of project teamsOrganize around an orchestratorFocus: expertise, innovation, and

market development

CoordinatedCollaborative

Cisco, Boeing, Android, Goldman Sachs

Facebook, Google,Nike, Charles SchwabGroupon

© TCG Advisors LLC

Example: Boeing

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Collaborative

Example: Mobile Location Based Applications

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Collaborative

Example: Groupon

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Coordinated

Managing partners is difficult and has risks

Impendence mismatch – “ants mating with elephants”

Longest element of partners schedule becomes your longest item

No clear ownership of customer

Products lack vision – shared product design

Different underlying objectives in relationship

Churn in partners strategy or personnel

IP issues

Difficult to unwind or end

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Who makes the “best” partners?

(all of the same entities that we have been talking about in this class!)

Customers: Get them invested in your success beyond separating them from money

Suppliers: Unique products for you, financing terms, time to market

The Channel: Do they really win when you do? Are you accelerating their growth? Can they help you define the best product?

Rethink these relationships – get as many other people and organizations invested in your success and you in theirs!

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Strategies for Successful partnering

Start slowly –

gain expertise and ability to evaluate partners

Be a good partner (very few companies are!)

Focus on ownership –

who owns success in your organization?

Be flexible – when you get to “contract enforcement”

it is the beginning of the end

Constantly re-evaluate –

declare failure and move on before it is too late

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