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Crazy Quilt Principle

Entering into new partnerships can bring the project new funds and new directions.

The crazy quilt principle is about finding partners to get your startup off the ground. In this context it does not mean you going to enter into a joint venture it means that by working with larger, established companies and getting certain commitments from them you can get traction faster and cheaper than if you had to go it alone.

Another way of getting traction for a startup is to have “offtake” agreements. An offtake agreement is an arrangement between a producer and a buyer to purchase or sell portions of the producer’s upcoming goods. While it is popular in farming in mining a derivative can be used in many industries.

This is why the “who you know” in the “Bird in Hand” principle is so important.

sb2sb.com proposes another option that can be used. In our marketplace (listings and trade leads) we allow both buyers and sellers to stipulate whether they need, a complete product, only the raw material, only labour or a combination. This means that a buyer can provive the raw materials and you can provide the labour and equipment needed to manufacture the goods.

One of the ways of cooperating with a partner is to go to existing companies in your industry, companies that would be considered competitors and ask to supply them with niche products that they are not able to produce efficiently themselves. You can then do the smaller tasks that the company does not do themselves.

When starting out it is hard to compete with existing, more established companies unless you have something special. Niche products are another one of the ways to compete.

Read Focussed Low-cost Provider & Focussed Differentiation for niche strategies.

Partnerships with existing companies provide a safety net, reducing uncertainty because they have existing clients and you don’t have to go out and find new clients. It also provides a way to prolong your Affordable loss with guaranteed income.