Partnerships as a market development strategy for startups

Partnerships are an important part of a startup’s market development strategy. The partnership helps to ensure that your company has a product that appeals to your target market. It also enables you to integrate your value chain to create a whole product solution.

Motives for creating partnerships

Creating partnerships as part of a market development strategy should be driven by two key motives:

  • Achieving market leadership by creating whole product solutions as quickly as possible
  • Achieving and sustaining market leadership by differentiating your product or service

Partnerships should be based almost exclusively on these criteria. The goal is to significantly increase your time-to-market advantage. However, the partnership process will change through the technology adoption lifecycle (TALC).

Partnering in the Early Market

In the Early Market, your first priority is to ensure that the customer is successful. This means enabling the customer to use your product to meet their specific requirements. Bring in partners according to their ability to add value to the product such that the product becomes useful for a specific application. Typical partners include systems integrators, who are capable of harnessing and customizing new technologies. This will lead to the creation of a new product value chain.

Your second priority is to seek validation. As a startup, you have little or no brand recognition, and low credibility. Bring in partners with established identities to achieve validation in the eyes of your customers. Recruiting an advisory board, that consists of experts and other interested parties, will provide you with legitimacy and strategic decision-making capabilities.

In the Early Market, look for partners with the following skill sets:

  • Advanced technology expertise
  • Systems integration capabilities
  • Business process and change management consulting skills
  • Project management expertise

Partnerships in the Chasm and Niche Markets

In Niche Markets, look for partners who can help you to develop the market and participate on a sustainable basis. The goal is to create whole product solutions for targeted niche segments. The right partner can help you to complete these whole product solutions by offering that which is missing.

Over the long term, your goal is to create a market ecosystem that will ensure the viability, competitiveness and durability of the value chain. Ask the following questions to help you select the right partners:

  • Who will I need to complete the product so that it is a working, repeatable solution that provides customers with a positive, measurable return on investment?
  • Who will I need to deliver a value-added solution into the target market segment? What specific knowledge of the target segment do I require, and who may possess this knowledge?
  • Who will I need to complement the whole product solution to create greater value for my chosen customer segments?
  • How does the partner benefit from participation in the value chain and target market? Can the partner create their own value chain and/or offer a complementary chain?


Wiefels, P. (2002). The Chasm Companion. New York: Harper Business.