With the ever-evolving technology, companies are adopting technical partnership models to spearhead the growth of their businesses. Technical partners can help companies embrace the always-changing face of business technology and still meet their business goals. But building and maintaining technical relationships is not easy.
This article provides an extensive guide to understanding what partnerships are, the key elements on which they’re based, and how businesses can build and maintain meaningful tech partnerships.
What are Technology Partnerships?
Technology partnerships are a way for a company to implement and optimize its technical systems with assistance from outside parties. Tech partners work together to build products such as applications, integrations, and plugins. The partnership primarily entails exchanging and enriching data to offer more value to the customer and end-user. Tech partners are also responsible for ensuring smooth cooperation between IT systems and other partners to avoid hassle while transitioning from an old technology to a new one.
Tech partnerships are a great way to access the market, special skills, physical assets, tribal knowledge, and operational scalability—something that might not be possible for an enterprise relying solely on its native capabilities. Good technical partnerships are built on four foundational elements:
- Mutual trust: Technical partners must ensure that they can operate with a reasonable assumption of trust. Partnership agreements should highlight adequate contractual protections that give individual partners the space to thrive while allowing the partnership to achieve joint success.
- Mutual need: Parties should have identifiable needs that the other party can help fulfill. For instance, if one party needs sales, the other should have feet on the street.
- Reciprocal need: Both parties should benefit from addressing each other’s needs.
- Technological & Cultural alignment: Technological alignment means that both partners share the same tech environments and operate within the same technological domain. Cultural alignment refers to the work culture that both parties follow. For instance, a partnership between a team of 10 people who enjoy working 24×7 and an established company that works a maximum of 40 hours per week may not be ideal. However, sometimes this may be the only choice. It is, therefore, important that the partnership expectations take this disparity into account.
Partnership Models for Technical Partners
Tech partnerships typically follow four models:
- Equity deals: A fairly straightforward arrangement that trades equity for work. It may be structured as employee equity compensation, wherein equity is traded for specific benchmarks. An equity trade can also be a component of a blended deal. For instance, reducing upfront costs in exchange for equity in achieving a key benchmark.
- Revenue Sharing: In the revenue sharing model, a technical partner works at a cost decided under an agreement wherein the remaining work payments come after the company releases its MVP and starts earning revenue.
- Flexible payment terms: Flexible payments are usually built around equity or IP sharing and enable businesses to achieve more with less. It could either be a single payment structure for the duration of the partnership or an option to modify payment terms in case the start-up struggles to raise Series A.
- Adjustable work teams: This model allows start-ups to manage the transition from a tech partner to an internal development team. Companies can start with a 10-person external development team from a technical partner and gradually transition to a 10-person internal team. Not only does this give the company space to hire better people without a lot of pressure, but it also allows for building internal culture.
What are the Benefits of Technical Partners?
Technical partnerships can prove to be highly beneficial for small businesses with the following direct and indirect benefits:
- Drives Growth: A one-person team can get overwhelmed with the ever-evolving technology. Partnering with technological experts allows companies to work patiently with emerging technologies and gain knowledge about the same.
- Boosts Innovation: Good technical partners are creative in driving innovation to achieve better results and streamline processes tailored to your needs.
- Encourages Communications & Trust: Technical partners also serve as a springboard for establishing transparent communication and trust within a company. Regular and genuine conversations about goals, objectives, and challenges help keep things on track while allowing both parties to communicate honestly.
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- Access to Advanced Tech Support: Tech support costs are often too much for businesses to handle. However, outsourcing this service to technical partners gives you greater access to experienced technical assistance and automates tasks that would otherwise take up a lot of precious time.
- Improves Business Longevity: Good technical partnerships result in satisfied employees who feel valued by their employers. This improves productivity and motivation, thus helping the business’s overall growth.
- Brings new Tech Solutions to the fore: Technical partners also ensure that businesses are always up-to-date with changing technology, ensuring there is no lag in operations. Businesses can seamlessly adopt new software and technology with technical partners’ help without compromising their services.
In addition, having technical partners reduces risks of technology failure, allows companies to invest in tech and equipment more efficiently, gives access to more extensive IT support, and improves the business’s overall performance. Technology partners also help you decrease liability relating to data loss, cyberattacks, and compliance by implementing cybersecurity-best practices, deploying a data backup and disaster recovery solution, and ensuring your policies align with federal, state, and local laws.
Key Elements to Include in your Partnership Agreement
Highlighting aligned interests in a partnership agreement is crucial to ensure that the partnership achieves optimal results. in fact, getting this right will ensure that every other partnership element also functions smoothly. In addition to structuring the agreement concerning the models discussed above, involving your partner in the processes helps. Close alignment and integration will remove any relationship barriers hindering work. When you align your interests, the development teams view the company’s success as their success, and the two can then work as one efficient team.
An existing tech team can cut down the time it would otherwise take for a company to build a team and bring them up to speed. That said, partnership agreements should include provisions relating to the speed of work, such as when the team should be available and how quickly they respond to instructions.
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Lack of transparency is one of the most common reasons for the fallout of technical partnerships. Issues in transparency can lead to inefficiencies, affecting the quality of work and relationships. Regular product demos and feedback are one way to ensure that transparency about work is maintained throughout the partnership.
As work grows, it is possible (and highly likely) for priorities to change. Partners need to keep an open mind and be willing to adapt to changes in tactics. While following a predefined plan is ideal, flexibility is sometimes needed to address unexpected outcomes. For this, both parties must have a flexible mindset and are not rigid in their operation.
How to build and maintain Technical Partnerships?
Technical partnerships are unique and different from other kinds of partnerships. Here are 6 tips that you can use to build and maintain good technology partnerships.
- Talk to internal teams for suggestions: Everything begins at home! One thing to do while exploring technology partners is to talk to your internal team. They are the ones who can give a true picture of the issues that new or improved technology can fix. This can be done by joining team channels or scheduling one-on-one with members. Talking to internal teams also includes customer outreach, where you can either directly ask customers for feedback or check social media posts, comments, and online customer groups and talk to your customer service team.
- Outline your tech requirements and timeline: Technical partnerships only make sense when you have a goal to achieve. The first step is carrying out a company-wide technical competencies assessment. This can include developer capabilities, team size, API availability, etc. Once you’ve done that, draft an outline highlighting your requirements, timeline, and the deliverables you expect from your tech partner.
- Research: Now that you have your objectives, start researching for potential partners—ideally those who can offer more than minimum tech work. Researching will help you find partners who fit your goals for culture alignment, innovation, customer expectations, brand visibility, mutual needs and benefits, and trust.
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- Reach out to potential partners: After you’ve compiled a list of potential partners, get in touch with each to better understand their value. It helps to create a one-sheet that neatly summarizes your offer and a pitch deck highlighting the value your company will offer to the partners.
- Outline goals and objectives: As mentioned earlier, teams can run into unexpected challenges that may throw a project off course. This is precisely why it is important to outline expectations beforehand. The outline can include revenue goals, approval processes, key team leaders, sales targets, data sharing, other partnership expectations, support needs, etc. Since cultural alignment is also a key aspect of good technical partnerships, outlining them in addition to tactical documents is also a good idea.
- Decide success measuring tactics: Most of the time, companies put off measuring success until the launch of a project. However, success should also be measured in taking a product to the launch stage. It is recommended that partners outline the data they will use to calculate the value of the partnership—individually and together. Partners can either have individual criteria or share crucial data points. Irrespective, it is a good step to ensure that both teams proactively maintain the partnership.
Technology Partnership Examples
To get a more comprehensive understanding of technical partnerships, let us look at some popular tech partnerships.
Atlassian and Slack
This partnership includes over 10 product integrations, including Slack apps for Halp, Jira Cloud, BitBucket Cloud, and Confluence Cloud. This is a noteworthy example because the members of this partnership went from being competitors to partners. Together, they’ve built numerous tools that offer better support to customers.
Google Cloud and Spunk
This partnership focuses on making data-driven decisions easier for companies by helping them access and analyzes data at scale. This tech partnership gives both businesses a boost with advanced data sharing. Customers using Splunk Cloud also get access to Google Cloud security, networking, and AI, whereas Google benefits from Splunk’s data visualization capabilities.
Adobe and Klaviyo
Adobe has an e-commerce platform called Magento with various apps for online store owners. Klaviyo helps e-commerce stores turn customer data into insights for email personalization. This partnership has three benefits:
- It increases Magento’s authority with a popular app for e-commerce stores.
- It encourages store owners, who might otherwise be hesitant, to try Magento.
- It exposes Klaviyo to long-time Magento users.
When implemented correctly, tech partnerships can help your business grow multi-fold. Technical partners can add tools, capital, support, and exposure to new audiences. Working with experienced and knowledgeable teams is important to make the most of technical partnerships. Moreover, these relationships need to be pursued in a way that is right for you, your team, and the team you’re partnering with. The best way to get this done is to dig into research and put yourself out there.