During a National Small Business Week event, Inc. columnist Gene Marks and other experts discussed the trend of startups forming strategic partnerships to handle their non-core business functions.
If you are a nascent company, time is your enemy and resources are tight. You don’t have time to gain knowledge and skills you don’t have already, so you need to focus on what you’re known for and find smart solutions for problems you don’t know how to solve.
That was the theme of a National Small Business Week panel at PayPal’s Commerce Innovation Center in New York City on Wednesday. Gene Marks, Inc. columnist and owner of the Marks Group, a firm that provides technology and consulting services to small and medium-size businesses, moderated the discussion.
Marks said during the panel that there’s a trend among small business owners trying to keep up with competitors: forming strategic partnerships and outsourcing certain peripheral aspects of their business. With tech companies offering more niche services like website building and data analysis, startups are increasingly hiring them for cheap and fast help.
“One of the smartest things I’ve been seeing companies do is that they do what they do best and outsource the rest,” Marks said. “Companies are now thinking more about partners they can work with to provide the type of technologies, services, and solutions they cannot do or don’t have time to do.”
Alex Shvartsman, the owner of Kings Games, a gaming store in Brooklyn, New York, said he outsourced the work of setting up his e-commerce function. Shvartsman said he used Wix, a website builder, to create his website; PayPal for payment processing; and Ecwid for the site’s shopping cart plugin.
“I have no knowledge to build a site on my own, so I decided to find partners. For a business like mine, it took a few days to set up,” Shvartsman said. “The confluence of these three companies has helped my site become what it is today. When I tried to do this five years ago, the technology wasn’t there.”
Navigating all the available solutions is a delicate process. “It’s all about knowing your company’s core competencies,” said Dan Leberman, the vice president and general manager of PayPal’s North American online small and medium business unit. “As a small business, you need to decide what you’ll build and what you’ll give to a partner.”