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Lucid Tech

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My apologies for the hold-ups!

DONE

Episode 26 is LIVE

The Power of Partnership!


In this episode, I address something I have been meaning to address for a long time. The Power of Partnership. We aren't talking about business partners, we are talking about strategic partnerships. What is a strategic partner? How can strategic partners help your business? Also, find out what I am pissed off about and also a little bit about Robinhood on this episode of KBRS.
@Kak I just listed to the episode around partnerships. It's a great brief intro-level discussion around what these could look like.

While understanding the need to maintain confidentiality for your own projects, my feedback would be that people could benefit from an expanded episode that goes into more detail on concrete examples of partnerships that you've seen in the wild.

At least for me, the more specific examples I read or heard about, the more obvious these potential opportunities became.

Strategic partnerships made my career. I first joined (and then later ran) a spin-out company from a major university. The MD and PhD-holding professors we collaborated with had collectively spent many decades studying, researching, teaching, and publishing papers in a very complex field.

With one partnership agreement (licensing their name and "knowhow") we had the benefit of all their collective wisdom and a 150+ year old university brand name behind us. All it cost was a future x% of revenue. We risked nothing, and used their knowledge to elevate our line of products to a much higher level.

My second venture was a similar setup, where we licensed the data and results of a $12M, multi-year NIH funded grant from a major research institution. We were the only company in the world to have access to this dataset, protected by multiple patents and published in a variety of peer-reviewed journals, and we built an entirely new line of products around this.

Both companies sold products to hospitals, which is a long and complex process not unlike walking through a minefield.

Instead of building a large sales force, we partnered with nearly a dozen organizations who were much larger than us and already had a number of hospitals as existing customers. They'd package our product with theirs as they were already preferred vendors.

We'd split 20%, 30%, sometimes 50% of the revenue but it didn't matter as our marginal costs were next to nothing for our software.

My examples all revolve around licensing and distribution deals but there are infinite other types you can do. In my view the more examples of specific strategic partnerships you can provide, the more people will see the parallels within their own businesses.

Just my 2 cents.
 

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Knuffix

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In that regard, the book "From Mediocrity to Millions" by Jay Abraham is a goldmine. (There's a free pdf version of that book on the web, just google the title). Goes in-depth into all kinds of ways to joint venture / partner with other firms to mitigate lots of the startup risks / requirements. Recommended read in terms of partnerships!
 

Ronak

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@Kak I just listed to the episode around partnerships. It's a great brief intro-level discussion around what these could look like.

While understanding the need to maintain confidentiality for your own projects, my feedback would be that people could benefit from an expanded episode that goes into more detail on concrete examples of partnerships that you've seen in the wild.

At least for me, the more specific examples I read or heard about, the more obvious these potential opportunities became.

Strategic partnerships made my career. I first joined (and then later ran) a spin-out company from a major university. The MD and PhD-holding professors we collaborated with had collectively spent many decades studying, researching, teaching, and publishing papers in a very complex field.

With one partnership agreement (licensing their name and "knowhow") we had the benefit of all their collective wisdom and a 150+ year old university brand name behind us. All it cost was a future x% of revenue. We risked nothing, and used their knowledge to elevate our line of products to a much higher level.

My second venture was a similar setup, where we licensed the data and results of a $12M, multi-year NIH funded grant from a major research institution. We were the only company in the world to have access to this dataset, protected by multiple patents and published in a variety of peer-reviewed journals, and we built an entirely new line of products around this.

Both companies sold products to hospitals, which is a long and complex process not unlike walking through a minefield.

Instead of building a large sales force, we partnered with nearly a dozen organizations who were much larger than us and already had a number of hospitals as existing customers. They'd package our product with theirs as they were already preferred vendors.

We'd split 20%, 30%, sometimes 50% of the revenue but it didn't matter as our marginal costs were next to nothing for our software.

My examples all revolve around licensing and distribution deals but there are infinite other types you can do. In my view the more examples of specific strategic partnerships you can provide, the more people will see the parallels within their own businesses.

Just my 2 cents.

Love it!
Partnerships allow you to buy into other people's resources and pay with future revenue, eliminating risk, reducing time to market, and increasing credibility.

There are so many untapped resources, especially at the university level. Most of this R&D is openly available for commercial licensing, and most have a dedicated office of patent licensing.

@Lucid Tech what was the timeline for getting your license? I've heard that they tend to be quite long to get something licensed and out to market from universities. What type of patent was it and how did it apply to software?

Great post and thread!
 

Lucid Tech

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Love it!
Partnerships allow you to buy into other people's resources and pay with future revenue, eliminating risk, reducing time to market, and increasing credibility.

There are so many untapped resources, especially at the university level. Most of this R&D is openly available for commercial licensing, and most have a dedicated office of patent licensing.

@Lucid Tech what was the timeline for getting your license? I've heard that they tend to be quite long to get something licensed and out to market from universities. What type of patent was it and how did it apply to software?

Great post and thread!
Yeah the timeline was no joke. You're dealing with academics and bureaucrats, not entrepreneurs, so things move slowly. Our initial license probably took 6 months from idea -> discussion -> verbal agreement -> various contract drafts -> final signed version.

Subsequent licenses were much faster as we had a better idea of what to expect, who actually makes decisions, and who's just a talker.

Without going into details, we licensed essentially a "big data" set that could model out expected patient outcomes over time. No one had gathered anywhere close to this level of data for a particular medical condition and mapped it with other comorbidities before the large-scale NIH grant. We then built software around this to allow health systems to perform this modeling in real-time.

To your point, many large universities do this. Want the Stanford brand behind you? They currently have 1,500+ technologies available for license here Office of Technology Licensing |
 

Ronak

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Yeah the timeline was no joke. You're dealing with academics and bureaucrats, not entrepreneurs, so things move slowly. Our initial license probably took 6 months from idea -> discussion -> verbal agreement -> various contract drafts -> final signed version.

Subsequent licenses were much faster as we had a better idea of what to expect, who actually makes decisions, and who's just a talker.

Without going into details, we licensed essentially a "big data" set that could model out expected patient outcomes over time. No one had gathered anywhere close to this level of data for a particular medical condition and mapped it with other comorbidities before the large-scale NIH grant. We then built software around this to allow health systems to perform this modeling in real-time.

To your point, many large universities do this. Want the Stanford brand behind you? They currently have 1,500+ technologies available for license here Office of Technology Licensing |
6 months is pretty fast, not too different from dealing with a large corporate entity.

What are you working on these days? Start a thread, you could potentially contribute a lot to the forum members.
 

Lucid Tech

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6 months is pretty fast, not too different from dealing with a large corporate entity.

What are you working on these days? Start a thread, you could potentially contribute a lot to the forum members.
I sell garlic presses on Amazon and make literally tens of dollars per month.

Kidding.

Me and some of my former investors have formed an informal private equity group, technically a "fundless sponsor" model as we don't have outside capital, just our own money and strong relationships with several banks. Basically we try to buy 8 figure companies and turn them into 9 figure companies.

For a lot of reasons, there's too much info I'd prefer to keep confidential to start a forum thread, even on the Inside.
 
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Kak

Kak

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Partnerships allow you to buy into other people's resources and pay with future revenue, eliminating risk, reducing time to market, and increasing credibility.
Let me give a great example... Today my team and I are finalizing a bid for 2.2 million pounds of material per month to a major consumer. We currently have a 4 man team. Our competitor on this deal is a 3 BILLION dollar publically traded company with 9000 employees. We already know their pricing at this geography and have undercut them while still leaving significant margins... How did we do that? Solid strategic partnerships.
 

GPM

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Let me give a great example... Today my team and I are finalizing a bid for 2.2 million pounds of material per month to a major consumer. We currently have a 4 man team. Our competitor on this deal is a 3 BILLION dollar publically traded company with 9000 employees. We already know their pricing at this geography and have undercut them while still leaving significant margins... How did we do that? Solid strategic partnerships.
I am just throwing this out there, because Kyle has touched on this before. This STARTED by reaching out the President of a division for this particular consumer. It did not start with a gatekeeper or some entry level employee. It started from the top, and from there it was personally passed down from the boss to the exact guy who handles this material.

Also, it didn't sound that big unit you added that million name to it haha. Add more zero's!
 

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