How to Seek Help and Find Key Partners: Crash Course Entrepreneurship #9

CrashCourse
9 Oct 201911:15
EducationalLearning
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TLDRThe video explains that entrepreneurs should look for key partners to outsource part of their work to, which reduces costs and risks while providing needed expertise or resources. It recommends looking for suppliers for raw materials or supplemental products, manufacturers for product creation, distributors to get products to customers, marketers to build branding, legal services to ensure compliance, and consultants to provide assistance. By strategically partnering, entrepreneurs can play to their strengths while getting help with other key activities, resulting in greater business success and sustainability.

Takeaways
  • 😀 Entrepreneurs often try to do everything themselves at first, but recognizing where you need help and finding partners is key.
  • 👥 Key partners are independent contractors or companies that help with key activities, not employees.
  • 💰 Partnerships can help reduce costs through economies of scale and bulk purchasing.
  • ⚖️ Partnerships can reduce risk by providing knowledge, skills, or assets the entrepreneur lacks.
  • 🔌 Suppliers provide ingredients, materials, or supplemental products needed to create a product.
  • 🏭 Manufacturers have equipment and expertise to efficiently make products.
  • 🚚 Distributors get products to customers through existing distribution channels.
  • 🎨 Marketing partners help with branding, advertising, and cultivating customer relationships.
  • ⚖️ Legal partners ensure compliance with regulations and help with contracts and paperwork.
  • 😊 Successful partnerships benefit both parties and are sustainable over the long term.
Q & A

  • What are some reasons an entrepreneur might partner with other businesses?

    -An entrepreneur might partner with other businesses to lower costs through economies of scale, reduce risks, access knowledge or resources they lack, reach new customers, get help with specialized tasks like legal services or manufacturing, etc.

  • What is a key difference between employees and key partners?

    -Key partners are not employees - they are outside businesses or individuals an entrepreneur contracts with. This gives flexibility without long-term commitments.

  • What is Nestlé’s motivation for partnering with Starbucks?

    -Nestlé admitted they were late to the coffee game, so partnering with Starbucks allowed them to catch up and acquire a powerful brand-name coffee product to sell.

  • What three questions can entrepreneurs ask when picking key partners?

    -1) What key activities are we good at? 2) Who supplies our key resources? 3) Is the partnership sustainable and helpful to both parties?

  • What types of key partners might a product business look for?

    -A product business might partner with suppliers for ingredients/materials, manufacturers to make the product, distributors to get the product to customers, marketers to promote the product, legal services for contracts and regulations, etc.

  • Why does the example entrepreneur Pao decide to use partners instead of hiring employees?

    -Hiring employees requires long-term commitments Pao isn't ready for yet. Using partners gives flexibility to focus on chocolate-making while getting expert help with other key activities.

  • What is achieved through economies of scale?

    -As a business grows, it can order more materials in bulk which lowers the cost per item produced - this is economies of scale.

  • What does a distribution partner do?

    -A distribution partner helps get a product into the world by handling logistics of storage, shipping, connections with retailers, etc. This helps reach wider audiences.

  • What legal services might an entrepreneur need?

    -Legal services help entrepreneurs ensure they abide by laws and regulations. They also help with contracts, policies, patents, trademarks, investor deals, etc.

  • What’s an example of a complementary business to partner with?

    -A business selling something different but to the same customer base would be complementary to partner with for special campaigns benefiting both businesses.

Outlines
00:00
🤯 I can't do everything myself!

The first paragraph discusses the speaker's tendency to try to take on too many tasks herself, including editing videos, writing songs, screen printing t-shirts, updating budgets, designing album covers, etc. She realizes entrepreneur's can't be experts at everything and may need help or software to get some jobs done.

05:01
💡 Partners provide key resources

The second paragraph explains that key partners are not employees but outside contractors that can provide key activities or resources a business needs. Reasons to partner include lowering costs through economies of scale, reducing risks, gaining knowledge/licenses/customers, and more. Starbucks partnered with Nestlé to sell coffee in China.

10:01
🤝 Types of key partners

The third paragraph outlines types of partners including: suppliers for ingredients/materials or supplemental products; manufacturers to create products; distributors to transport products; marketing consultants; legal services; and complementary businesses for cross-promotion.

🍫 Case study: Paola's chocolate business

A hypothetical example is provided of Paola in Ecuador wanting to start a chocolate business. Her key activities require more resources than she has, so she decides to focus on making chocolate and find partners to provide supplies, distribution, marketing, legal services, etc.

Mindmap
Keywords
💡Entrepreneurship
Entrepreneurship refers to the process of designing, launching, and running a new business. It is a central theme in the video, which aims to provide advice and strategies for entrepreneurs. The video discusses key activities like product creation, branding, distribution, and partnerships that entrepreneurs need to implement.
💡Key activities
Key activities refer to the most important things a company must do to make its business model work. Identifying key activities allows entrepreneurs to understand where they need help and who potential partners could be. For example, key activities for a chocolate business would be sourcing ingredients, making chocolates, packaging, marketing, etc.
💡Key partners
Key partners refer to outside individuals or companies that help a business perform key activities or provide key resources. They are not employees. The video outlines reasons and strategies for collaborating with manufacturers, lawyers, suppliers, marketers and other key partners.
💡Risk reduction
Forming partnerships can help reduce the risk of failure for startups and entrepreneurs. For example, an entrepreneur with no experience getting products into stores could partner with an experienced distributor to reduce the risk of that key activity.
💡Economies of scale
As a business grows and production increases, costs go down per unit produced due to bulk purchasing of inputs and streamlining processes. This is called economies of scale. Key supplier partnerships can provide discounts and help new entrepreneurs achieve economies of scale.
💡Knowledge
A common reason for partnerships is gaining access to specialized knowledge entrepreneurs may lack. For example, partnering with an experienced product launch firm or social media marketer provides valuable expertise.
💡Distribution channels
Distribution channels get products to customers. New entrepreneurs may lack connections or ability to sell in certain markets nationally or globally. Partnering with established companies that already have wide distribution channels allows expansion of sales.
💡Legal services
Most entrepreneurs need legal help with contracts, policies, patents, etc. But full-time lawyers are expensive. The video advises startups to find low-cost local government resources or pro-bono help from attorneys to meet basic legal service needs.
💡Complementary partnerships
Sometimes partnerships are mutually beneficial collaborations between non-competing companies that share customers. They can create value for shared customers. For example, a chocolate shop could partner with a neighboring cafe.
💡Sustainability
The video states partnerships should benefit both parties long-term. If a partnership helps one company far more than the other or undermines the other's profits, it won't be sustainable over time.
Highlights

Key partners are individuals or companies outside our business that help with key activities

Partnering can lower costs through economies of scale as production becomes more efficient

Partnering can reduce risk by providing guidance and expertise in unfamiliar areas

Starbucks partnered with Nestlé to leverage their distribution network and brand influence, especially in China

Suppliers provide raw materials and ingredients needed to make our products

Manufacturers create the products using equipment and expertise we may lack

Distributors get our products to markets we can't easily reach on our own

Marketing partners help build our brand, design visual assets, and connect with customers

Legal partners ensure we follow regulations and help with contracts and policies

Complementary businesses can partner on sales campaigns to benefit shared customers

Choose partners to help with key activities we're not good at or lack resources for

Make sure partnerships are win-win and provide value to both sides

Paola decided to focus on making chocolate and partnered for other key activities

She partnered with suppliers for ingredients, distributors to sell products, and marketers

Ask for help when needed through strategic partnerships with experts

Transcripts

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