The Top Ten Lies of Corporate Partners

In a manner of speaking, I’m running out of lies to tell. So far I’ve taken care of entrepreneurs, venture capitalists, engineers, and marketers. The target of this posting is “corporate partners.” (You might find a previous posting, “The Art of Partnering” interesting.)

These are the large, infinitely rich, and high brand-recognition companies that supposedly provide a partner with instant credibility, fundability, and viability. Unfortunately, dealing with a large company is like being “stuck in the belly of a snake”—as my buddy Heidi Mason describes corporate partnerships. She is the co-author of The Venture Imperative.

Before those jaws close around you, and you are eaten alive, listen for these lies.

1. “We want to do this for strategic reasons.” This is corporate-ese for, “I have no idea why we’re doing this. My CEO met your CEO at a boondoggle conference and told me to talk to you guys.”

   Ideally, what you’d hear instead is, “We think we’ll make a lot more money by partnering with you.” In other words, the large company wants to do this for tactical, not strategic, reasons. This would mean that the partnership has a chance of being “built to last.”

2. “Our management really wants to do this.” There are two ways you can take this. First, you have a great product, the large company “gets it,” and life could be great. Second, the large company is clueless and desperate. As a rule of thumb, if you’re not 110% sure it’s the former, then it’s the latter. Then you should be thinking, “Do we really want to get in bed with them?”

3. “We can move really fast.” This means that so far very few people in the organization have been exposed to the idea. As more people get involved and the turf wars begin, progress will slow down, if not reverse. It could also be that this isn’t a lie because “really fast” means nine to twelve months from the large company’s perspective.

4. “Our legal department won’t be a problem.” In other words, the legal department hasn’t seen the proposal yet. There are two kinds of legal departments in large companies: (a) the kind that automatically says, “No,” when asked, “Can we do this?” (b) and the kind that automatically says, “No,” when asked, “Can we do this?”

5. (a)“The engineering team really likes it.” (b)“The marketing team really likes it.” Respectively, these lies mean that (a) the marketing team hasn’t seen it yet; (b) the engineering team hasn’t seen it yet. Look at the bright side: once you get past marketing, engineering, and legal, only accounting is left.

6. “We want to time the announcement of our partnership with the release of a new version of our product.” This is a lie of good intentions. Unfortunately, it means that the gating item of your partnership is a large company’s ability to deliver a new product. May God be with you.

7. “Our primary concern is whether you guys can scale.” This isn’t a lie. They are really concerned about this--as they should be. After all, your team has never shipped a product before, and you only have six months of cash in the bank. You have may no choice but to lie too. :-)

8. “We’d like your servers to host most of the code and functionality.” This isn’t a lie, per se. It’s more a frightening admission that the large company’s product is held together by baling wire, duct tape, and chewing gum, so making any changes could make it blow up. Welcome to corporate partnering: one of the things that you’ll learn is that the emperor has no code.

9. “We’re forming a cross-functional team to ensure the success of this project.” This ensures that no one is responsible for the success of the partnership, nor is there anyone who’s going to take the blame. Instead, you want the large company to identify one “champion” for the partnership. One champion is always better than one cross-functional team.

10. “I’m leaving soon, but I’ve found a great person to take over my role in this project.” Uh oh, now your champion is splitting, and  the person who was arguing against the partnership is going to be in charge of implementing it. You’ve got some major evangelism and bridge repairing to do. May the farce be with you.

Comments

[Ohad]

Havin heard all of these statements many times before, I couldn't help but laugh at this witty summary of yours. Keep up the good work. I have subscribed to your rss feed and really liked the content.

[Brad Farris]

I used to evaluate partnerships for a $1B company. We used to say a lot of things that we hoped were true, but of course didn't deliver on (let's call them lies). There's one big one you missed.

The price of the deal, amount of investment, or contribution to a JV is always a lie the first time you hear it. We would start out high, hoping to lure you into the discussion with us. (You came to us because we have the money, right?)

The price then declines when one of two things happen, if you focus on this partnership and all the other opportunities lose interest (None of the others would pay our price), or if there's some bad news from your side (Product falls behind, new competition crops up, etc). One of the two always happened, and the price never stuck.

[Dotan Mazor]

Liked the remark about the Legal Department! This is so true, but as funny as it sounds, the job of the Legal Department is to say exactly this: "No, it can't be done. Well, at least not this way".

Haven't you seen projects running ahead and being funded, because they are very promising, but eventually prove to be basically illegal?

There is an old Jewish wise saying: "The end of the act is in the pre-thinking" (pronounced: sof ma'ase bemachshava thila). And this is the job of a GOOD Legal Department: to be involved in the PRE-thinking process.

dotan

[brajesh]

Hi Guy,
[Offtopic]
Lately your site is taking too much time to load completely, perhaps because of so many widgets on the sidebar. it would be great if you could streamline the sidebar a bit for fast loading

[BL]

Guy,

How about this one:

"As your strategic partner, we can help you to do your fundraising."

Best regards,
BL

[Smittie]

I have a strong suspicion that no one is going to rake you over the fires on this one, Guy. No one is going to stand up and say, 'hey, I don't like the way you're portraying corporations here."

Everyone knows corporations are lying, thieving, thugs without morals or character.

As always, loved the post. Thanks for putting in the effort and time.

"The Lies of..." is one of my favorite series. I hope you'll find other liars to expose.

Aloha,
Smittie

[Joey Berrios]

I work for a church as an outreach pastor. How can cooperate partnerships work for a non-profit organization? Thanks.

[Government IT News]

Some more lies:

-The shortest payment terms we can do is NET30 days. (You think: "how can this be when I just heard that they have billions in cash?" How about helping small businesses out?)

-The classic: The check is in the mail.

Keep up the great posts and books!

Marvin "eMarv" Corea

[Graydon]

Need more "Top Ten Lies of..." subjects?

- Vendors
- Bosses / Managers
- Staff / Subordinates
- "Headquarters"
- Your non-blogging spouse
- Bloggers to their...
- audience
- spouse
- self

I'm sure we can come up with more.

Of course, the last one's might be a bit difficult to make public.

[Renai LeMay]

hi Guy,

love your work man - great blog! I would be keen to see your thoughts on the top ten lies of journalists/the media/public relations professionals.

Cheers,

Renai