How Business Partnerships Have Been Key To Silicon Valley’s Growth, Explains Bharat Nagda

Silicon Valley behemoths have conquered the world. There is no place in the world you can go without using or coming across the technologies created by the large technology companies which have a significant base in the Silicon Valley - the most popular of them known together as FAANG - Facebook, Apple, Amazon, Netflix, Google, and more. Of course, they created products that were far superior than what existed at the time but they’ve harnessed the power of business partnerships to grow faster than anyone. Bharat Nagda, a Silicon Valley based expert in business strategy and partnerships, explained that the secret sauce to these companies’ hockey stick growth and success has been their ability to rapidly build strategic business partnerships, to gain a strategic advantage. 

“A deliberate approach to partnerships that stems from a deep understanding of one’s core competencies and where to find complementary expertise from partnerships will pull forward a company’s growth by many many years. While it's certainly faster to implement these partnerships in the technology industry, the principles can be applied to any and all companies” explained Bharat. Business partnerships are an increasingly standard tool that most technology businesses have leaned upon to quickly acquire key strategic capabilities that provide them an accelerated trajectory and we can see thousands of Partnerships professionals hired across these technology companies.

Bharat further expalined this using certain examples. A well known example is Apple’s partnership with Goldman Sachs to launch the very first Apple Credit Card in the US. While most users see and use the “Apple” Credit Card, very few of them are aware that Goldman Sachs is powering the financial technology behind Apple’s credit card experience. Closer to home, we also see a few examples of successes through partnerships, not just in the technology space but beyond. Starbucks, the popular US based coffee brand, entered a partnership with Tata Consumer Products, a major conglomerate to enter the Indian market in 2011. While Starbucks had previously tried to enter the Indian market in 2007, it had struggled navigating the complex regulatory and consumer environment, ultimately leading to a withdrawal. So, it combined its expertise in running a best-in-class coffee brand with Tata’s experience in operating in the Indian market and the regulatory environment. Today, the partnership successfully runs 300+ stores across 20+ cities in India, something which would have taken Starbucks a lot more time to achieve.

“The acquisition focused Indian startup ecosystem should introspect deeply on alternative approaches that create a higher risk adjusted value. For example, should Byju’s have spent millions of dollars on acquiring Aakash Tutorials, or could it have created a higher return on investment from partnering with Aakash to distribute its Educational products through a revenue sharing model?” said Bharat. 

There is plenty of evidence from the tech and even non-tech companies on the value creation and acceleration potential of partnerships. However, the key question that startups need to ask themselve is -can the partnership strategy become a bigger and more ubiquitous tool in their growth journey.