Types of Partners - How to Build a Startup

Summary

The script discusses various business relationship models, highlighting 'Intel Inside' as a joint business development, 'Starbucks and Pepsi' and 'Apple and record labels' as strategic alliances, and 'Apple and Foxconn' as a potential joint venture. It also touches on coopetition during fashion week and standards groups, emphasizing the GE-French manufacturer partnership for the CFM-56 jet engine as a prime example. The summary concludes with traffic partners like KAYAK and Expedia, illustrating how they profit from airline industry clicks. These examples illustrate the dynamic nature of business relationships in building companies.

Takeaways

• 🤝 'Intel Inside®' is a prime example of joint business development, where Intel exchanged advertising for prominent placement on computer boxes, benefiting computer manufacturers with higher gross margins.
• 🥤 Starbucks® and Pepsi™'s strategic alliance to promote Frappuccino® demonstrates how two companies can collaborate to create a new market offering.
• 🎧 The partnership between Apple and record labels, and potentially with Foxconn, illustrates the power of strategic alliances and joint ventures in driving innovation and market presence.
• 👗 Fashion week is an instance of coopetition, where competitors temporarily collaborate for the benefit of the industry, showcasing the potential of cooperation in competitive environments.
• 📘 Standards groups represent a form of coopetition where competitors unite to establish industry standards, highlighting the importance of collaboration for mutual benefit.
• ✈️ The CFM-56 jet engine venture between GE and a French manufacturer is a renowned example of a joint venture, blending elements of coopetition to create a successful product.
• 🛫 The partnership in the aircraft industry shows that even unlikely partners can achieve great success when they collaborate, underlining the value of joint ventures.
• 🔍 Online scheduling sites like KAYAK, Expedia, and Hipmunk act as traffic partners for the airline industry, earning revenue through clicks and ticket purchases, illustrating a symbiotic business relationship.
• 💡 The transcript emphasizes the blurred lines between different types of business relationships, indicating that they can evolve and transform over time.
• 🛍️ The various examples provided show that collaboration, whether through alliances, joint ventures, or coopetition, is key to business growth and industry development.
• 🌐 The script highlights the importance of understanding different types of business relationships to effectively build and grow a company in a competitive landscape.

Q & A

What is an example of joint business development mentioned in the script?

Intel Inside® is an example of joint business development where Intel exchanged advertising dollars for a prominent position on computer manufacturer's boxes, allowing manufacturers to gain higher gross margins.

What is the strategic alliance mentioned between Starbucks® and Pepsi™ for promoting what product?

The strategic alliance between Starbucks® and Pepsi™ was to promote the Frappuccino®, demonstrating a collaborative effort between two major brands.

Can you provide an example of a strategic alliance in the music industry as mentioned in the script?

The script mentions a strategic alliance between Apple and record labels, which was instrumental in the creation and success of digital music distribution.

How does the script describe the relationship between Apple and Foxconn?

The script describes the relationship between Apple and Foxconn as an example of a supplier, and at times, it might also be considered a joint venture.

What is the term used in the script to describe a situation where competitors cooperate for a common industry event?

The term used in the script for competitors cooperating for a common industry event is 'coopetition', exemplified by high-end clothing manufacturers during Fashion Week.

What is an example of coopetition given in the script?

An example of coopetition in the script is Fashion Week, where high-end clothing manufacturers, who usually compete, come together to cooperate for the benefit of the industry.

What role do standards groups play according to the script?

According to the script, standards groups are where competitors put aside their differences and work together towards a common goal of creating mutually agreed standards.

What is the most famous aircraft partnership mentioned in the script and what was its purpose?

The most famous aircraft partnership mentioned is between GE and a French aircraft manufacturer, which came together in a joint venture to develop the CFM-56 jet engine, a popular turbofan.

What is the role of traffic partners in the airline industry as described in the script?

Traffic partners, such as KAYAK, Expedia, and Hipmunk, serve the airline industry by directing online traffic to their sites. They make money by receiving payments from airlines every time a user clicks through to buy a ticket.

How do traffic partners generate revenue according to the script?

Traffic partners generate revenue by earning money from airlines each time a user clicks through their site to purchase a ticket.

What is the overarching theme of the script regarding business relationships?

The overarching theme of the script is that businesses can form various types of relationships, such as joint ventures, strategic alliances, and coopetition, to work together and build their companies.

Outlines

00:00

🤝 Business Development and Strategic Alliances

This paragraph discusses various forms of business relationships that foster growth and development. It starts with Intel Inside® as an example of joint business development, where Intel exchanged advertising for prominent placement on computer boxes, benefiting computer manufacturers with higher gross margins. The script then moves on to strategic alliances, such as Starbucks® and Pepsi™ promoting Frappuccino®, and Apple's partnerships with record labels and Foxconn, which sometimes resemble joint ventures. The concept of coopetition is introduced with Fashion Week as an example, where competitors cooperate annually for the industry's benefit. Standards groups are highlighted as another form of cooperation among competitors. The script wraps up with the famous GE and French aircraft manufacturer joint venture for the CFM-56 jet engine, showcasing an unlikely yet successful partnership. Lastly, the concept of traffic partners is explained using online travel sites that generate revenue through airline industry partnerships.

Keywords

💡Intel Inside®

Intel Inside® is a marketing campaign by Intel, a leading manufacturer of computer processors. It signifies that the computer contains an Intel processor. In the context of the video, it exemplifies joint business development where Intel exchanged advertising for a prominent placement on computer boxes, helping computer manufacturers gain higher gross margins in a typically low-margin industry.

💡Strategic Alliance

A strategic alliance is a cooperative agreement between two businesses to achieve common goals. The video mentions two examples: Starbucks® and Pepsi™ promoting Frappuccino®, and Apple's alliance with record labels. These alliances are beneficial as they allow companies to leverage each other's strengths to achieve mutual benefits, which is a central theme in the video.

💡Supplier

In the context of the video, a supplier is a company that provides goods or services to another company. The script refers to Apple and Foxconn as an example of a supplier relationship, which may also have elements of a joint venture. This highlights the importance of supply chain management in building a company's success.

💡Joint Venture

A joint venture is a business arrangement where two or more parties agree to pool their resources for a specific project, sharing profits, costs, and risks. The video cites the partnership between GE and a French aircraft manufacturer for the CFM-56 jet engine as a prime example of a successful joint venture, demonstrating how collaboration can lead to significant advancements in technology and market success.

💡Coopetition

Coopetition is a term that blends 'cooperation' and 'competition', describing a situation where companies that are typically competitors choose to cooperate for mutual benefit. The video uses Fashion Week as an example, where high-end clothing manufacturers, who usually compete, come together once a year to cooperate for the benefit of the industry.

💡Standards Groups

Standards groups are organizations that bring together competitors to develop and agree on industry standards. The video mentions that these groups help set mutually agreed standards, which is crucial for interoperability and industry-wide adoption of technologies or practices.

💡GE

General Electric (GE) is a multinational conglomerate involved in various industries, including aviation. In the script, GE is highlighted for its joint venture with a French aircraft manufacturer to create the CFM-56 jet engine, illustrating how even large corporations can collaborate effectively.

💡Turbofans

Turbofans are a type of jet engine commonly used in commercial aviation. The video specifically mentions the CFM-56 as one of the most popular turbofans, indicating the significance of this technology in the aviation industry and the success of the joint venture between GE and the French manufacturer.

💡Traffic Partners

Traffic partners are businesses that generate revenue by directing traffic to another company. The video describes online scheduling sites like KAYAK, Expedia, and Hipmunk as traffic partners for the airline industry, earning money each time a user clicks through to purchase a ticket.

💡Online Scheduling Sites

Online scheduling sites are platforms that allow users to compare and book various services, such as flights or hotels. The video uses these sites as examples of traffic partners, emphasizing their role in generating revenue for the airline industry by facilitating ticket purchases.

💡Gross Margin

Gross margin is a financial metric that represents the difference between revenue and cost of goods sold, expressed as a percentage of revenue. The video explains how computer manufacturers benefited from the Intel Inside® campaign by achieving higher gross margins in an otherwise low-margin business.

Highlights

Intel Inside® is an example of joint business development through advertising and branding on computer manufacturer's boxes.

Computer manufacturers benefited from increased gross margin through the Intel Inside® partnership.

Starbucks® and Pepsi™'s strategic alliance promoted the Frappuccino® brand.

Apple's strategic alliance with record labels revolutionized the music industry.

Apple and Foxconn's partnership can be seen as a supplier relationship and potentially a joint venture.

Fashion week exemplifies coopetition among high-end clothing manufacturers.

Competitors collaborate during fashion week to grade the industry.

Standards groups demonstrate competitors working together for mutually agreed standards.

GE and a French aircraft manufacturer partnered in a joint venture for the CFM-56 jet engine.

The CFM-56 jet engine is a popular turbofan resulting from a joint venture.

Coopetition is also present in the joint venture between GE and the French aircraft manufacturer.

Online scheduling sites like KAYAK, Expedia, and Hipmunk are traffic partners for the airline industry.

Traffic partners earn revenue through clicks leading to airline ticket purchases.

Different types of business relationships can blur and evolve over time.

Coopetition may transition into a strategic alliance or a joint venture.

The ultimate goal of business relationships is to work together to build the company.

Transcripts

So, Intel Inside® was a great example of joint business development.

They managed to exchange advertising dollars

for a prominent position on the outside of computer manufacturer's boxes.

What computer manufacturers got in exchange

was gross margin that they never would have gotten in a low-margin business.

Starbucks® and Pepsi™ to promote Frappuccino®

was a great example of a strategic alliance.

Apple and the record labels was another example

of a great strategic alliance, but Apple and Foxconn is a great example

of a supplier and might, at times, actually be a good example

of a joint venture as well.

Fashion week, well that's an example of coopetition.

Normally, at other times of the year, these high-end clothing manufacturers

compete with each other vociferously,

but once a year they get together and cooperate in grading the industry.

Standards groups are another example where competitors get together,

put aside their differences, and work together towards a common goal

of trying to come up with a set of mutually agreed standards.

Kind of the ringer in here, that is the one that I didn't describe,

but all you had to do was go on Google,

is the most famous aircraft partnership ever made

where 2 of the most unlikely partners, GE and a French aircraft manufacturer,

came together to do a joint venture for the CFM-56 jet engine,

which is one of the most popular turbofans in the world,

so that was a great example of a joint venture

and also had a bit of coopetition in it as well.

Finally, for traffic partners.

If you think about all the online scheduling sites, KAYAK, Expedia, Hipmunk,

they're all traffic partners for the airline industry.

In fact, that's how they make their money.

While you're having a great time figuring out multiple airline schedules,

every time you click through to by a ticket,

they are getting paid by the airlines, and that's how they make their money.

So, I hope these were good examples to help you understand

the different types of relationships.

As I said, sometimes they kind of blur between each other.

Sometimes it might start with coopetition and turn into a strategic alliance

and someday might actually be a joint venture,

but the whole idea is that you're working together with others

to help build your company.