4 Reasons for Startups to Avoid Big Partnerships

We’ve all heard the story: an entrepreneur spends a tremendous amount of time and energy signing a big partnership only to have it result in nothing. Every. Single. Time. Personally, I’ve done the big partnership thing multiple times and never had it work out. Do as I say, not as I’ve done.

Here are four reasons why big partnerships fail:
1. Loss of Sponsor – When one person is driving the partnership, and that person leaves, there’s a good chance that the replacement person won’t feel as strongly about the relationship
2. Change in Strategic Priorities – While the partnership might be important when the deal was signed, that could change at any time as the company is continually changing strategic direction
3. Limited Early Results – Big companies operate with a shorter horizon, so if the partnership doesn’t yield great results immediately, there’s a good chance the partnership will be cut or downsized
4. Lack of Resources – While big companies have extensive resources and often talk about the possibilities of the partnership, many times resources are already committed to other projects and are in fact limited

So, the next time an entrepreneur wants to bet the business on a big partnership, make sure it’s crystal clear to them that most big partnerships fail.

What else? What are some other reasons big partnerships don’t work out?

2 thoughts on “4 Reasons for Startups to Avoid Big Partnerships

  1. My partner Cam Lanier and I had a saying when considering a partnership with a bigger company- “big boys and little boys can’t play together …..rarely works on the playground and almost never works in business.”

  2. 4 (More) Reasons for Startups to Avoid Big Partnerships – 1) multi-silo organizations resulting in 2) endless meetings contributing to 3) onerous contract terms = 4) s-l-o-w implementation (at best).

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