Fairness is key for lasting alliances

The early history of founder Robert Mao's Chinese company UUZone is a good example of a high-growth business struggling to engage a strategic partner by standing out in a field of undifferentiated providers.

Adopting the Friendster model, the Chinese social-networking company UUZone aims to help young people expand social networks through an online platform. But how to stand out among dozens of similar Internet companies in China and attract the correct target audience?

Mr Mao looked to a media company to help promote awareness about UUZone and organise offline activities for the venture's clients, whom he refers to as UUZone users.

Based in Shanghai, the most vibrant city in China today, Mr Mao began looking for the right ally but was soon drowning in a deep pool of all sorts of media companies. Available in the market are more than 40 newspapers and 60 magazines, as well as hundreds of television and radio channels.

"Our target customer group is young Chinese with a tertiary education background," explains Mr Mao. "I want the best channel to publicise to them. This criterion still left us with dozens of potential partners."

As a new business, UUZone could not afford a deal with a television channel. Moreover, most of the newspapers in shanghai target the mass market, an audience too general and ineffective for UUZone. Therefore, Mr Mao decided to choose one specialised print medium first as a test.

Starting in early 2004, Mr Mao and his marketing team spoke to more than 10 magazines in vain. The biggest difficulty they faced was in explaining UUZone's concept and the benefits of collaboration to the chief editors of a potential partner, many of whom were not familiar with on-line platforms.

Recalls Mr Mao: "I used to get two common replies: 'Our magazine already has a website,' or 'Can you help me design a website?"'

A partner with style: Luckily, UUZone's investor referred Mr Mao to Meimei, a fashion magazine for young women in Shanghai.

Having lived and studied in the United States, the magazine's chief editor was up to date with current trends in fashion and shared UUZone's ideas on the likes and dislikes of the younger generation in China.

UUZone hence chose Meimei as the first media partner at the end of 2004. Mr Mao judges that this alliance has progressed smoothly because of effective communication between the two allies.

More importantly, both companies were realistic about the costs of and gains from the partnership. By collaborating with the magazine, UUZone can now provide more offline activities such as beauty contests and fashion workshops to its users.

The magazine benefits from exposure to a previously untapped customer segment. "This is a win-win situation, and the collaboration cost neither of us much," says Mr Mao.

Working with Meimei has taught Mr Mao more about partnering with media companies: "Initially, we thought a magazine would help us attract more users, but now we find that events and activities may be more realistic and valuable to us."

UUZone gradually found four to five magazine partners, each with a niche market focus. Mr Mao says the current mix will meet the needs of all his users; he prefers to form long-term strategic partnerships with current allies, rather than engaging many more media.

"A successful relationship needs to be based on fairness in equity," says Mr Mao.

"A market leader or really big partner need not necessarily suit one's venture," he added.

His recommendation to other entrepreneurs is to always weigh the costs and gains of each partner to ensure fairness in a relationship, as that is the only way to make an alliance last.

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