6 Reasons Why MSPs Form Startup Partnerships

… lower a customer’s cost without it coming out of your budget, all while showing them the latest innovations,” Schijns said. “Save them some money on critical apps and you can keep your services billings intact.”

She also noted that the products and services offered by startups are “often miles better than what [the customer] has today — for a fraction of the cost.” MSPs can’t afford not to offer solutions from startups when their customers come to them for all their technology demands, but want them to be budget-friendly.

How to Work with Startups

One of the only reasons an MSP might not want to work with a startup, according to Bloomer, is if the MSP isn’t looking to be a true partner.

“Typically, a startup will require a little more hand-holding and, at least initially, a larger time commitment,” says Bloomer. But, “that’s also a wonderful opportunity to develop a relationship and partnership where the MSP can offer IT expertise, planning and input to create real value.”

So if an MSP has decided to begin a startup partnership and take advantage of all the benefits of doing so, it still needs to know how to form that working relationship.

“The earlier on that MSPs start working with the startups, the better for both organizations,” Bloomer says. “The MSP will future-proof infrastructure growth as new employees, locations and products/services are added throughout the startup’s lifespan.”

“It all starts with the commercial agreement,” said Schijns. “There are many ‘cool’ solutions out there in a number of areas of the industry … However, cool never paid anyone’s bills, so they have to be able to support a billing model that enables the partner to make money and retain some level of ownership of their customer.”

She suggests that MSPs look for agreements that benefit the channel in terms of compensation and customer retention. It’s also important to make sure the startup has a channel-partner strategy and program.

“Don’t take their startup status as an excuse not to have a channel program,” Schijns says.

These programs can be pulled together quickly, particularly with the help of a consultant who can set them up correctly. Bloomer had similar advice.

“The relationship should, of course, start with an IT strategy and plan,” she says. “Just as a company has a business plan, it also needs an IT strategy that aligns with that plan. An MSP can help the startup map out an IT growth path that makes the most sense for the size, scale and functionality of the organization.”

Bloomer also suggests that MSPs can help startups by making them aware of useful solutions they may not yet know about.

She also notes that “the most important aspect of maintaining the relationship is providing continued value and being a true partner.”

Finally, MSPs should be sure that the startup has defined its rules of channel engagement.

“If it is a free-for-all with their direct channel, it is best to skip the engagement,” Schijns says.

With a properly configured agreement in place, MSPs working with startups can be a mutually beneficial way to do business. Everyone, including the customers, will be better for it.