Searching for partners

The internet has opened many doors, but when it comes to searching for new opportunities, it may have opened one door too many.

Information is flowing at unprecedented speed in every direction. That means that as soon as a market opening is found, dozens of contenders flock there. If you need proof, check out what's happening in the wireless arena these days.

In the past, you needed money to invade new markets - often leveraging profitable product lines or service offerings until the new markets took root. That's what made companies like Microsoft and IBM the powerhouses they are today, and it's what undid companies like Borland, Netscape and Mips. It's also what built the Big Five consultancies, and it's what's been eating away at the Web integrators in recent months.

E-business has thrown a curve into this whole equation. Now, virtually anyone with a piece of a solution can cobble together a string of partnerships that brings best-of-breed offerings to the market. And they often can do it less expensively because they don't have the overhead or the legacy products they need to maintain.

But before you jump on this bandwagon, you need to perform your own due diligence. First of all, you need to make sure the management is in place to make these partnerships work. That's where the large, established players really shine, and it's been the undoing of an army of dot-coms.

Second, you need to make sure there's a strong marketing component with experienced hands at the helm. This is where companies like Qwest and a-Services are showing their true colors, while rivals are fading into the electronic landscape. Hitching your partnerships to a big-name player with serious marketing clout isn't a bad strategy. It also tends to add credibility to any new offerings.

Third, you need to make sure your partners are solvent (or have strong backing from the VC community), will perform effectively, and can meet any demand that arises. Your reputation is riding on how well they perform, so make sure your lines of communication are firmly open and well-maintained.

And, finally, make sure the market is there before you jump into it. You can shoot from the hip and get it right or do plenty of market research and get it wrong. But you can learn a lot simply by going out and talking to potential customers about their problems, where they're going and what kind of solutions they'd be willing to invest in.

Indeed, the Internet has opened many doors, but they all can slam shut at the speed of light.

ed_sperling@ziffdavis.com