Partnerships can turbocharge #growth of your scaleup, especially if 💎 Sumo partners we talked before work out. But why do these large companies expect a ~ 2X increase in the importance of partnering? What's really going on behind the scenes?
Let's look at an example from the fintech sector, based on a recent EY-Parthenon survey. These observations though could be applied to almost any major company looking to partner.
📈 The survey reveals an interesting trend: banks are planning to lean on fintech partnerships really hard.
Today 32% of them consider these alliances crucial to their strategy. Fast forward to 2025, and this number is predicted to climb to an impressive 55%.
Why exactly do they partner up?
95% - partner to enhance their digital products and reach
87% - to manage critical processes
86% - to cut costs and accelerate implementation times
Sounds great, right? Well, not so fast.
While partnerships offer many benefits, they need to be managed carefully.
40% believe partnership failure rates 20-40%
33% believe failure rates >40%
🚩 Partnerships naturally have a high failure rate, because joint go-to-market strategies may not work, pilots may be not scalable, etc. But what the survey reveals is:
78% of banks find it hard to create an internal framework for managing how they work and interact with partners.
75% struggle to grasp how a partnership can help them achieve their strategic and commercial goals
64% have trouble identifying and prioritizing who to partner with. From partner reputation to strength of their technology, and if they're on the same page with strategy and incentives.
53% find it difficult to onboard new partners, with old systems, paperwork, and insufficient support making the process last anywhere between 7 and 18 months.
💡 So what can we learn from it?
As partnerships become more important for large corporations, this trend opens a world of opportunities. But while there are companies that know how to partner well, the majority still struggle.
Many large companies that can open many doors for your scaleup, don’t have clear ways to partner, still lack internal KPIs, struggle with evaluating partners and still onboard them for 7-18 months.
Prepare and address these challenges upfront, and you'll be one step closer to a successful partnership.
Finally, consider advise from Andreessen Horowitz, prominent VC fund:
“only engage in a joint sales effort with a larger company if you believe that you’ve established *a scalable, repeatable sale independently* and if you have enough experience in the field to know that your product naturally aligns with your partner-to-be’s product.”