Most young companies dream about landing the big corporate client, like Margaret Martin has. She is founder at Atlanta augmented reality startup CN2, which has clients like Agco, AT&T, Coca-Cola, Panasonic, and many more. Getting the headlines and ramping up sales to get corporate leads is one thing--but managing a Fortune 500 relationship is yet another thing to learn, she and others shared at a recent event (video below.)
1. Set a budget
"There are a few strategies we've learned over time that create the best and most successful relationship," shares Geoff Wilson, founder at 352, an innovation team famous for creating successful software products for clients like Cox Communications, Microsoft and Morris Group International.
"It doesn't really matter what your innovation budget is--ten thousand or a hundred thousand--you need to set it before you talk to startups about solving the problem you've defined," says Margaret.
2. Spread the risk
Budget-setting is one way you address risk. Spreading the project among different stakeholders and phases is another. "It's critical to address risk for both the startup and the corporation," says Geoff. Using testing, learning and iterating, they have created compelling digital products for successful startups that were acquired, like Social News Desk, as well as corporate innovators.
His experience is there are two kinds of risk in startups working with corporations. One is your risk--your startup needs customer cash to survive. But the corporate innovator or sponsor of your project is also at risk. Their risk also feels like survival. Their bonuses, promotions, and relationships in the company can rise or fall significantly based on the outcome of this project.
"Don't dismiss the fact that on the other side, these are real people," says Alex Gonzalez, Managing Director at Creative Growth Ventures in Atlanta. "For them, which college their children can afford to attend and when they can retire is often riding on how well they set, and met, expectations. Just like you."
"Defining the bare minimum of what meets the smallest fraction of their need, and iterating from there with feedback, is the fastest -and also least risky--path to success," says Geoff.
Such a project or implementation may take months, or even years--but the reward is being able to roll out your product or serve across the entire global enterprise. "It took us a year and a half to even get in the door at GE," confirms Margaret. "It was worth it." She has often broken a project into multiple parts with multiple project owners in able to spread the risk around.
3. Own the execution
It can surprise startups to realize that sounding humble--or being what you call "very honest"-- can actually be a problem for your Fortune 500 potential client. That's because part of de-risking the engagement is projecting the confidence that you can do it. If you take on a corporate project and then end up backpedaling on the timeline or outcome, it can sound more like you are unsure than you are simply careful.
Robert Berris, VP Digital Strategy at 352, says, "Be confident that your team is laser focused on outcomes." It's outcomes that corporations are paying for, and your willingness to own the execution of something that's never been done before is a big reason why you got the opportunity.
Try some corporate projects for yourself
Margaret says, "Having a paying corporate client is more important than VC money or any other kind of investment. It's the best thing that can happen to a startup." By following these rules, you can have successful corporate clients, too. In fact, if you're interested in this approach, take a look at these real projects corporations are posting for startups to solve.