At the Future Investment Initiative conference in February, Uber CEO Dara Khosrowshahi said he wanted a Tesla collaboration but CEO Elon Musk was unwilling to do it. Khosrowshahi said he spoke with Musk about offering Tesla’s upcoming autonomous robotaxi service through Uber’s ride-hailing platform, but Musk declined.
“I’ve had conversations with [Musk]. At this point, they want to build it alone,” Khosrowshahi said. “Life is long, but we would love to partner with them.”
A collaboration could make sense for Tesla and Uber. For Uber, collaborations with autonomous robotaxi providers are a way to diversify from its human driver-heavy business model. For Tesla, collaboration could mean access to a new customer base and an expedited launch of its autonomous robotaxi service, since Uber has the infrastructure. But this collaboration doesn’t seem likely to happen at this stage, Khosrowshahi indicated.
As a business owner, you may be watching the Uber-Tesla saga or other collaboration conversations happening in the news with big-name companies and are considering one to accelerate business growth.
Here’s how to think about business collaborations as well as some expert advice on the factors that should go into your decision-making process.
1. Evaluate if a potential collaboration offers an equal value exchange
Despite not successfully collaborating with Tesla, Uber has partnered with Alphabet-owned Waymo. The partnership allows Uber passengers to hail autonomous Waymo robotaxis in Austin, and soon in Atlanta. Waymo started out offering autonomous robotaxis without partners and has grown to 200,000 paid weekly trips across Los Angeles, Phoenix and San Francisco, according to Alphabet CEO Sundar Pichai. (Alphabet is the parent company of Google.) The Uber partnership expands the autonomous robotaxi service.
Uber says it will manage fleet services, which include cleaning and repair. Waymo’s responsibility is managing autonomous vehicles and focusing on the Waymo Driver technology. This collaboration is an example of an equal value exchange.
When it comes to any potential business collaboration, you have to evaluate whether there’s an equal value exchange and whether the partnership makes sense for your strategic growth plan and initiatives. Ultimately, as a business leader, you need to make the decision and own up to the responsibility for it.
“I’ve had many opportunities to have collaborations both paid and free,” social media and digital marketing strategist Rachel Pedersen says. “Generally, the collaborations I’ve done have been good. I love partnering with tools and resources that support my existing audience of marketers and business owners.”
For example, she partnered with Dollar Eighty, a social media marketing software company that identifies which posts users should comment on to grow their own traffic. “They shared that one single video I created about their software increased their user base by 15%,” she says.
And how did Pedersen benefit? “I was able to serve my audience in meeting a pain point that they have with a solution that saves them time.”
She recommends that before you say “yes” to a collaboration, make sure the collaboration is beneficial to your audience as well.
“Don’t say yes just because a collaboration has a big name or a big brand behind it,” she says. “If it’s the wrong fit, it’s going to detract in terms of the trust that you’ve built with your audience.”
The second thing is to check whether the collaboration is focused on something that has a proven track record. “So, for example, if the collaboration opportunity is for a new product or a new division, I would recommend being careful about saying yes,” she adds.
2. Think about the possible logistics challenges
A business collaboration may sound exciting when you initially hear the offer, but the logistics of implementing it may be challenging. There may be a lot of monetary, time and labor costs.
“I’m a huge fan of making sure to not accept too many collaborations in any given year,” says Pedersen. “Each collaboration is going to take a lot more time than you initially planned for, so I recommend making sure you have the resources, the time and the ability to give it your all without it detracting from your existing business and brand.”
During an earnings call, Tesla CEO Elon Musk told investors the company would begin its own autonomous robotaxi service using its self-driving-equipped consumer models in June 2025. There may be a consideration of the logistics involved in a collaboration, or maybe Musk doesn’t think it makes sense. Either way, only time will tell if this was a good decision for Tesla.
A business collaboration should aim to accelerate or enhance growth, so you’ll want to ensure the logistics don’t impede those goals.
3. Do your due diligence thoroughly
Business deals require due diligence, and a collaboration is no different. You’ll want to verify the numbers, logistics involved, time needed and several other factors to evaluate whether a potential collaboration is aligned with your goals.
“I believe collaborations [are] one of the most powerful ways to grow your network and to grow your business,” says Shameca Tankerson, founder and CEO of Shameca International.
Tankerson says she first looks at whether a company’s values align with hers when deciding on a collaboration. Most of the collaborations she’s done have accelerated the growth of her business, she says.
“The second thing that I look at [is] opportunity… Do we have [an] aligned client base.… A big part of business is living and learning, trying things, and failing fast,” she says. “I have had some collaborations that didn’t quite work out as I intended…. However, even in those, there was a learning lesson that…also catapulted the growth of my business.”
4. Hire professionals to help navigate collaborations
The right professionals can be the key to success or failure in a business, especially in matters involving due diligence. A business attorney, certified public accountant, strategic financial adviser and other licensed professional should be considered in a business collaboration.
Sid Peddinti has been a business attorney for 15 years and says hiring professionals to evaluate a collaboration reduces risks and surprises. He uses collaborations to secure new business by partnering with other attorneys and nonprofits to get them grants and, in return, receiving a percentage of the money he secures.
He says before you collaborate, you should ask yourself:
- Does the collaboration add inherent value to your company, to the customer you’re serving and to the other company?
- Does the collaboration decrease your overall operational inefficiencies, perhaps even fixed expenses, by offloading or leveraging the other company’s resources? That could be capital, technology, human resources, intellectual ideas or intellectual property.
- Are you solving a problem in a better and a deeper manner?
Evaluate all the factors, talk to professionals and stay true to your company’s vision. Only you can decide if a business collaboration is worth pursuing, but choose it from an informed place.
Photo by Marc Dufresne/iStock.com
