create a portfolio that balances the value of intimate dealings with your partners against the cost of having to commit too many resources to capture that value. We've already seen how the Web can be a critical tool in achieving this goal. Look at how Intuit (INTU) has stitched together a rapidly changing set of financial service partners into what looks like a seamless supermarket at Quicken.com. The plumbing that connects these partners may look awful, but as long as the users aren't aware of it, you can transform the portfolio into a new product and service quickly and relatively cheaply.
Indeed, one way to think about the Internet Economy is not as hundreds of disjointed startups experimenting with new business models, but as a few very potent partnership portfolios. I mean, of course, the VCs (Kleiner Perkins), incubators (Idealab) and holding companies (CMGI) that lubricate the process with money but also pool the risk, help entrepreneurs leverage each other's expertise and experience, and connect the user communities of their holdings to multiply their network value.
Many of the big dot-com company mergers that have taken place this year were easier to accomplish because the parties all shared one or two major investors. Excite (ATHM) and AtHome, for example, were both part of the vast Kleiner Perkins keiretsu.
If you're in a traditional business, your new competitor is not some 25-year-old with $20 million in seed money. Your new competitor is all of Silicon Valley.
In creating your own portfolio of partnerships, you'll need to understand first what strengths and weaknesses you bring to the party, even before you test those of your potential partners. You may have a sterling brand name; impressive production, distribution, sales or marketing resources; or underutilized networks of loyal, educated, impassioned customers and suppliers.
Most likely, you will also have an encrusted industrial-economy bureaucracy finely tuned to react to potential partners as if they were deadly viruses entering the corporate bloodstream. That bureaucracy probably operates most effectively through legacy computing architectures and applications - precisely where you want it least.
Start by evaluating your current set of relationships. Then take a hard look at your ability to form new ones in a hurry. As Yahoo's Collet says: "A partner can't be someone who slows you down."
Larry Downes is an e-business consultant and coauthor of Unleashing the Killer App.
