There has never been a better time for a startup to knock on the proverbial door of a large organization. The pressure of continuous disruption and global market challenges make it an ideal time for minnows to partner with whales. Big businesses offer scale while startups offer access to new innovative ideas. With that as preamble, here are 5 immutable big business laws each startup should be aware of:
1. The law of time: You'll need a lot of it.
Estimate how long your sales cycle is to big business. Take that number. Double it. Take that number. And triple it (you get the idea).
Lance LeMay, principal at Open Air Equity Partners and lead investor at eRecycling, tells a story of approaching a mobile telecom CEO with a solution that would save the organization more than $100 million. The mobile CEO loved the idea and endorsed the program. Then it took two full years to implement. In retail, whether it's Whole Foods or Walmart, getting permanent distribution can take a year depending on the when the category is being reviewed. Dana Anderson, senior VP of Marketing Strategy and Communications at Mondelz International put it this way: "Minnows often underestimate the process and time it takes to become a partner to a big client. Remember to be patient and stay focused." The implication? It takes time to move mountains. Make sure to set proper expectations with your shareholders and more important, your finances--your cash flow.
2. The law of language: Learn to decipher "the code."
When I ran corporate marketing at Sprint, we would give new vendor pitches a verbal "sandwich" that went something like this: "Your presentation was so interesting, but our budgets are tight now, maybe we can connect in six months?" The startup is doing a high five down the elevator as the head of sales calls to update the forecast (note: if this is you, please go back and re-read law #1). Here's the reality: my colleagues and I were just trying the most polite way to get the vendor to leave as fast as possible. Claude Alldridge, co-founder of wearable tech startup Trellie, experienced the "big brand sandwich" multiple times. His solution? Claude would periodically send his big business prospects consumer insights he had observed in the market. This led to a meeting to review the consumer data (at the request of the brand), which led to (you guessed it) further discussion about his product. Implication: sometimes it's wise to stop selling and focus on developing the relationship.
3. The backbone rule: Have one.
No matter what they say, it's hard to respect a doormat. Giant Media co-founder David Segura has made it his mission to change his company's sales culture. He says, "My biggest challenge--and opportunity--is training our sales team that (deals) are easy ways for the client to say 'yes' but often don't translate into long-term relationships down the road." He adds, "We have a great product (video services). We need to start with the premise that it's good enough without the shortcuts." At CannesLions, Dana Anderson, marketing chief of Mondelz International, spoke and essentially echoed Segura's sentiment from the Whales point of view. "You have to say 'no' to us. To bad assignments and freakish things your whale will ask you to do," she said. Anderson recounts a conversation with Michael Ventura, founder and CEO of Sub Rosa, who says, "The truth is an underrated tactic." Implication: Whales like (and respect) a backbone. So at the next sales meeting, be conscious of your spinal alignment.
4. House law: There is always more than one way to get into a house beyond the front door.
Before Google bought electronic couponing company Zave Networks, the company struggled to land a major retailer. Traditional buyer meetings were going nowhere, so the CEO decided to find an alternate route. He called on the CFO and changed his pitch from customer benefit story to one that was ROI-driven: his solution could save the company millions of dollars by eliminating paper coupons. Aydin Mirzee, co-founder and co-CEO of Chide.it says it well: "As a general rule, the product should not be pitched to just one person." In big companies, there are often multiple people who come together to make a decision. Implication: Customize your value proposition to the audience and understand that you can still get a "yes" from a division after someone from another function told you "no."
5. IQ law: Yourjob is to make the whale smarter.
Don't underestimate whales. They are insanely smart, went to good schools and get access to the best research and conferences out there. But they're also insulated. Jason Houseworth, president of global digital tax solutions at H&R Block, says, "I look for innovative partners and service providers to share experiences that cross business verticals that I can apply to my business. Don't walk in selling your solution, bring insights that help make my team smarter." Startups live in an ecosystem filled with new ideas and fresh approaches to existing problems. Don't underestimate the knowledge you have to offer. Implication: Don't sell yourself short. Take your knowledge and customize your comments in way that's relevant to the audience.
There is never been a better time for whales to swim side-by-side with minnows. Says Anderson "What sets you (the minnow) apart is your personality and your unique point of view."
At the end of the day, passion, persistence and patience--but above all passion--will help you win in the market place.