EC1 Capital

Last week, we announced a new major international partnership and our upcoming expansion to the US. The expansion was a natural fit for the business as we look to bring US patients and suppliers similar value as we have achieved in the UK. Just before the announcement, I was in Washington as part of a small group of UK health businesses invited to attend the NHS/UKTI Health Datapalooza event, seeking to strengthen ties between the two countries.

Toothpick is now the UK’s leading online booking platform for dentist appointments. Since our launch in 2013, we have facilitated dental care services to the value of around £25 million, with over 1 million bookings going through our technology. We’ve now partnered with one of the largest dental discount providers in the US; acquiring a unique springboard into a large new market and at the same time filled a gap in our product offering.

Often overlooked, building and creating partnerships can be a powerful exercise in growing your business. Partners have been at the epicenter of Toothpick’s growth strategy to date and we’ve learned a few rules of engagement to share with those trying to navigate corporate relationships.

It’s quite common nowadays to see small start-ups taking on far too much in terms of their value proposition, and trying to be everything for everyone. The overall impression of the business can thus get diluted and focus lost. Working with partners that have experience, cost efficiency and/or expertise in areas where you are weak, or you face substantial costs, can be a great vehicle for growth. This approach also allowed us to partner with the likes of the Scoot Network, 118.com and Thomsonlocal earlier this year, resulting in additional 15 million people exposed to our appointments each month.

Dos – Qualify Carefully

It’s crucial to have a clear vision of what you want to get out of the partnership. This will also help you define some of the benefits for the partner as well. Go back to your original assessment of the potential partner’s key assets and skill, and consider your own needs both now and going forward.

You can be brutal in your assessment of what they can bring – there should be synergy in your goals and clear practical benefit on key KPIs (although the PR can be good too!). In this latest instance we went with an international partner who brings local market knowledge. A local partner can be a great shortcut to a market, helping you navigate local laws and protocols as well as social patterns and culture.

Remember that no partner is too big - even if you are just starting out. In many instances it’s easier for a large partner to test new services and products through partnering with more agile businesses than executing on new ideas themselves. Often, it can also set the scene for an acquisition, should this be of interest.

 These four types of scenarios are common when it comes to partnerships: 

1. A distribution or licensing deal where the parties look to sell or distribute into an existing supply or demand network;
2. Joint ventures or collaborating together on a product or service, this would typically result in a revenue share of the outcome;

3. Sector associations also sometimes known as co-competing, where both parties work together on one aspect of their business while remaining competitors in other areas

4. Cross promotion where the parties create promotional materials or activities that simultaneously raise awareness of both products, to a greater audience or with a stronger message than would have been possible each on their own.

Toothpick is a two-sided marketplace, so I look for three key drivers in potential partners - all of which can be applied to international markets. Firstly, can the partner help me accelerate the supply side of the business (signing up dentists)? Secondly, can the partner accelerate the demand side of the business (patient bookings)? Thirdly, if the supply and demand economics already exist, can Toothpick bring any assets or experience to improve/optimize or monetise that space?

Potential down sides and stuff to watch out for

1. You have to justify the time and financial impact of the partnership on your business, and this comes down to the original qualification of the deal – will it be worth the distraction away from the day to day of your own business;
2. Consider if the partnership could prevent investment or acquisition down the road due to the association or existing partner/investor being a wider competitor. Always consider your future strategic opportunities;
3. You’ve probably heard this before but don’t get lost or carried away with the potential size of the opportunity and overlook the legals. Unprotected decisions at the early stage of a business can be difficult to work your way out of;
4. The larger partner will not be as agile as you are so it can take a long time and a lot of resources to get anything done – beware of scope creep that will hurt you a lot more than them! If you’re not careful and hold your own when it comes to timelines and commitments you can burn through your runway quickly;
5. Consider what you would do if a partner underperforms or under-delivers. Ensure you’re properly covered in the commercial agreement so that you can act swiftly before you incur losses.

In summary

The right partnerships, well executed, can completely alter the outlook of your business – in many areas. You can find yourself with new value add services, new customers, new markets and best of all partners that will fly the flag for you in contexts previously inaccessible. Collaboration in business is a great thing - take a look around your industry and you’ll be amazed at the opportunity you can find.

If you feel there would be benefit in partnering with Toothpick drop us a line at info@toothpick.com.