In tech? Keep your friends close and your enemies closer

If you’re one of the 140,000 startups trying to grow a sustainable business based on a digital product, it’s time to rethink what it means to win.

If you’re lucky, you might produce that killer app that disrupts an entire industry, a Facebook or a Dropbox.

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The more likely case is that you’ll lead your particular category, the way Asana leads free project management, or the way MapMyRun is the consumer go-to for tracking jogs. The infamous saying definitely applies to the tech industry: “Keep your friends close and your enemies closer.”

Why? Because the best thing an emerging company can do is partner with a current market leader.

Even if your product could potentially disrupt a partner’s industry, chances are that they have the money, resources, brand association and access to markets that you need — and you have an innovative value-add that will help them better serve their own markets.

Indeed, with the experience web and Internet of Things on the brink of redefining how products and brands will interact with one another, becoming a category leader across platforms, while maintaining brand recognition, is an absolute imperative.

Integrate and thrive

“In a world with little maintenance friction and pay-as-you-go business models, we enter the age of the disposable application,” Christian Gheorghe, founder and CEO of Tidemark, once wrote. The estimated 1.14 million zombie apps in the Apple Store bear him out.

Apps are proliferating because the barriers to entry for the average startup is at an unprecedented low. A good idea and a good developer will at least get you into the app store, where you may or may not survive.

The challenge becomes sustaining success.

An innovative new standalone widget might get you funded or acquired, for a Snapchat-like amount if you’re lucky, but it won’t set you up for the long term. A partner ecosystem will.

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It bears repeating that startups have a survival rate as low as 10 percent, and it takes about 16 years to become a stable, sustainable company. “Companies typically die around 20 months after their last financing round and after having raised $1.3 million,” according to CBInsights’ R.I.P. Report.

So, what should you do to align with strategic partners?

• Coopetition should be a key part of your growth strategy. LinkedIn grew into the go-to recruiting site that it is today in part because it co-opted its human rivals, namely headhunters. LinkedIn became the best place for headhunters to research new recruits; as a result, many headhunters came to depend on it to do their job. Amazon Web Services quietly became such a dominant cloud source that even Apple stores iCloud data on it.
• Become a dependable partner. Your icon should be as familiar to your specific audience as Dropbox’s tiny black box is to the average consumer. You only get there by associating yourself with best-of-breed platforms, even if your competition is in the same place.
• Share the wealth. Some apps will disrupt their respective universes. More, however, will win by effectively integrating and become the go-to in their category. If your product can add value across tools or help them integrate, it will succeed.

In today’s integrated ecosystem, where big platforms reign supreme and startups must populate them with innovative products, it’s worth asking yourself: How well does my company work with others?

Marius Moscovici is the founder and chief executive of San Francisco-based business-intelligence startup Metric Insights.

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