Little did the pair know that shortly after sliding into our #newmembers Slack channel, they would share a serendipitous encounter and enter into a partnership intended to bring value to their respective customers. Soon they would discover why being connected is better for business.
It all began when, as is customary for new Founders’ Network members, Megarry posted a message introducing himself and Koala, which “empowers solo travellers through tech and provides unique trips & experiences for young professionals”. The startup wants people to share experiences and travel with others, matched using algorithms, instead of their friends.
“It’s very lonely and tough being an entrepreneur, so I think there’s a need in the market for natural support and bouncing ideas off people,” says Megarry. “I think Founders’ Network very much has that vibe about it.”
The post was seen by Pluto founder Birch, whose insure-tech startup aims to make travel insurance more appealing and trustworthy to young people. After reading Megarry’s message, he was instantly intrigued.
“After seeing Stuart’s post, I thought these guys are literally the perfect fit and synergy for what we’re trying to do,” he says. “We had just started to think about our partnerships strategy and identified businesses in a few different areas, including travel, so I reached out for a coffee and a chat.”
Being based in central London made it convenient for the entrepreneurs to meet up and discuss the opportunity. When booking a bespoke trip – whether a chicken wing tasting experience in East London or a four-day trek in Spain’s Asturias – Koala’s customers would have the option of taking out travel insurance from Pluto.
Birch was one of several people to contact Megarry with a partnership proposal after seeing the post.
“I had another gentleman from Founders’ Network approach me with a very good product, but at the time it didn’t meet synergies,” says Megarry. “Our customers ask for flight and travel insurance recommendations which aren’t our core business products, so it makes more sense for us to partner with people who are doing it right – and James was a natural fit.”
In the opposite direction, there was a need to clearly articulate why Pluto’s “niche” insurance offering was a good fit for Koala, says Birch.
“We didn’t just state that we wanted to partner – we also explained why we’d be a good fit and what the partnership would look like,” he says. “That’s the only way I think you’d ever build a partnership – you can’t just email the same deck to a load of people in a group as that wouldn’t work.”
Trusted and vetted
Every Founders’ Network member has been through an application process before being accepted onto the programme, which gave both founders confidence when partnering.
“I think there needs to be a barrier of entry to this kind of thing,” says Megarry. “Founders’ Network having a vetting process certainly helps with that.”
Even so, whatever the platform or situation, he advises startups to be cautious before rushing to sign on the dotted line.
“Any partnership needs to be a ‘win-win’ relationship where neither party takes advantage of the other,” he continues. “Partnerships are great in providing services to customers, but be wary that some people might want to partner just for using your resources because they can’t do it, for example.”
Commitment is another factor to consider, says Birch, who warns against partnering for the wrong reasons.
“At its most basic level, a partnership is just a relationship – and you must ensure you’re not doing it for the sake of it or to impress investors,” he says. “You have to create a strategy around it and approach people you think are similar or complementary to your own business.”
And what should happen if the partnership doesn’t work out?
“Either of us can knock it on the head with no qualms and we can go our separate ways, which is fine,” says Birch. “That’s why you should always build the relationship personally upfront – and you can use simple things like a 30-day break clause in your high-level contract.
“That’s the advantage of working with other startups – everyone has the same goal which is fundamentally scaling the business and providing customer value. If somebody’s letting down the team on that partnership, then it’s understandable that you should stop.”