Don’t Pick Unpopular Business Partners

Nina L. Kaufman, Esq.

Nina L. Kaufman, Esq.

Nina L. Kaufman, Esq., owner of Ask The Business Lawyer, is an award-winning business attorney, speaker, and Entrepreneur Magazine online contributor. She saves consulting and professional services companies time, money, and aggravation by serving as their outsourced legal counsel.

Posted on September 20, 2016 in Strategic Alliances

A lesson from Corporate America give us a slightly different take on popularity contests and alliance partners.

In writing about the legal brouhaha that frothed over Google’s purchase of YouTube, Yahoo! vet Tim Sanders points out an often-overlooked facet of choosing a business or strategic alliance partner:  what’s the downside?  Not just the downside internally, but also externally.  What is your partner’s reputation in the field?   Will the alliance give anyone pause for thought before doing business with you?

The way Tim looks at it,

You cannot buy or partner with companies that have enemies . . . if those enemies are important to your business model. No matter how much the media likes your potential partner, and how many teenagers are addicted to it, you won’t make enough money to compensate for a crack in your business model.

 In short, it might make good dollars-and-cents/sense today, but what about tomorrow?  Six months from now?  One year down the road?  Is there any danger of being tainted by their reputation (which can last longer than the partnership itself)?

 

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