For startups, acquiring large corporate customers and partners is critical to scale. It can mark the difference between rapid and far-reaching success, or the great idea that just never quite took flight.
But the challenge that most startups face in forging these relationships is in standing out against the hundreds of new and ambitious companies vying for the same corporate dollar and expertise every year.
To cut through the noise and grab the attention of these large entities, startups must take a strategic approach. At RedGrid, we secured partnerships with big business ranging from Energy Australia to Spotless and Monash University within our first year.
We did this by focusing on seven key practices.
1. Be targeted
Acquiring a large corporate client isn’t just about building relationships with the C-suite. It’s about targeting the right people at the right point in time.
A corporate whose job title includes the word ‘innovation’ (or similar) is likely to be most receptive to your disruptive business idea — and to act as an internal advocate. However, while it can be easy to get caught up in his or her enthusiasm, this person will not necessarily be a key decision-maker around whether or not the company invests.
As you initiate businesses development opportunities, it is important to strategically survey the landscape within an organisation to understand who your business proposition is most relevant to, who has access to and control over the budget, and who you collectively need to get on board in order for your deal to get over the line.
2. Speak their language
As entrepreneurs, we can get unashamedly carried away with our grand vision for the future. But it is important to keep your communication grounded in direct value — whether that’s steeped in profitability, resilience or sustainability for the company you’re speaking to — and to stick to solid projections.
How does what you’re offering align with the business’ recent initiatives? How does it affect the KPIs and expectations of the individual you’re speaking to? How can it be positioned as a viable sell to their boss?
The extension of this is to ensure you have someone in your team, or a close advisor, who has significant experience in partnerships and stakeholder management. An in-depth understanding and ability to negotiate corporate deals effectively is vital to creating a mutually respectful and productive relationship.
3. Be everywhere, be loud
Ideally, the people you are pitching to will have already heard of you before you approach them.
Almost all large organisations sponsor innovation initiatives, accelerators, pitch events and conferences. The opportunities to speak in front of these audiences are aplenty, and I would encourage all entrepreneurs to seek them out and put on a show. They are a worthy forum to tell your story directly, without the heavy-handedness of a pitch or sales meeting.
At RedGrid, we often invite prospective partners and collaborators to our speaking engagements, to start building reputational trust and understanding early on.
4. Be brave enough to charge
As an early-stage company trying to make a name for yourself among industry incumbents, it can be tempting to seek out unpaid pilot projects as a way to prove value, and close deals faster.
The problem with this approach is that if there is no dollar value attached to your work, it can create the perception that it has no value, and set unsustainable expectations for the future.
For these reasons, I strongly advise that you never falter on charging for your time and expertise. By attaching value to the project, you’ll find that you are taken more seriously and that corporate deals progress faster.
5. Keep talking to your champions
Never underestimate the power of your early advocates. Make sure you continue to take them on your journey — even if you aren’t working together currently.
Catch up regularly, invite them to your events, give them the heads up on any exciting news before it is publicly released, and do what you can to keep them involved with your mission. The support of these individuals can provide access to new networks of influence, critical resources and the all-important faith in your idea that will help you to maintain momentum.
6. Realise that success is a long game
Fast-paced startups require quick decision-making, adaptability and a culture of reaping opportunities as they arise. However, not all large organisations work this way.
There are multiple processes and layers of the business that projects must go through before they are signed off. And, even once a project is approved, it is unlikely to commence immediately and the timeline will probably be much longer than you’re used to.
This can be dangerous for startups which bank on a big deal delivering immediately. ‘Death by pilot’ is commonplace, where startups rely on the revenue generated from a sole project, but by the time the deal is finalised, the work commenced and payment settled, the startup dies due to a lack of resources.
To combat this, I would suggest having multiple deals active at a time, so your success isn’t reliant on a single revenue stream. Also, keep a steady pipeline of new client opportunities to build resilience into your operating model.
7. Remember, it’s a two-way street
Entrepreneurs are fundamentally important to our economic and social ecosystems — providing the new innovation through which we can efficiently (and profitably) tackle some of our nation’s most pressing issues.
While large corporations offer much value through their immense resources and established brand equity, startups offer that critical out-of-the-box thinking which can arguably be stifled in big business. In short, our disruptive solutions, met with their critical funding, makes for a mutually beneficial arrangement.
You can help keep SmartCompany free for everyone to read
Small and medium businesses and startups have never needed credible, independent journalism and information more than now.
That’s our job at SmartCompany: to keep you informed with the news, interviews and analysis you need to manage your way through this unprecedented crisis.
Now, there’s a way you can help us keep doing this: by becoming a SmartCompany Supporter.
Even a small contribution will help us to keep doing the journalism that keeps Australia’s entrepreneurs informed.
And it’s not all one-way traffic either. SmartCompany Super Supporters get to dial into our monthly editor’s meeting and attend a monthly, invite-only webinar with a big-name entrepreneur.