Why Partnerships are the Ultimate Growth Hack

Growth hacking is no longer just a buzzword, it’s a marketing philosophy, a mindset and a culture for thousands of startups worldwide.

The problem? It’s probably the most misused marketing term of all time!

Growth hacking at its origin was a term meant to describe the work of “a person whose true north is growth. Everything they do is scrutinized by its potential impact on scalable growth”. It was coined by Sean Ellis back in 2010.

However, as the idea of growth hacking quickly went viral, following the success stories of companies like Airbnb & Dropbox “hacking” their growth, a huge myth was created around the growth & growth hacking.

People started viewing growth hacking as the process of finding one magic hack that will solve all your growing pains. Marketers everywhere (including myself) started looking for their own magic hack: a special button color, an exit popup, an SEO hack, you name it.

The sad reality is, there are no silver bullets when it comes to growth. There is no “one-size-fits-all” hack that could turn your business around.

Growth is a process. It comes from winning a hundred tiny battles, not one quick growth hack. It’s a hypothesis-driven experimental framework to everything that you do, whether it’s trying reaching a new audience or testing a new idea.

So while there’s a lot of misconception today around growth hacking, the goal remains the same: finding creative, innovative and cost-effective strategies to achieve growth at every stage.

With that being said, let’s look at why partnerships are the best growth hack you can capitalize on and exactly how you can use it to your advantage.

1. The Power of Partnerships

I have to admit, I was a victim.

I was a victim to the lucrative promises of “growth hacking”. I too was a lazy marketer desperately searching for that one solution that’ll solve all of our growth challenges.

I tested tens, if not hundreds of popular “growth hacks”. I tried executing on anything from “hacking” social proof by getting reviews on G2Crowd and Capterra, “hacking” conversions by implementing famous onboarding & email marketing hacks and “hacking” word-of-mouth by creating viral loops and/or gamifying our user experience.

Some of these experiments failed miserably. Others worked temporarily. But, I always came out disappointed that this tactic is neither scalable nor sustainable for our business growth.

Well, that was until we started testing partnerships and recognizing a unique pattern.

Partnerships, in its nature, was different than any other marketing strategy I’ve ever tested. It was powerful in the sense that it didn’t influence one area of our business, but influenced everything around our brand.

• It gave us the social proof we desperately needed.
• It established us as thought-leaders in our industry.
• It attracted a broader audience (and a new audience) to us.
• And ofcourse, it gave us the exposure we needed.

However, the true power of partnerships came from it’s compounding nature, or what I personally call the partnership compounding cycle.

2. The “Partnership Compounding Cycle”

In finance, compounding is an asset’s ability to generate earnings, which are then reinvested in order to generate their own earnings. In simpler terms, with compound interest (unlike simple interest), the longer you invest your money, the higher the earnings you’d receive year-over-year.

In the marketing world, however, most marketing channels have a “simple interest” nature, where your ROI in paid marketing channels is somewhat constant. The moment you stop paying for a Facebook ad or Adwords campaign, you will see an immediate drop in traffic, registrations, and upgrades from these campaigns.

On the other hand, we saw that partnerships had a “compound interest” nature, which simply works like this:

1. You partner up with Company X.
2. The partnership gives you access to Company X’s audience.
3. You generate leads, nurture them and convert some to customers.
4. The exposure and association with Company X help build your brand’s credibility.
5. The credibility you built helps you attract better partners.
6. Repeat.

So simply put, the more partnerships you do, the more exposure you’ll get, which in turn gets you more users and more social proof and as a result, you are able to partner up with better brands, better exposure and the cycle goes on and on.

This cycle explains the exponential growth achieved by billion-dollar SaaS companies like HubSpot, clothing brands like Supreme and hundreds of social media influencers worldwide. It also explains the sustainable growth we’ve been achieving at Venngage without having to abuse a marketing budget.

Today, thanks to the power of partnerships, Venngage is a leading graphic design platform with millions of users worldwide. We continue to grow at more than 1000% year-over-year simply by duplicating this process over and over again.

But, instead of turning this into a self-promotional piece, let’s shed light on the Supreme story instead. Let’s see exactly how the compounding nature of partnerships helped transform a niche skateboard brand into an iconic streetwear brand with one of the most loyal customer base of all time!

3. How Supreme Capitalized on Partnerships

In 1994, Supreme’s first shop opened in New York City. At the time, it was a small shop that offered merchandise catering to a very specific audience: skateboarders.

At the time, nobody knew who Supreme were. They didn’t have the brand, customers or revenue.

But, in the same year, Supreme pushed out their first co-branded merchandise. Supreme released t-shirts that featured Travis Bickle (Robert De Niro), the main character of the 1976 movie Taxi Driver, directed by Martin Scorsese.  

This partnership with Columbia Pictures Industries allowed Supreme to ride the success wave of this New York based movie. Supreme was able to leverage this movie’s success to their advantage by getting access to the movie’s wide audience. The exposure Supreme received was higher than they ever anticipated.

This partnership helped legitimize Supreme’s brand and gave them the initial push they needed to get on their feet and start growing.

That same year, Supreme decided to test a different partnership, this time with a NY-based graffiti artist, Rammelzee.

Rammelzee was a famous and very respected artist at the time, especially in the skateboarding culture. Supreme decided to collaborate with this artist by using his designs for different t-shirts and skateboards they were pushing out. This partnership allowed Supreme to again, leverage Rammelzee’s reach and gave the Supreme brand the authenticity they needed in the skateboard world.

Supreme started noticing the pattern here.

The following year, they continued capitalizing on what’s been working for them and decided to collaborate with another graffiti artist, Dondi White. However, the difference is, Dondi was virtually unknown in the skateboard world. Instead, he is a dominant figure in the hip hop culture. This partnership was very successful as it introduced Supreme to a new audience and helped establish their brand as a “counterculture” streetwear brand.

Now, we quickly start seeing the partnership compound cycle in action. Supreme’s brand was legitimized in the eyes of their customers, as well as other brands in the industry.

As a result, Supreme was able to secure a vital partner in 1997: Vans, the streetwear leaders at the time.

This collaboration with Vans was a turning point for the Supreme brand. Supreme was no longer just a new, niche skateboard brand. They were quickly able to leverage partnerships to establish streetwear dominance, only 3 years after the brand was found.

The value of partnerships to Supreme’s business was undeniable at that point, and so, as you might expect, Supreme decided to scale this process.

Now however, Supreme had a bigger customer base, an established and authentic brand and all the social proof they needed. As a result, Supreme can now attract better partners and they did exactly that:

Notable partnerships: Gucci (2000), Louis Vuitton (2000), Nike (2002), Timberland (2006) North Face (2007) and Budweiser (2009).

Fast forward to 2019, Supreme is now a billion-dollar company thanks to the compounding power of partnerships. They continue to leverage partnerships with hundreds of collaborations whether it’s collaborations with brands (Rolex, Playboy, etc…), artists (Prodigy, Kermit the Frog, etc…), celebrities (Kanye West, Drake, Lady Gaga, etc…) or even their own customers and brand evangelists.

So now that we clearly see how the partnership cycle works, it’s time to dive deep into how partnerships can help you hack your own growth. But before we do that, let’s quickly look at the process of identifying and choosing the right partners to collaborate with.

4. The Perfect Partnership

It’s important to mention that there are no “one-size-fits-all” manuals for partnerships. However, there are a few questions you can ask yourself to identify who the perfect partners are for your business.

1. Does Company X share a similar audience with us or do they have access to an audience we’d like to reach?
2. Are they direct competitors? Do we target the same keywords or offer the same service?
3. How many leads, if any, can we get from Company X? Is that worthwhile of our time?
4. Does Company X’s brand have a good reputation?
5. Are they easy & enjoyable to work with?

These questions will help you identify if a certain brand or company is a good fit for a partnership. The perfect partners would likely:  

1. Share a similar audience.
2. Not be a competitor.
3. Have a sizeable audience (email list, social following, etc…).
4. Have an established brand in their niche.
5. Be flexible & enjoyable to work with.

Pro Tip: Target companies that are either similar in size, or just a few steps ahead of your business. Even if you’re able to convince leaders in your industry to partner up with you early on, it would be tough to actually prove the value and/or deliver for them which could risk losing the opportunity to build a long-term relationship.

5. Types of Partnerships to Leverage:

Partnerships, as a term, is very vague. It describes any type of mutually beneficial collaboration between two or more people, companies or even countries. In the startup world, however, the type of partnership you decide to go with depends primarily on your product’s offering, your partner’s product and of course, your audiences.

In our case, we found that three specific types of partnerships added the most value to us and contributed to the exact areas we were trying to influence:

1. Co-marketing Partnerships
2. Link Building Partnerships
3. Strategic Partnerships

A) Co-marketing Partnerships

Co-marketing partnerships are when 2+ companies work together to promote a co-branded offer, usually a co-branded piece of content. That piece of content can be anything from a co-branded eBook, webinar, research/report, video series, newsletter, infographic, etc…

The process of this partnership is pretty simple: you and your partner would pool your resources and expertise to work on the piece of content. You can divide the work between both companies, where one would be responsible for the content and the other would be responsible for design and landing page creation.

The goal of these partnerships is also pretty straightforward: Pushing this piece of content to both audiences and generate leads that would later be shared with the other partner. These partnerships have been very effective with us personally, since it gave us the social proof we needed by associating our brand name with other recognizable names in the industry. It also helped build our authority in the graphic design space and gave us access to a broader and/or new audience base.

The real value however, is that a co-marketing partnership was in many cases the beginning of a long-term relationship with our partners. Once we prove to our partners that we can deliver on our promise (and in most cases overdeliver), they are always happy to come back to test a bigger partnership.

B) Link Building Partnerships

Link building is the process of getting external websites to link back to your website and/or your pages. Building links have two main benefits:

• It drives referral traffic to your website
• It increases your site’s authority (which helps you rank higher on Google).

Link building remains a necessity for most online businesses looking to rank on Google, increase organic growth or simply build their brand.

We’ve always consciously tried to build links to our pages. Below are the three main link building partnerships we’ve successfully executed on:  

1. Link Exchanges (not recommended): By far, the most popular link building strategy out there. Very quick & simple: You and your “partner” would agree to link to each other’s pages in existing blog posts. You would link to a blog post of theirs naturally and they would do the same. Even though link exchanges still seem to work well, they are viewed by Google as rank manipulation, which is obviously risky since you can easily get penalized by Google for doing so.
2. Guest Posting: This is pretty much self-explanatory. You offer to write a blog post for an authority website. Guest blogging gives you the opportunity to establish yourself and your brand as thought-leaders and/or authority in certain subjects. The blogs you’d write for usually agree on adding a few backlinks to your website and/or blog posts in return. This is a safer way to build links for your website.
3. The Guestographic Method (my go-to approach): This is a link building technique which uses infographics in a new way. With this method, you simply create an infographic that covers a certain topic, find blogs that covered the same topic, share your infographic with them and see if they would be interested in either adding it to their blog post or using it in a future post. Since you’re adding real value to your partners by offering them something tangible that they could use, it has a much higher success rate than the other two strategies, especially when your business is at an early stage.

We also took this strategy to another level by reaching out to websites and offering to summarize an existing or future blog post in return for a link. This was an easy way for us to get links without risking being penalized by Google. It also was, in many cases, the way we tested if a company/blog is a good fit to scale partnerships with.

Link building partnerships are usually quicker than co-marketing projects, but their effectiveness is also much smaller. However, the way we approach this partnership is exactly the same as any other type: it’s simply an opportunity to build a long-term relationship with these brands and expand our partnerships further. In other words, it’s one of the hundred tiny battles we need to win to achieve scalable growth.

C) Strategic Partnerships

This brings us to the last type of partnership that could help you hack your growth. Strategic partnership could include any type of mutually beneficial collaborations, but below are the 3 strategic partnership types we’ve found the most success from:

1. Strategic Integrations: At the beginning of the post, we used Airbnb as one of the companies that helped popularize “growth hacking”. Their hack was an integration with Craigslist, which helped them “hack” the need for a huge customer base early on to prove their business model. Instead, the integration gave them access to the millions of users already using Craigslist. Integrations could be vital for any startup since it helps expand a product’s limited offering and also significantly improves the customer experience.
2. Affiliates/Brand Ambassadors: Affiliate marketing is the performance-based marketing tactic where you would compensate people for referrals they drive to your business. This is a great way for you to allow people who enjoy your product the most to become evangelists for your product. Similarly, partnering up with influencers is an option here, which could give you the social proof and trust you need to grow.
3. Marketing Stunt Partnerships: This is by far, my favorite type of partnership. However, it’s also the toughest partnership to execute on. In most cases, it involves collaborating with other companies to create publicity around both brands creatively. Finding a way to work together to execute on a marketing stunt is a very powerful way to drive eyeballs to your business at any stage. However, you need to be cautious not to fall victim to the lucrative promises of “publicity stunts”. Find a way to quickly test and validate your stunt idea before investing too much time and energy into it.

Conclusion

Growth is a step-by-step process. Partnerships can accelerate your growth by making each “step” bigger than the one before it, thanks to the power of compounding.

I realize that there are tens of other partnership types that could help your business grow exponentially. However, I wanted to only highlight the ones that I’ve personally tested and executed on successfully over the last few years.

It doesn’t matter what type of partnership you end up choosing though, since they all share the same compounding nature: the more partnerships you do, the higher the effectiveness of each partnership is going to be.