Savvy companies use business development (BD) strategies to partner with leading industry giants to gain market dominance over their competition. However, some CEOs have perceived challenges when it comes to identifying the right partner(s). This leads to lack of patience and the belief that they cannot get a big company (sumo) to partner with them.
The perceived challenges vary: Some CEOs don’t believe in partnerships because they see no value in them, and they enforce that belief throughout their organizations. Other CEOs think they don’t have enough resources or that they are too small for partnerships. Still others are under the impression that partnerships don’t apply to their type of business. Sadly, these CEOs are missing opportunities to team up with a formidable company—a sumo—that can propel their company into market dominance by leveraging the assets and power that a strategic sumo partner can provide.
Just as in basketball where “boxing-out your competition” is critical to the game, partnering with a sumo company changes the strategic business landscape by providing you with a distinct advantage. I call this the sumo advantage. Alignment of core products, that involve both the product and the sales and marketing layers, has the potential to radically shake-up your industry and crush your competition. That’s exactly the effect you want to achieve.
Typically, you will find two or three companies that make strategic sense for you to pursue. Court them and have the confidence to close a deal with at least one. To propose the BD deal, you need conviction—a complete belief—that you will successfully partner with one of your sumos. When you know you have found your sumo, don’t stop pursuing them until a deal is sealed. To quote Napoleon Hill, “No one is ever defeated until defeat has been accepted as a reality.” But remember that with any BD deal, patience is king. BD will succeed only when you court your potential partner gently and ease them along the path toward agreement—slowly. Speed kills BD deals, so the last thing you want to do is try to get a commitment of any sort from any of your contacts too early in the process.
When you integrate your sumo’s capabilities with your own company’s core competencies, you are creating a turbocharger that will generate significant revenue for both companies. The deal between US News and World Report and Agent Ace is an example.
Startup company Agent Ace, which ranks Real Estate agents based on actual agent performance track record data, has partnered with sumo US News and World Report, a media giant that has great volume, online presence and great distribution. US News is a credible media company that ranks things we need such as doctors, schools, financial advisors, cars, etc. and is now launching Best Agents, which is the category of ranking Real Estate agents, and Agent Ace powers the effort.
This is a win-win deal as echoed by both US News and Agent Ace. Chad Smolinski, Senior Vice President of US News, said “The new Best Agents service supports our mission to help people navigate life’s most important decisions [and] … provides a strong foundation for our expansion into helping consumers with Real Estate decisions.” Mazen Fawaz, Agent Ace founder and CEO, stated “US News and World Report is a great media partner, instantly expanding our reach nationwide. With its focus on consumer advice and decisions, US News is a trusted resource for everything from choosing a college to planning for retirement. We look forward to helping them expand their consumer decision engine into Real Estate.”
To find your sumo, start thinking about what could be done with your assets. Think about where you want to go and what you need to get there. Think about how you can crush your competition. What would be a serious blow to them? What would make them take you more seriously? How do you become more relevant in your space? How do you ensure no one can knock you out?
1. To identify a great potential sumo and ensure a successful partnership, think about your competition and candidly answer these questions.
- If your competition and another company got together, would that hurt your company?
- Why would it hurt your company?
- Would it take customers away or make it more expensive to acquire customers?
- Would it limit your market potential or put you at a product disadvantage?
2. Make a list of all the companies that can help you shore-up those vulnerabilities. That’s the list of potential sumos with which to start.
3. Embrace the BD Mindset by structuring a long-term strategic deal, not a sales-focused transactional deal. On an organizational chart, the BD layer sits between the product development and the sales and marketing functions. While BD impacts all areas within a company, it affects these two the most.
4. Leverage your first sumo to get more sumos. Your first sumo is the big one and the hardest to get because of the risk factor of being the first. However, once you have your first sumo, other sumos will pay attention. Some will compete with your sumo and want to explore how they too can be a partner. Others will find you more credible—because of your first sumo—and will pursue you to explore a possible fit into a slightly different partnership. To bring more sumos calling, promote and exploit this universal market condition!
Your BD partnerships include how, when and why products are developed. The Sumo you’ve partnered with has unique advantages—aspects that made them the superior warriors in their own space. Your challenge is how to apply those same advantages to your market. This means linking the product development and the sales and marketing activities of both companies to create a new solution and crush your competition.