Tuesday, December 14, 2010

The Art of Partnering Successfully -- Here's How

I have been fortunate to have led several successful companies that have achieved great results both for investors and employees alike -- as well as its partners. All of my VC-backed companies (eNow/Relegence first, Musicmatch second, SightSpeed third, and now Sorenson Media) have been partner-driven -- and I have focused on building successful partnerships of all kind (distribution, marketing, joint ventures, licensing) throughout my ever-lengthening two decade plus career.

I frequently am asked the fundamental question -- how do companies partner effectively and why have your relatively small companies (i.e., the "Davids" in this discussion) proven to be a better fit than 800 pound "Goliaths" for global blue-chip partners like Logitech, Dell, Google, Shutterfly and numerous others?

Of course, there is no "one answer" to this question -- several factors come into play. But, consider these as being absolute prerequisites to partnership success (and -- to be clear -- success means first and foremost success for your partners):

(1) You must be best in class, period. At Sorenson Media (as well as my former companies) this IS our mantra. And, in the case of Sorenson Media, as online video has now become strategically critical to many (with emphasis on "many"), we are THE most established brand and company for encoding in this online video "space" period and, accordingly, we are a natural choice for partners; no other companies (big or small) can say that; to be clear, this is a badge of honor rather than boasting; we don't and cannot rest on our laurels -- we absolutely must out-innovate and delight our users and partners alike (after all, partners are also our customers); we must listen and learn from them -- that is the best way to improve; and, we must never take our users and partners for granted; we must continuously earn their trust; we can do this better than the "Goliaths" because each partner matters more to us (significantly more) than they would to larger companies driven by their own agendas; we are like Avis -- we simply try harder!;

(2) You must be flexible and open. Sorenson Media supports the widest array of formats both on the input and output side (we are known as being Swiss in this way, because we are neutral in this regard -- others in our "space" (both big and small) are not -- case in point, Apple's Final Cut (and its Compressor encoding engine) which does not support Flash; this is a critical differentiator for us compared to the competition;

(3) You must be built to partner, partnership "friendly" and partnership proven. Sorenson Media WAS built to partner, IS partner "friendly," IS partner proven, and IS a partner for the long haul -- and this ain't just talk:

First, our architecture, our back-end, our customer support, all of it -- was built with partnerships in mind; we are built to scale and have an established and proven Cloud-based global infrastructure; we also can be far more flexible than others (both big and small); we can implement quickly and efficiently, and we can deliver important back-end reporting and more; we also prioritize customer support and take it very serious, because all success flows from customer satisfaction and we know we need to continuously get better;

Second, our team -- both on the business and development side -- is partner "friendly"; we have extensive partnership experience and we pride ourselves in listening to our partners and meeting THEIR timetables and development roadmaps and THEIR needs (as just one example, we are happy to customize our partner solutions and white label them); others (big and small) simply are not and cannot be as flexibl, because they were not built with partnerships as a foundation -- in other words, it is not part of their DNA. Partnering effectively is a fundamental aspect of our growth strategy. So, get to know your partners at an individual level to understand their needs. If they are successful, you will be successful.

Third, we are partner proven both on the business side and development side -- we have a long history of working closely with partners; and, of course, we are an established brand with the best reviewed encoding solutions.

Fourth, we are here as a partner for the long haul -- and we have a much different story here than virtually everyone else in the space. We uniquely have been doing this for 15 years and have been long-term profitable. While virtually all other companies are in a constant need to replenish their coffers through more and more VC funding -- and are, therefore, vulnerable -- we have an extremely healthy balance sheet and are in no need for new funding. That means we can focus our time on our partners, rather than on fund-raising efforts. Think of us as being the Allstate of encoding -- "You are in Good Hands."

Other factors come into play, of course, but these are just some of the considerations for companies looking for encoding solutions (which is every company that wants to get its videos online).

One final note -- the fact that our company is best positioned to meet the needs of partners should be of no surprise, because we have seen this time and time before when smaller "nimbler", more focused and more responsive companies succeed over much larger "rivals" who have their own agendas. When I previously served as CEO of SightSpeed and President & COO of Musicmatch, for example, we also succeeded in meeting the needs of multiple partners across multiple channels, even though we too were up against others much bigger than us. The same general concepts and conclusions above applied during those days as well. The point is this -- these same concepts/lessons apply in any industry. They are a roadmap to significantly improve the chances of success.

So, at the end of the day, how do we succeed in partnering? It really is very simple -- we put each individual partner's needs first. While that may sound a bit cliche, you may be surprised how difficult it really is to build a successful business with that kind of overall philosophy and business model. But, we are doing just that. It takes many things to make that happen -- unique talent, unique expertise, unique experience, unique contacts. And, you need all of those things to succeed. That is a tall order.

(4) Oh yes, you must have the right team and passion. It takes one more critical factor -- THE single most critical factor from which all the rest of it flows -- you must have the right team and passion. The passion to innovate. The passion to "win." And, the passion to change the world. I can tell you this -- our team has it in spades. Not only is our team talented and focused -- we "stick to our knitting" and singularly focus on providing the highest quality differentiated video encoding solutions. This is not just a job -- we really want to offer the best solutions for our customers so that they can harness the unique power of offering the highest quality video online.

(NOTE -- this post is a revised version of an earlier post written a couple years back when I was CEO of SightSpeed -- I have updated that post because the same lessons apply -- in other words, these "truths" are universal.)