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December 2011

More Reasons to Take the Risk of Dancing with an Elephant

Before digging into more benefits of dancing with an elephant, I want to point out platforms are not just software and hardware – they are organizational and social structures too.  For example, one of Autodesk’s pillars is our sales channel – a network of 1900+ Value Added Resellers that sell, support and add value to Autodesk products (and now web services).  Take a look at Apple.  Is there platform a hardware and OS – iPhone/iPad and iOS – or is it their App Store?  Is Google’s platform Search – or their Words advertising process?   When considering dancing with an elephant, do get beyond the technology to business systems and processes that are also platforms a small company can leverage.  Is Facebook’s success – and value to members of its ecosystem – its technology or the network of hundreds of millions of people (is it billions now?) they connect?  Is partnering with Apple about technology of their sales platform the App Store?  Is partnering with Facebook about their website or about social connections?  If you happen to be an Autodesk partner are you just thinking about leveraging technology to boot strap your new business?  What about leveraging Autodesk Value Added Reseller (longer story at a later date on when and how to leverage Autodesk Value Added Resellers) or the thousands of Autodesk Training Centers you can find in every corner of the world?  I personally know several people that made enough money partnering with Autodesk – through IPO, acquisition or just plain cash flow - to retire young (though most haven’t retired young as they cannot stop themselves from pursuit of building another successful business).  These days the media is full of similar stories in other industries – folks like Zynga going public on the back of Facebook’s social platform and PayPal’s birth on the back of EBay’s auction platform.

A new key point you will likely hear me talk about repeatedly in the future is taking just a wee bit of time to research and understand the “Why Dance with an Elephant” from the elephant’s perspective.  Not understanding what the elephant expects to get from the partnership is tantamount to getting married based on a review of your future spouse’s finances without ever meeting them.  Too likely to lead to surprises – some good but some not so good.  Working through the benefits of partnering from the elephant’s perspective will take several blog posting over several weeks – but to read the last page of the book first – product and customer extensions (increasing platform value with existing customers and extending sales to to new customers and markets), innovation and people.  Of course knowing where the elephant’s next step is likely to be – and knowing the risks and rewards of letting the elephant lead you in the dance versus you trying to lead the elephant – is important to a long and financially rewarding partnership with the elephant.  More on that later.  Next posting will be a bit more on “Why Dance with an Elephant”.      

Preface and Disclosure

The purpose of this blog is to de-mystify the purpose, value, process and most importantly business growth opportunities created by partnerships between large companies (“elephants”) and small companies.  Having spent over twenty years developing these ostensibly “asymmetrical” relationships at Autodesk, seeing numerous successes and failures of partnerships, and being a student of scholarly research on platform, ecosystem development and innovation,  there are some facts and predictability amid what can at times look like a lot of noise and unpredictability.

I am a bit nervous of being a bit pretentious and over reaching with this blog knowing partnering can be tricky subject to handle especially when it’s also what one does for a living day in and day out (paying the monthly home mortgage and tuitions for my two sons in University), my grades in English and especially grammar were never very good, and knowing I need to make at least two quality postings each week to keep you the reader engaged (do I have the discipline?... time will tell).

I do have a bit of a plan for at least the first few months of this blog starting with what I expect to be a relatively brief investigation into “Why Partner” (both from the perspective of the platform provider and a small company) and then moving on to lengthy and never ending “How to Partner” (again from both sides).  I hope to get some help from you the reader in both these areas of Why and How as answering your queries is always much more fun and stimulating for me then my just “orating”.  I also expect - and encourage - you the reader to help keep me honest differentiating facts from supposition and downright guesstimates.  When it comes to partnering, there is a lot of gray area between the black and white of facts.

Last, I may occasionally need to sidestep some questions that conflict with my position and responsibilities at Autodesk though I expect these times to be infrequent.

So enough preface, let’s start this first blog posting with just one of several reasons to “Dance with an Elephant”.

The first reason to dance, the first reason most folks will start with, is the elephant provides some base technology that is expensive for a small company to develop and that customers “take for granted” (are not willing to pay much if anything for).  At Autodesk, the platforms we deliver are horizontal and industry flavored drafting and modeling technologies – AutoCAD, Revit, Inventor, Maya and so on.  Microsoft provides their Windows OS and Xbox.  Google delivers Search and Chrome as platforms.  How about Adobe’s PDF file format and viewers?  There are Open Source platforms like Linux and Apache.  And there are non-technology platforms too – like the electrical plug standard that is regional in nature and services like mail delivery.  Note how platforms can be proprietary (directed by a single company), consortium led (like html) and even government mandated. Without Platforms, life would be both much more expensive and chaotic, and the cost of starting a new business would be out of the reach of individuals and all but the most well-funded start-ups.  If you are a start-up and an individual thinking about starting a company in partnership with an elephant, think through in an objective a manner as you can what the platform value you want/expect from the elephant and what capabilities your target customers take for granted and will resist paying for.

Elephant created platforms that give you the small business owner (or just an individual) the opportunity to boot strap your way to building a business (or a career) that allows you to make a much bigger impact on the world (and in some cases make a lot of money).

Stay tuned as this blog explores in more detail why and how you can leverage an elephant to launch and grow your business at a lower investment and lower risk (financial and personal).