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The secret to rapid product growth is not to do it alone.

Don't believe me? Let’s take a look at the time when the worlds of hip-hop and rock collided and created a classic. 

You might have heard of the 1986 Run-D.M.C. track Walk This Way featuring Aerosmith. Well, it happened by chance.

In 1986, Rick Rubin was producing Run-D.M.C.’s album “Raising Hell.” He was a fan of Aerosmith and suggested covering Walk This Way (which was originally released a decade prior in 1975), believing that blending the two genres would create something ear-pleasingly unique.

It led to a historic music video, a massive hit, and it played a pivotal role in popularizing hip-hop to a wider audience. It also marked a significant moment in music history, illustrating the potential for innovation and fusion between different music genres.

music album screenshot
So, if you think you can do it all alone—you can’t. And I don’t want you out there singing Celine Dion’s All by Myself.

The point is that making a winning product often depends on the successful partnerships you forge. This is true for start-ups, scale-ups, and corporates.

In this article, through the power of music, we will zoom in on why you need to strike strategic alliances, how to initiate and forge lasting ones, and while at it, let’s throw in a template. To wrap up, we’ll explore 5 of my all-time favorites.

It’s time to hit the high notes of your product success with strategic alliances!

4 Good Reasons to Build Strategic Alliances

Let’s face it—even when you have the coolest product that serves customers’ needs like no other, you need to stay ahead and keep your competitive advantage.

My bet is that you won’t have the resources or capabilities to do this alone, and your competitors are not sitting still.

You need allies. The world is run by alliances, and it's no different in business.

Let me give you four key reasons to start a product partnership.

Why You Need To Build Strategic Alliances screenshot

1. They're a revenue booster.

Cash rules everything around us. If you want to make a decent living from your product, strategic alliances are crucial.

In a benchmarking survey done by Demand Gen Report, almost all participants agreed partnerships are key. Moreover, 82% of B2B industry decision-makers planned to grow their partner base.

How does it drive revenue growth? Building new features is expensive. Alliances reduce these costs, as you don’t need to reinvent the wheel and build it yourself. Additionally, there is an opportunity to expand your customer bases and increase product value and innovation, which all contribute to driving revenue growth. 

2. They amplify growth.

Just as reviews and recommendations from friends and family influence your buying decisions, if you’re not familiar with a particular product but know the product it is partnering with, you’re more likely to give it a shot. 

Associating your product with a reputable partner enhances your brand’s credibility. It enables you to get access to a new customer segment.

In addition, co-creation can open new markets. Through collaboration and evolving your products, you have a great opportunity to create something that appeals to a new niche.

3. They can help you uncover new opportunities.

The potential of new opportunities should not be disregarded. Strategic alliances can significantly boost the overall value of your offering.

With the right partnership, you can gain access to complementary technologies, features, and resources that enhance yours. It makes your product more attractive, which could justify a higher price.

You could also choose to bundle your products to create added value for your customers.

4. They can spark innovation.

I have a soft spot for things I wish I could build but lack the expertise to do. I love getting people together who look at a problem from a different point of view and cook up something mind-blowing.

Strategic partnerships that spark innovation are critical to any company’s success. Nope, I didn’t just come up with this. There have been tons of studies and surveys all coming to that same conclusion. One by HBR mentions that 94% of tech executives feel this way.

How To Start Your Strategic Alliance Journey

Now that you know what you have to gain, how can you ensure that your strategic alliance isn’t part of the 70% that fail?

It certainly helps to be thoughtful about every step: deciding who to partner with, the scope and expected ROI of the partnership, and how you'll execute it.

So, let's start at the beginning.

How To Start Your Strategic Alliance Journey screenshot

🚨Template alert! 🚨

Feel free to use this template to track and evaluate your potential alliances.

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Step 1: Identify Opportunities

Do you know how they say that your relationship with yourself sets the tone for every other relationship you have? The same applies to your product partnerships. To be able to identify potential partnership opportunities, first answer these questions:

  • What is your product vision and mission? (To explain why potential partners should be interested.)
  • How well are you moving towards achieving it? (To define shortcomings and opportunities.)
  • Who are you serving? (Using your Ideal Customer Profile, and looking at the markets and clients you serve, helps you find matching partners.)
  • What are your core product strengths and weaknesses? (To help your potential partners understand the value of a partnership with you, as well as to help you find interesting partners.)
    • What do your customers tell you they’d like to see that you haven’t been able to deliver?
    • What does your product do better than any others?

Step 2: Research the Value Potential

With the fundamentals in place, it is time to identify potential partners.

Create a long list of companies that create value or help you expand into a new customer base. Describe why they are interesting allies to engage with. Capture company details such as product features, key strengths, customers, and company values.

The research not only helps you identify the right partners, it also helps you build a relationship with them later on.

Step 3: Define The Alliance Type

You know the expression "all roads lead to Rome?" (It's a little outdated, but you get the meaning.) The same counts for product collaboration.

Identify which of these four product collaboration types has the most potential.

Defining The Alliance Type screenshot

1. Co-innovation alliances

This involves sharing resources, expertise, and knowledge to create something new that benefits customers.

2. Licensing alliances

This collab happens when you partner to borrow a trademark, patent, or tech to make something new and awesome.

3. Distribution alliances

This happens when you team up to get your product out there on their stomping grounds (and vice versa). It's about reaching out to a wider public and racking up those sales.

4. Joint branding alliances

In other words, teaming up to create a product that brings out the best of both worlds. Joint branding is done to boost brand recognition and cook up something one-of-a-kind.

Author's Note

Author's Note

There is a fifth alliance type, known as co-creation. Co-creation refers to a process of co-innovating with your customers. By bringing them into the development process, you’re essentially developing a bespoke solution for them—but this is a little outside the scope of this article. Though this is a great way of collaborating, I’ll focus on the ones that are easier to adapt into your existing business model.

Step 4: Shortlist Your Potential Partners

Between the types of alliances you can have and the sheer number of potential partners there are in the world, it can be tempting to go all-in on alliances and bite off more than you can chew. My best advice is to stay laser-focused on what you aim to get out of the partnership and which has the most potential. 

This is no exact science, but consider the market served and the covered customer needs. Scratch off those that offer a dubious return on investment value and reduce the numbers till you have 10-15 potential candidates.

Step 5: Add a Layer of Opportunism

Never underestimate the power of mere coincidence. Many successful partnerships have been the result of being at the right place at the right time, like:

  • Investors who play matchmakers for their portfolio companies, brokering deals between them.
  • Conversations at networking events that turn into partnership opportunities.
  • Founders seek advice from other founders and find out there is a mutually beneficial opportunity to collaborate.
  • An employee leaves on good terms and uses their connections to get the ball rolling on a partnership in their new company.
  • Competitions in which the winner gets an opportunity to partner with and solve a problem for a given company.

Building the Perfect Alliance Synergy

Let's assume you've short-listed the most promising potential alliances and are ready to go. Keep in mind that alliances are relationships, and like all romantic relationships, they require maintenance.

Here are some tips to keep your partnership happy, healthy, and long-lasting.

Tip 1: Nail The Prerequisites

Nailing the prerequisites is essential when initiating the product partnership. It sets the stage for a successful and mutually beneficial collaboration. 

This not only refers to getting a mutual understanding of what each brings to the partnership but also the evaluation of whether your values, approaches, and organizational cultures are compatible. 

This helps in defining:

  • Partnership goals and vision
  • Scope of the partnership
  • Resource allocation
  • Roles and responsibilities
  • Success criteria

In the end, nailing the prerequisites ensures that you are well-planned, aligned, and equipped to achieve your mutual goals while minimizing potential risks and challenges along the way. 

Tip 2: Understand The Power Dynamics

It's always good to understand where you stand with your partner—and that rule also applies in a strategic alliance. It’s a bit like dancing, as it takes two to tango.

If we follow the dancing analogy, you can either lead or follow. If you're the leading partner, you initiate the dance, set the rhythm, and guide the overall direction. This means you can drive the vision and strategy and have more decision-making power. Most likely, you can also guide the following partner to invest more as they’ll be more eager to do so, which will result in a bigger gain for them.

If you are the following partner, you’ll complement the leading partner’s role and respond to their cues and movements. No need to undersell yourself, as you bring your own strengths and contributions to the partnership, supporting its overall success. Any great partnership is about fairness and being mutually beneficial.

And if you are equal partners, you can collaborate on exactly who owns what aspects of the alliance.

Regardless of the dynamic, make sure the details of the agreement are thoroughly documented, and nobody does anything until you've both signed contracts.

Tip 3: Treat trust like it's fragile—because it is.

Speaking of contracts, great partnership is built on trust. I’ve seen partnerships that start with “Who does what,” “How are we sharing profits?” and “Sign this or that so then we can talk." They rip the energy out of co-innovation and turn it into an uninspiring, transactional exchange devoid of the meaningful connections and shared values that make partnerships truly thrive.

Of course it's important to get all of this in writing, but that should happen once everyone is already excited about the opportunity. Otherwise, it's kind of like asking your girlfriend to sign a prenup right before your proposal.

If there is no trust, carefully reconsider and be ready to step back and move on. Don’t be afraid you won’t get new opportunities. You’ll be surprised how there is always a new partnership opportunity just around the corner.

5 Examples Of Kick-Ass Strategic Alliances

If this is all still kinda abstract, take a look at these five examples of strategic alliances that truly rocked.

1. Co-innovation alliance: Dent Reality x Apple

Dent Reality x Apple screenshot

Dent Reality provides an Augmented Reality navigation solution. In 2020, they teamed up with Apple and became their only partner in creating indoor maps for indoor AR navigation.

For Dent Reality, it was an excellent opportunity to get access to a broader platform to showcase and implement its technology. For Apple, it was a low-cost way to improve its product's indoor navigation services, helping them keep their competitive advantage. 

2. Licensing alliance: Nike Kyrie x Spongebob Squarepants

Nike Kyrie x Spongebob Squarepants screenshot

Nike Kyrie teamed up with “SpongeBob” for a collection created in collaboration with Paramount Consumer Products, which owns the Intellectual Property. The footwear range features SpongeBob, Patrick, Squidward, Mr Krabs, and Sandy.

3. Distribution alliance: McDonald's x Coca-Cola

McDonald's x Coca-Cola screenshot

This one goes all the way back to 1955 and is a true right place, right time partnership. McDonald's and Coca-Cola have long targeted similar customers. Both benefit from their partnership in risk reduction, marketing, promotional activities, and reaching customers. For fun, just Google McDonald's x Coca-Cola Glass and see the number of results. Pretty impressive!

4. Joint branding alliance: Redbull x GoPro

Redbull x GoPro screenshot

GoPro and Redbull, both lifestyle brands, are all about being active, adventurous, daring, and extreme—so they realized there might be a golden opportunity to team up.

And oh, were they right! In the partnership, GoPro provides athletes and adventurers with equipment and financial support to film races and stunts from their perspective. Meanwhile, Red Bull organizes and sponsors these events.

5. Co-creation alliance: Lego

Lego screenshot

Ah, LEGO. Who hasn’t played with (or stepped on) it at some point? LEGO knows that and has leaned into it by developing a co-creation alliance with customers.

Users can submit their LEGO ideas to the company online and vote for their favorites. If 10,000 different users support the project, the LEGO team reviews the idea for possible development. Awesome co-creation, right?

Be better together.

Success often depends on building bridges and finding partners who can elevate your offering. Striking strategic alliances is fun to do—and it's surprising how much opportunity is out there.

I would encourage you to keep a structured approach to identifying, initiating, and nurturing these alliances.

Remind yourself about the importance of trust, empathy, and fairness in negotiation.

I’ll leave you with saying, remember that just like musicians collaborate to create masterpieces, successful products rely on the art of forging strategic alliances.

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Klaas Hermans

Klaas Hermans, has 10+ years experience in product management, digital and innovation, ensuring value delivery daily. He enjoys energizing and motivating teams that create and exceed product expectations.