Question
A hardware based startup with an innovative technical solution is looking to enter into a mature, consolidated market.
There is enough of technical advantage to consider direct sales, but this would have a longer road to break-even.
Alternatively, there is the option to work with companies already established in the field.
My main questions are:
1) What is the correct word/jargon to define a) selling a subassembly exclusively to an existing player, b) selling a manufactured product to be branded and sold to an established player (possibly exclusively for a time) [white label?],
2) How do I find cases/examples of these type of arrangements to get reference numbers so I can run financial projections?
We have met a few of the bigger players, and definitely see a road with JV or some other partnership. Need to build out my understanding of how these type of deals work - otherwise I am flying blind.
Thank you.
Answer
Hi.
Do a SWOT of your business and it will help you get answers.
Also draw out scenarios in each case of business projections over 3-5 years and compare based on rates of returns, risk and investments etc. to decide.
Let me know if you need help to think through.
All the best.
