Questions

How do I approach a potential partner who could build the feature themselves instead of partnering with me?

My start-up has built a very smart way of doing 360 degree manager reviews, which solves a real problem in the industry. We've redesigned the value-added feature so that it could be used to improve ANY existing 360 degree survey (with some integration). The idea is to open it up to our competitors so they can improve their own offerings to their clients. The danger is that they decide to build the feature themselves instead of partnering with us (probably take about 3 months of work). How do I prevent this and make it more attractive to work with us than doing it themselves? And should I approach the biggest players first, or start with the smaller guys?

4answers

I've gone down similar paths in the past. Here are your options:

1) Provisional Patent. if an implementation of their system to his new market would be patentable (i.e. using machine X to make donuts instead of jewelry), then you could file a provisional patent on the idea. Provisional patents are very informal and cheap. They can essentially be written on the back of a napkin, and filed for ~$100. They last for only a year, after which you have to convert them into a 'real patent', otherwise your idea will become open to the public to use.

2) An NDA. You could have them sign a non-disclosure agreement (NDA), which would have wording in it that basically says, "I'm going to tell you something, and unless you have existing proof that you already had thought of that idea, then you're not allowed to use my idea without my consent". Sometimes the company will not want to sign an NDA because they may have discussed a lot of ideas without writing them down, and by signing your NDA, they'd legally lose the right to use one of those non-written-down ideas. But it's worth a shot.

3) Rely on trust. The way to make this more likely to work is if you are good friends with a big investor in their company, or something like that. Some situation in which, if they steal your idea, they'd be ruining their reputation with someone they care about (they probably don't care about pissing you yourself off). If you don't have such a connection, maybe you can form one (linkedin, etc.).

If you'd like to discuss your options in more detail, incorporating actual experiences of mine, let me know,

all the best,

Lee


Answered 3 years ago

Have them sign an NDA.

You'd be surprised how many partners are willing to collaborate so that they don't need to build a particular feature themselves. They have their own roadmaps and initiatives. If your feature really is a value add to their offering and they feel they can sell it to their customers, I suspect they'll consider negotiating.

I personally wouldn't go to the biggest players first. There may be more departmental segmentation, more execs to convince, and more red tape involved in closing the deal. They also, like you said, have the capacity to build the feature themselves. NDAs are great and legally binding, but if you don't have the capital to stand up against them in court, you may be at a loss. You really don't want to be in a position where someone else holds all of the control.

You have something to offer. You should remain in the position of control (even if it does lead to a negotiation.)

Smaller or similar sized businesses may be more willing to join forces as it serves as a win win scenario.


Answered 3 years ago

Partnerships are about creating a win/win situation. Companies are in general open to partnering when you have to offer something that will allow them to win together with you in the market in an easier way than when they do it all alone.

From that perspective start with looking at the potential partners out there and define which one of them have the best fit with your company culture and product portfolio. Go for this low hanging fruit and approach those partners first. Decide if you will ask them to sign an NDA or not.

Partner selection and creating partnerships can be guarded by contracts but on the other hand trust is essential. If there is no fit and no trust then contracts won't help you to create a healthy relationship. Have a look at my 4-step guide to partner selection, it might be helpful: https://gumroad.com/l/cMyfD

Happy to jump on a call to dive deeper into this with you.


Answered 3 years ago

Go to all potential partners, although you might find the smaller ones easier to approach.

As someone mentioned, your sales pitch is basically selling the time to market & resources. If the feature is strategic, expect they will try to develop it themselves; if not, you are in with a shot.

For the first meeting, I would not spend too much time on NDA's & patents, however I would only talk about the overall solution and partnership. DNA's and patents will become important for the following meetings.

Go for it. The worst you could do is do nothing.

Good luck

PS: I think you will be pleasantly surprised on how much you will learn on your potential partners / competitors.


Answered 3 years ago

Unlock Startups Unlimited

Access 20,000+ Startup Experts, 650+ masterclass videos, 1,000+ in-depth guides, and all the software tools you need to launch and grow quickly.

Already a member? Sign in

Copyright © 2019 Startups.com LLC. All rights reserved.