Startups <> Corporates
Selling to, and collaborating with large companies
dec 4 | friday
1.30pm PT
Founder Academy
#XACADEMY Series
#XACADEMY Series
Mathieu Guerville
Founder & CEO @ fnma.work
Walking the walk
>10 years of corporate innovation (consultant + public & private sector)
> 5 years of startups (solo founder, 500 Startups alumni)
Talking the talk
> 5 years public speaking, 50+ clients, 3 continents
> 2 years of academia, adjunct prof at top 20 global MBA program
Betting the farm
> 75 angel investments + 8 VC investments
> 10 Mentor + advisor roles (alchemist accelerator, ie ventures, etc.)
>10 years of corporate innovation (consultant + public & private sector)
> 5 years of startups (solo founder, 500 Startups alumni)
Talking the talk
> 5 years public speaking, 50+ clients, 3 continents
> 2 years of academia, adjunct prof at top 20 global MBA program
Betting the farm
> 75 angel investments + 8 VC investments
> 10 Mentor + advisor roles (alchemist accelerator, ie ventures, etc.)
How startups work
(80% of the time)
(80% of the time)
- 1. IdeaInsights from the market trigger an idea and soon after a (often naive) vision for bringing it to life
- 2. ExecutionSmall team with a singular problem and a sense of urgency created by unprofitable P&L and pressure from investors.
- 4. ScaleStartups who survive (first milestone) then focus on scaling, while trying to avoid becoming just like their larger competitors (by having ping pong tables)
Fewer than 5% get to this stage - 3. IterationMistakes happen, assumptions are disproved and it's time to change tracks when you realize the current one heads towards a cliff
How corporates work
(80% of the time)
(80% of the time)
- 1. IdeaComing from a conference room so far into the building the outside light doesn't get in, let alone outside ideas.
- 2. Internal negotiationsTo become a project, and idea needs to became a deck, which goes through 10 revisions, and then through 3 layers of approvals, getting more diluted everytime.
- 4. Resources allocationPeople weigh in the odds of success of the project as they plan their career track in the company, lowly qualified opportunists and high potential but unmotivated people get assigned to the project.
- 3. Backstabbing and politicsSome people who publicly agreed to back the project now work to undermine it, drag their feet, or ask for favors in return for support.
- 5. Scheduling wack-a-moleCross functional team, differing sense of priorities, and just like that it takes 2 weeks to schedule a meeting, that will take place in 4 weeks, and be rescheduled twice.
- 6. ExecutionPeople work in silos, with some misunderstanding about the general direction compounded by the distractions, lag and slow pace between meetings.
- 8. Zombie projectCreative accounting manages to make the project look "OK" so the sponsors save face, and most of the team returns to their normal roles
80% of projects end up here - 7. Change of directionUsually as a result of new strategic planning exercise. Or the CEO read a business book they now use for every decision.
The different types of startup value proposition
- VitaminsHard sale against the status quoIncrease revenue, supports decision making, reduces risk
- Pain killersEasy sale against a burning issueReduces costs, stop ongoing problem, opens a locked door
- CandyEasy sale during good times onlyOften disguised as vitamins to get approval from the buyer's manager
Perspective
What is candy for some is painkiller for others, etc.
What to know
Selling to Corporates
Value Prop
Pain Killer
Vitamin
Candy
Top of the funnel
Easy
Challenging
Hard
Middle of the funnel
Challenging
Challenging
Challenging
Bottom of the funnel
Hard
Challenging
Easy
Key challenges
Surviving the procurement process
Reaching the procurement process
Delivering value to the champion
Build vs Buy
(vs Partner)
(vs Partner)
Understanding the corporate technology decision making process
Building in-house capabilities is almost always the first option explored by any large business, whether for internal IT or actual innovation projects.
But most traditional businesses do not have the right expertise in-house, and have corporate "antibodies" that will fight the BUILD initiative.
Timing, costs, and sustainability in the long run are key factors.
But most traditional businesses do not have the right expertise in-house, and have corporate "antibodies" that will fight the BUILD initiative.
Timing, costs, and sustainability in the long run are key factors.
Buying a capability by acquiring a business is an attractive option when the failure risk of a Build scenario is high AND the timing factor is essential. Ego is also a huge component of the BUY decision.
Partnerships have emerged as a middle ground, delivering the speed and expertise of the BUY case, while presenting a cost profile and risk equation more akin to the BUILD case.
However, in most cases, corporate arrogance sees partnerships with startups as a David vs Goliath dynamic and seeks to reap an unfair share of the value created.
Worst of all, in the eyes of most corporates, partnership is a temporary arrangement until they can re-assess build vs buy.
Partnerships have emerged as a middle ground, delivering the speed and expertise of the BUY case, while presenting a cost profile and risk equation more akin to the BUILD case.
However, in most cases, corporate arrogance sees partnerships with startups as a David vs Goliath dynamic and seeks to reap an unfair share of the value created.
Worst of all, in the eyes of most corporates, partnership is a temporary arrangement until they can re-assess build vs buy.
Partnering with Corporates
Value Prop
Pain Killer
Vitamin
Candy
Start of the pipeline
Easy
Hard
Middle of the pipeline
Hard
Easy
End of the pipeline
Hard
Easy
Partnership Benefits
Business Development
Logos
Case studies
Case studies
Partnership Risks
IP Theft / Endless customization
Zombie projects
Zombie projects
Sales cycle slowdown
Key factors
Selling to, or partnering with corporates requires 3 key factors
ChampionsInertia and status-quo is the norm in corporate settings, but ambitious people see change as a way to advance their careers.
Help them and they'll help you, open doors and help with translation and building your ROI case.
TranslationStartup-land has its own jargon, corporates do too, unique to each industry and company.
"It's like Slack meets Trello but for desk-less workers of the gig economy" needs to become "it's like a modern pager for your {insert three letter acronym} field staff"
ROI++While you need to show a $ ROI for the enterprise, it's essential that your champions and economic buyers also see a personal ROI
What's in it for me to help my employer? is a surprisingly common state of mind.
What to do
Keep it narrow
The skillset of your counterparts in corporate is deep but very narrow, unless you want to have the project team (and therefore the schedule and expenses) grow exponentially, stick to a simple scope.
Holistic marketing collaboration: too broad. You'll have 5 stakeholders.
Twitter campaign collaboration: good start. quick win.
Find your champions, and scope your projects solely within the boundaries of their decision making authorities and areas of responsibilities.
Holistic marketing collaboration: too broad. You'll have 5 stakeholders.
Twitter campaign collaboration: good start. quick win.
Find your champions, and scope your projects solely within the boundaries of their decision making authorities and areas of responsibilities.
Land
Win
Expand
Win more
Create urgency
"Let's touch base soon" in startups means tomorrow, in corporates it means next month, before it get rescheduled a few more weeks out.
Have clear deadlines, and use whatever forcing functions you can to drive timely actions. Very similar to the close of a sales process.
Have clear deadlines, and use whatever forcing functions you can to drive timely actions. Very similar to the close of a sales process.
Corporate:
Ok, so I think we're ready to move forward.
Startup:
OK, when can you sign the MoU?
corporate:
I have to run it by legal and my business unit president
startup:
Let's have a call with your legal team Friday, what do they need to see before the call? What are your BU president's questions so far, when can you get on her calendar?
Corporate:
I'll have to see, we have a board meeting in 2 weeks that has everyone busy in preparation for it
Startup:
Can you get some verbal indication from legal and your head of BU by next week, we can nail the details later but please get both to give a directional answer, we need to prioritize our resources accordingly, thanks.
Be brutally candid
What can you do, what can't you do.
What can they do, what can't they do (capabilities or approvals)
What do you really want, what do they really want?
90% of partnerships fail to become more than a signature on paper because people avoid hard conversations and just agree to vague terms
What can they do, what can't they do (capabilities or approvals)
What do you really want, what do they really want?
90% of partnerships fail to become more than a signature on paper because people avoid hard conversations and just agree to vague terms
KPIs / Metrics
Know how they'll measure success and tell them how you will too.
Don't have KPIs that partners can't share between them.
Don't have KPIs that partners can't share between them.
Accountability
Know who is personally responsible for turning a signature into actions.
Don't let the partnership agreement be the end result.
Don't let the partnership agreement be the end result.
Feedback
Raise the alarm at the first crack in the armor. Call out unhelpful behaviors or delays.
Don't wait until it's too late and momentum is gone.
Don't wait until it's too late and momentum is gone.
Share the wins
Celebrate together. You don't win at the expense of your partners, you win with your partner.
Don't even celebrate when you get a win that doesn't help them.
Don't even celebrate when you get a win that doesn't help them.
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