Art of the Pitch - Article Series
The Art of the Pitch, a series of articles aimed at entrepreneurs that take actual business cases to show entrepreneurs best tactics and strategies for selling one’s business plan, ideas, etc.
When Multiplied Media Corp. decided to marry its Poynt search technology with the marketing muscle of Ping Mobile, it did not rush in with a proposal.
As with all of Multiplied Media’s strategic business partners – including Research in Motion, Microsoft and Yellow Pages Group – there was a long and careful courtship, said CEO Andrew Osis, who founded the Calgary-based technology firm 8 years ago.
Well versed in the art of the pitch, Mr. Osis and his staff of 40 people carried out exhaustive research on Ping Mobile before arranging for an introduction to promote the mutual benefits of forming a business alliance. Ping, based in Englewood Cliffs, N.J., conducts advertising campaigns on handheld mobile devices. It also has offices in Los Angeles, Atlanta and Tel Aviv, and it has run promotions for Warner Bros., Ford Motor Co., Days Inn, Disney’s Soap Channel, KFC, Arby’s, Pizza Hut and Hawaiian Airlines, among others.
(Poynt is a local search application – available as a free download for iPhones, BlackBerrys and other mobile devices – that connects mobile users to movie theatres, restaurants and businesses in any of the 7 countries where Multiplied Media has a presence. Users can also book reservations.)
“So we went to Ping and said ‘Look, we have millions of users in the U.S. – we’re up to 4 million users worldwide, and probably 75% of them are in the U.S.”
Multiplied Media could provide Ping with greater access to consumers, Mr. Osis explained in an interview. In turn, he asked whether Ping could give his firm greater access to advertisers.
“And they said ‘absolutely.’ They had been in a very narrow piece of the marketing space, just marketing through text messages – and having good success at that – but they wanted to expand their access to mobile devices, so they saw this partnership as compelling.”
This past summer, the two partnered in a U.S. campaign on behalf of Days Inn hotels, with Poynt conveying a promotional offer to mobile users seeking information on hotels. There are other campaigns in the works, said Mr. Osis, adding he never approaches a prospective partner until he is in a position to “really build out the business case first.”
This is especially important to small and medium-sized enterprises seeking business ventures with big players, said Richard Monk, past chairman of Certified Management Accountants Canada and CEO of Ottawa-based management consulting firm M Sight Global Inc.
“A big company can tell right away whether or not they want to deal with you,” Mr. Monk said, cautioning that even when a much bigger player wants to make a deal, the smaller partner should not be dazzled to the point that it forgets to protect its interests.
“The big company will sometimes say, ‘Well, we’ll draft up this agreement, just sign here.’ You should always take it to your lawyer and say ‘please take a look at this.’ There may be something in there that you are signing that you shouldn’t be,” Mr. Monk said.
It is particularly important to get legal advice on how to retain ownership of intellectual property. “There are ways you can do that, but all of that has to be laid out in the beginning.”
Mr. Osis said Multiplied Media has formed strategic alliances with upwards of 30 different business partners, but it has always resisted any pressure to relinquish ownership of its technology and intellectual property. In this respect, he is following the lead of Bill Gates, who famously refused to hand over his software to IBM when Microsoft was just a tiny startup. It’s the reason Mr. Gates is a billionaire today.
“There are lots of lessons learned,” Mr. Osis said. “In the early days, you really have to have the courageof your own conviction that what you are delivering creates value for your partner, but you are retaining that value for yourself [as well].”
Once those concerns have been satisfied, partnering with a well-established brand in the marketplace offers obvious advantages and business growth opportunities, said Merril Mascarenhas, managing partner of Toronto-based Arcus Consulting Group. “[Your] brand is so important today. A partnership can increase the credibility of one brand being associated with another brand.”
This has certainly been the case with Multiplied Media, said Mr. Osis, who introduced the first version of Poynt by e-mailing the application to 100 people and asking them to try it out. “It’s one of those 8-year overnight success stories, right? It was in 2008 when we launched the BlackBerry version of Poynt, so it’s been a long haul.”
Now, those established business relationships are a key selling point in Multiplied Media’s expansion plans.
“We present to our potential partners and show them the case studies of the other places where we have had success and, generally speaking, that’s the sales pitch. Nothing speaks better than credibility and performance in other markets.”
The Partner Process
The positives
Endless possibilities: “It’s almost like turbo charging your business,” says Merril Mascarenhas, managing partner of Arcus Consulting Group. In a recent survey, 2,100 senior executives interviewed cited “considerable benefits to partnerships: New insights and perspectives; cost reduction and increased resource base; increased credibility, spreading of risk, better delivery of outputs, increased visibility among clients.”
Greater market penetration: “You are seeing more of these marketing partnerships popping up now,” says Ottawa-based management consultant Richard Monk, past chairman of Certified Management Accountants Canada. “If you can leverage another company’s distribution channel, that can be a great advantage.”
Global reach: “Certainly for Canadian SMEs that are considering going global, it would be very important to have a strategic partner in a global setting,” Mr. Monk said. “Anybody dealing with trading in India or China, for example, would do well to have somebody on the ground or someone who is very familiar with the way business is done.”
Potential pitfalls
Loss of control: “Sometimes a [prospective] partner will come in and say, ‘Yup, you’ve done these great things and that’s nice. But look, we’re the big man on campus in our marketplace, you’ve got to do it our way,’” said Multiplied Media Corp. CEO Andrew Osis, who advises other entrepreneurs to weigh how much they are prepared to give up in exchange for such a partnership.
Loose financial controls: The parties must be in sync when it comes to accounting practices – “how regularly should we report, what’s coming in, what’s going out, what do we owe, what’s due to us?” said Mr. Monk.
Clash of values: “There will be times when you are tugged a certain way to do certain things, and if your value systems aren’t consistent with the other members of the partnership, that can create problems as well,” Mr. Monk said. “Some people are very straightforward and out in the open and want to do things the right way, and other people want to take shortcuts.”
Reprinted from the Globe and Mail with permission.