Randy Weber

Let’s cut to the chase - No, it is not bad for small guys to partner with big guys.

Bronte Media references a post from Albert Wenger about small companies partnering with big Internet companies - Avoid David and Goliath Partnerships. The rationale:

Partnering with the biggest of the big on the other hand tends to be problematic because they are unlikely to be sufficiently responsive. […] So whenever possible, as a startup you should rely on mid size well established companies when it comes to strategic partnerships.

OK, I have lots of experience with this on both sides of the equation. All I can say is that there is some truth to this, but in general this is bad advice. At Verizon we worked with a few small companies and ended up essentially building their businesses and keeping them from dying during the dot.com bust. But I’ve also seen Verizon treat small partners poorly and likewise for other big companies that I’ve worked for. The key for the small player is to have a good contract that lays out how the relationship is to work and has sufficient penalties for not playing nice. Having an extremely responsive account management team also makes a huge difference.

Of course getting a solid contract is easier said than done. I didn’t like giving other companies much power over us when I was at Verizon. Likewise, the guys that were bigger than us didn’t like giving us much power. But if you can focus on win-win and genuinely add value to the bigger player, you can get to a place that works for both parties.

It’s worth noting that big companies in general don’t like doing deals with smaller players because of the risk that they won’t be around to fulfill their obligations. I was the guy that had the unfortunate task of delivering the bad news to hundreds of small guys that we wouldn’t do business with them and often the reason was that they weren’t established enough. Big guys tend to want to go with established players.

The thing that I think is most overlooked is that if the small guy can work a good deal with the big guy, it can make their business. It makes them a legitimate player and opens things up for additional deals with other large players and additional funding. This far outweighs the risk of the partnership not working out.

37signals wrote “Big business learning that smaller teams can rekindle the creative spark.”

The message: Keep teams small, give employees freedom and a sense of ownership, don’t focus too much on the competition, create a culture of experimentation, and use technology to enable remote teams.

They quoted the NY Times as saying:

By breaking huge business units into smaller, nimbler teams, companies stand a chance of rekindling the creative spark that got them rolling in the first place. After all, “small is the new big,” as Seth Godin, a prolific blogger and author, puts it in his 2006 book of that name.

I couldn’t agree more. When I was working at start-ups one product manager and one engineer could get more done in a day than an entire scrum team at one of my larger employers could do in a week. This came with the added benefit of nothing being lost in the translation and the ability to rapidly make changes until you got to where you wanted to be. I miss those days. It was very invigorating and both myself and the engineer walked away with a great sense of accomplishment and ownership.

Now go and spread the word.

Back in December 2006 I wrote about TiVo not keeping up in the quest to be the provider of the “sofa web.”

Om Malik at GigaOM discusses the new game consoles and the contribution they might make to Internet browsing. He refers to it as the “sofa web.”

It was announced that TiVo and Amazon Team Up - NYTimes.com. This is a positive step towards TiVo becoming part of the sofa web. I can’t wait to see more deals.