Without a doubt, 2020 has been a year of turmoil for Big Tech. But at the same time, it was one of the most lucrative years in terms of both product growth and an edging out of smaller competitor market shares. As the world watches a new round of regulation talks that are working to undermine Tech Giants’ monopolistic practices, an essential component of their triumph is being overlooked. The Synergy Approach. This is the perfect approach to maximize your startup’s strategy.
The textbook definition of synergies is “an interaction or cooperation giving rise to a whole that is greater than the simple sum of its parts.” Big Tech companies create synergies by co-offering their full ecosystem of products in combined bundles and add value to products much greater than their standalone competitors worth.
So for example, Microsoft allows you to use Teams to seamlessly collaborate on all of its office tools (more on that later), whereas Amazon complements Whole Foods, by offering a fast grocery delivery using its extensive e-commerce logistics network. Google integrates its Google Nest Home IoT products with its Google Assistant smart speakers, and so on. This list could go on forever, because the use of synergies is the key to how Big Tech dominates virtually any new vertical they enter, and is the main lacking point for smaller startup competitors that try to stay afloat.
However, it is incorrect to assume that the synergy effect is unreachable beyond the big tech world. Start-ups can participate in synergy creation and reap its benefits, too. Contrary to popular belief, early stage startups should not only focus on their core product and hold off business and corporate development for a later date. Instead, they must actively pursue synergistic partnerships at the earliest stage, and reap the benefits from a synergetic approach listed below:
Synergetic Partnerships that help expand your target user reach
When the product is co-selling with other Partners that don’t operate in an Identical industry, these types of partnerships introduce your product to previously untapped core users which have not yet come across your product.
For example: When Spotify partnered with Ticketmaster, Ticketmaster was able to generate over 40 million usd in ticket sales by offering tickets to concerts of played music titles.
Such partnerships allow more visibility to customers that have an inherent interest in using the product or service but are unable to get onboarded from a parallel industry.
By working with synergetic partners, you will quickly expand your product reach and capture your target customer market by filling all the intersections between you and other parallel product.
In the case of tickets purchases, many of the avid music listeners knew neither about upcoming concerts or where to purchase tickets of their favorite artists. However, through synergistic partnerships, Ticketmaster was able to convert the key Spotify music listeners that were unlikely to see the event listing by displaying tickets near the preforming artist’s song.
Synergetic partnerships that create new product value propositions -
While the ability to reach new key customers described above is a strong effect of the synergy approach, synergetic partnerships also have the capability to impact the fundamental value of the products themselves.
Synergetic partners can create a brand new value proposition for users, when their products are co-offered. Synergetic partnerships can either extend the value add to end users, or create a value proposition that brings a solution to a completely new problem.
For example:
An integration of Instacart on the Food Network Show creates a new user experience that elevates the cooking experience by delivering precise orders. This is a stark contrast to the previously harder cooking guide experience plagued by the inability to find precise ingredients. At the same time, the integration offers a gamified experience to the user base, training them to prefer grocery orders over prepared food delivery, since it is so easy to prepare groceries based on the quick preparation recipes.
Another great example of the value proposition improvements that the synergy effect brings to products is Microsoft Team’s success in integrating with the full Office suite of products.
Microsoft Teams was able to quickly grow into a large team communications player because Microsoft allowed Teams users to collaborate on all Office services, where users could share Excel, Word, and PowerPoint documents while e collaborating live on the files based on Teams projects and group participants.
This partnership has insured a direct usage of Teams for its main purpose of collaboration in Corporate, Education, and leisure settings.
Sales streams diversifications -
In more simplified ways, a synergetic partnership can also improve sales with a more diversified customer base. The synergetic approach helps you diversify sales channels, ensuring your startup is not susceptible to the sole demand and performance of a single industry.
Even in the case where it seems impossible to diversify, cross-industry synergies come to the rescue to lower single industry risk.
For example:
Covid19 has meant an almost inevitable reckoning of any industry operating in the mobility space due to strict restrictions and lockdowns. Services like Lyft were primed to the short end of the stick.
However by partnering with Grubhub in a synergetic food delivery industry, Lyft was able to diversify away from a drop-off in riders, instead cashing in on the need for large food delivery orders during a lockdown.
This is a prime example of avoiding structural industry risks by diversifying to new industries through partnerships that don’t include the hurdles of new in-house unit development.
Synergy partnerships offer new product marketing capability where partners can offer clearer combined product use cases in combined campaigns.
Synergistic partnerships can also include marketing collaborations, where co-marketing strategies aren’t simply ways to split marketing costs with non-competitor partners. Rather, partners can propose a new use case by combining two products.
For example:
A great example of this is the marketing and integration partnership between Zoom and Slack.
By marketing the usage of the two communication solutions together, as well as offering a seamless integration between the two, Zoom and Slack were able to offer a full remote customer journey, from chat to video communication. Users can set up Zoom calls via Slack, and join Zoom calls via a Slack channel link. By marketing and combining their solutions together, they have offered a product that can compete against Google’s GSuite or the above mentioned Microsoft Teams.
Tools for Synergy discovery:
In the end, Big Tech’s hidden competitive edge is easily replicable using the right tools. The synergy approach delivers instant results to its adopters; bringing in new core users, strengthening the product value proposition, diversifying products sales channels, and improving the effectiveness of combined advertisements.
Even though the success of a startup’s market share retention is already partly determined by their ability to fend off Big Tech competition, once peer startups utilize the same synergy approach in the near future, the use of synergies will make or break all industries and startups alike.
Perhaps this analysis leaves only a single question- of how to find synergistic partnerships in the global tech ecosystem, and best evaluate the synergetic potential of such collaborations.
Without the proper tools it can be hard for startups to position themselves as synergistic approach leaders, luckily a new Platform and tech stack are on the rise-
The Coopsight Open Platform is a free Open networking platform that uses proprietary AI algorithms to match users based on their shared synergies. The platform displays synergy scores to help evaluate partnership potential, and offers synergy keywords that offer recommendations into the process of synergetic partnership execution.
Coopsight will soon refer users to a tech stack of tools that help with Partnership execution. Tools to help Marketing campaigns, to Integration services, to support partner discounts setting, and beyond.
Sign-up to the free platform now and start matching to your new synergetic partners-
