4. Partnerships and Operations
Next Week
This Week
Next Week
Who are the key partners and suppliers
needed to make the business model work?
5. BIG IDEA:
Keep things in perspective
Big Corporate
Partner
You
(Tiny Startup)
Understanding each entity’s point of view
is key to your mutual success
6. Why Corporations Partner
Access to
Technology
Branding &
Marketing
Favorable
Economics
Novel, disruptive, and/
or consumer-facing
technologies
Leverage partners’
brand (mostly larger
companies, but
startups too)
Alignment of
corporate financial
interests
!
Potential acquisition
opportunities
!
Customer demand
!
Share in marketing
costs (usually if really
high)
!
External dev costs <
internal dev costs
7. Why Startups Partner
Access to Data
Funding & Resources
Payers & claims data; labs &
diagnostic data; manufacturers
& device data, etc.
Clinical trials partners,
development funds, intellectual
capital, research capacity, etc.
Access to Customers
More Efficient Use of Capital
Faster sales growth, new
markets, better customer
knowledge, etc.
Broader product offering,
focused development and
execution, economies of scale
Other reasons: shared economics, marketing/brand, lower
friction/better fit with existing user behavior
9. Strategic Alliances
Round out the “Whole
Product”
Access Mainstream
Customers
MVP
Generic
Expected
Additional functionality, shared
U/X or data (EMRs), installation,
tech support, peripherals, etc.
Leverage existing channels,
expand into new regions/
globally
10. BIG IDEA:
Partnership Timing
New Market
Existing Markets
Hold off...
Partner!
It’s often suboptimal to partner early in new markets because
innovators and early adopters are already enthusiastic!
11. Joint New BD Efforts
Co-Marketing
At-Risk Organizations
Co-Marketing
Self-Insured Employers
These hypothetical examples illustrate
potential joint efforts; expect to see more of
the former in coming years
13. Key Supplier Relationships
Direct Suppliers
Outsourcing
Suppliers of data,
enabling devices, etc.
Clinical trials partners,
telemedicine providers,
HIPAA compliance,
service APIs, etc.
15. BIG IDEA:
Find the “Right” Partner
Bestows Unfair
Advantages
Good Synergy /
Potential Acquirer
Supports Your
Independence
Unique Data Access
Same Customers
!
!
Unique Distribution
Channel
Synergistic -ORHighly Disruptive
Products
Avoid “Most Favored
Nation” clauses
!
Unique Product
Partnership
!
Few Exclusivity
Demands
!
!
Growth Market
Sales (pre-purchase)
agreements > equity
investments
16. Key Partnership Risks
Impedance Mismatch
Customer Relationship
Weak startup leverage,
misaligned corporate
incentives, different timelines
Who owns the customer?
Acquisition & retention
attribution
Development Challenges
Stakeholder Issues
Active vs. passive partners?
Leading dev on some aspects
but not others, etc.
Different underlying objectives
(personal vs. mutual success),
churn in stakeholders
Other risks: IP issues (China, etc.), difficulty unwinding
partner relationships
17. For Next Week
We Need,
They Need,
The Cost...
We
Need
Partner A
Partner B
…
They
Need
The
Cost
Partner
Relationships and
Dollar Flows
Partners’
Pros & Cons
(from their POV)
Pros
Cons
18. Partners
Lean Launchpad: Digital Health
UCSF Entrepreneurship Center
November 5, 2013
Abhas Gupta, MD
Mohr Davidow Ventures
@abhasguptamd
