Are there any disadvantages to partnering with a company much bigger than yours, and how do you manage them?
The following answers are provided by the Young Entrepreneur Council (YEC), an invite-only nonprofit organization comprised of the world’s most promising young entrepreneurs. The YEC recently published #FixYoungAmerica: How to Rebuild Our Economy and Put Young Americans Back to Work (for Good), a book of 30+ proven solutions to help end youth unemployment.
1. Where’s the Control?
The chief disadvantage of partnering with larger companies is the lost of control over timeline and positioning. Typically, you are rate-limited in progress by how fast the larger organization can move, and you won’t be able to directly control the channel partner to do what you want. You can’t manage your partners, but what you can do is set firm expectations and legal obligations from the onset.
—Victor Wong, PaperG
2. Watch the Time Sink
3. Beware of Bureaucracy
When working with a large company, it is important to recognize that it may take some time to identify the appropriate contact, and that the person you’re working with may or may not have the influence or bandwidth to get things done. Consequently, these relationships are time-consuming to build and can take a lot of effort for a small team to manage effectively.
—Garrett Neiman, CollegeSpring
4. Just Word of Mouth?
Partnering with a larger company can be great, but when it comes down to it, you are just another word of mouth for them. You sometimes do more work for them while they just let your name “appear” with them. Do what works best for you and do ask yourself if you really need to partner with them. If not, then don’t even jump on the boat with them.
—Ashley Bodi, Business Beware
5. Getting Lost in the Shuffle
A good partnership means that you have to have clear communication, which can be tough when you’re dealing with a company with multiple layers of stakeholders — each of whom may leave her position, veto a step or otherwise make the partnership more difficult to deal with. It’s not impossible to deal with, but when you have fewer personnel to shepherd a deal, it’s something you need to be aware of.
—Thursday Bram, Hyper Modern Consulting
6. Feature Creep!
When you partner with a large company, beware the “just add one more thing” disease. Large companies are used to getting what they want and will try to push you to write more features, add more support or customize your business around their needs, sometimes to the overall detriment of your business.
—Nathan Lustig, Entrustet
7. Retention vs. Innovation
Working with partners much bigger than you are rarely works out. Big companies are often very inflexible, slow moving, and sometimes require massive contracts that take months to negotiate and that they have no hesitation about pulling out of very quickly. The culture at many big businesses is about “job retention” rather than “innovation”, and biz dev people often keep themselves busy with meetings that go nowhere while trying to cover their behind. Despite numerous attempts, and thousands of hours, I’ve never had a partnership that made a big difference to our bottom line.
—Matt Mickiewicz, Flippa
8. Adjust Your Timeline
Manage your expectations regarding timelines. Everything takes forever in larger bureaucracies. Decisions have to be reviewed and approved by three layers of management and usually one committee — the red tape can really hamper your plans if you’re not realistic about the timelines you’re working with.
—Brent Beshore, AdVentures
9. Don’t Be Bullied
A bigger company can sometimes bully you around since you are the smaller partner. You can easily manage the relationship by being very clear with expectations and and terms of the relationship.
—John Hall, Digital Talent Agents