Exclusivity

This is more of a continuing series of tips for B2B startups that are trying to develop pilot projects.

Often, organizations want to be early adopters of key technologies and solutions to get ahead of their competition. This actually needs to be one of your key selling points. But be careful not to get trapped into any type of exclusivity agreement that locks you into that major deal and thereby effectively shuts down your overall go-to-market strategy.

So how do you get around exclusivity?

First avoid it. Make the case that it will kill future market opportunities and makes the survivability of your business very low. Focus on shared opportunities, first-to-market capabilities, and perhaps creating a custom version of your offering that won’t be like what you may eventual sell to their competitors.

Second, if you are being pressed hard and want to get the deal done, then try to severely limit the scope on the basis of geography, time (e.g. six months), industry scope, and other factors that reduce the scope of the exclusivity.

Third, if you can’t negotiate something reasonable then consider walking away. It may not be worth your effort to get locked into something that will harm your startup and make you uninvestible. Investors will see that deal and know that you’re not a company that they can put their money into as you’ve limited  your growth opportunities.

Always read any contract presented to you and make sure that you don’t exclude yourself from your market with unnecessary and cumbersome exclusivity language.