Build To Buy

Written by: Sean Licata, Partner
Trivaris Ltd.
sean@trivaris.com

Many startups plan for world domination; Billion dollar revenue streams; IPOs; cities and towns named after the company; and a head office in tax-free Bermuda to enjoy it all. Many times, though, the goals are more modest; a successful company, whose next step growth requires partnership (or acquisition) with another corporation.

If you think that your small company might one day be acquired, your Marketing team is a critical resource in making it happen.

As part of a team that built and sold a company (post bubble), I can tell you that marketing your company is a vital component to a partnership or acquisition strategy. This article is the first in a three part series. It talks about building your companies reputation. Parts 2 and 3 will talk about getting the message right and dealing with prospective partners.

We all understand how Marketing helps you grow your business (revenue, product strategy, etc.,), but what is often overlooked is that you also need to Market your company to potential partners. In other words, if you think that your company should be acquired, make sure that you do two things:

Build a strong and valuable company, and
Make sure people know it.

Many teams don’t always appreciate this second goal. Companies focus their Marketing efforts in communicating to potential customers. If your goal is to organically grow a business, this is where you stop. If you want to be acquired, then you need to do more. Make sure potential partners know about you and that you are the best partner for them.

Most large companies have people whose job is to find and develop partnerships with synergistic companies. If nobody knows that you exist, it’s not likely that you’ll get calls. Your reputation is critical, and there are four groups of people who can help you develop it.

Industry Analysts
Industry analysts earn their living talking to people. If they know about your company, they might even talk about it. Find out what analysts the big guys trust. Large firms like IDC and Gartner are a good start, but often the small, boutique analysts are even better.

Now, I know what you are thinking, analysts are hideously expensive, and don’t know your business as well as you do. Why would you ever sign up for that root canal? Don’t worry, it won’t hurt a bit.

Make a list of analysts and call them all. You’ll find that they are happy to talk. An Analyst’s business requires that they stay current in the industry so they are always interested in hearing about revolutionary new companies. As a side benefit, you might even learn something. Most analysts are good, smart people, who may not know your business as well as you do, but probably have a very good perspective on the broad industry that you play in. They spend their time talking to the industry’s decision makers. Often it rubs off and they have many useful nuggets of information.

Trade Press
Many people read the trade magazines. If you can justify it, take out an ad. Even better, submit an article. The trade magazines are always looking for content. They are excited to receive submissions covering “revolutionary ideas” from “revolutionary new companies”. Submitting articles is a great way of building your company’s reputation. Too busy? You’re not a writer? Contract one. A technical writer for a medium sized article is generally not too expensive.

Trade Shows
Often trade shows are thought of as a way to speak to many prospective customers. I’ve been to many trade shows, and often good prospects are a scarce commodity. Despite this lack of customers, tradeshows are often useful. A good trade show is an industry gathering. It is generally filled with lots of prospective partners, analysts, and trade press that you need to seek out. Set up a small booth, sponsor a seminar, or give a talk on an interesting subject, you’ll be glad you did.

Public Relations Firms
The last option is a PR firm. They are expensive, often very expensive – this is for good reason. A PR firm understands all of what I have told you (and more). They have developed strong relationships with highly influential people, and can take you places where you may not be able to go. You can be your own PR firm, working your company’s image. Beware, its harder than it looks, get it wrong and it’s difficult to recover.

Remember, your company’s reputation is a critical asset. First impressions count. Take your time and get the message right. The potential returns (and risks) are high. Presenting your company to industry mavens is very different from presenting your product to a customer.

Next article we’ll talk about how to build your message. The final installment will cover discussions with prospective partners. Stay tuned.

I hope you find this article helpful. If you are planning a partnership with another company drop me a note, I’d love to help.

Sean Licata is a partner at Trivaris, a commercialization firm that invests in, and provides management support, for startup companies. Sean can be reached by e-mail sean@trivaris.com

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