The startup was in a tizzy.
One of its largest partners who sourced the startup’s products, bundled them with other offerings and sold them to customers had decided to make the products itself.
The partner was much larger than the startup, had more money and reach. About 10% of the startup’s revenues came from this large partner, albeit at a lower margin than if the startup sold products directly.
On the other hand, it did not have to incur additional sales and marketing costs. For the partner, the revenues from the startup were a tiny fraction of its current revenues but the market opportunity was large and fast growing. It was quite possible that the startup would be in direct competition with its partner before long. The startup was therefore understandably nervous – should it continue to supply the partner or should it stop supplying products? Should it aggressively cultivate other comparably large partners while continuing to do business with this partner?
To read the full, original article click on this link: Partnership Woes – Who do I Partner With? Small Player or Big Player?
Author: Sanjay Anandaram
