About a month back, I found myself at the OnRamp Insurance Conference at Chicago's Soldier Field. The event, well-organized by Midwest accelerator Gener8tor, brought together startups (Davids) and incumbents (Goliaths) from across the insurance industry. Like everyone else there, I was present to learn and network, all while trying to lay off my phone.
Between meetings, I caught a panel titled Corporate / Startup Chemistry that immediately caught my attention. As a former anthropology major, I'm endlessly fascinated with the interactions between these two tribes. (Great "field school", btw, watching entrepreneurs and executives cautiously sniffing each other out and figuring out if they should team, fight, or flee.)
Back to the panel: A sharp VC by the name of Hans Morris, Managing Director of Nyca Partners in Manhattan, dropped some "tribal knowledge" on the room that found me head-nodding in violent agreement. Hans' quick, punchy list of "The only 5 startups that have a CHANCE at enterprise adoption" took him only about 20 seconds to recite. After finding myself repeating these 5 conditions to several startups and corporations alike over the past few weeks, I figured I'd do my part to help evangelize them, and perhaps expound a bit. (Thanks kindly for the rocket fuel Hans!)
To Have a CHANCE at Enterprise Adoption:
1. You satisfy a mandatory regulation
aka: "The government is making them do this."
At home, my wife Barb and I tell our kids that they have to knock out their "need to do's" before they're allowed to pursue their "want to do's". Sure buddy: You can play your iPad for a little bit after your homework is done. Sure baby: You can have some ice cream after you finish your carrots. The essential precedes the optional.
Likewise: If your offering helps a company with their "need to do's" (i.e., compliance), you've already got their attention. Too many B2B startups focus on sweetening their UI/UX, forgetting that they'll have a much better odds selling a plain ol' essential "carrot" than an optional "dessert".
2. You provide a competitive imperative
aka: "Their competitors are making them do this."
Attention tends to go to the innovators. The rule-breakers. The crazy companies who think different. And it by all rights, it should. Geoffrey Moore, however, in his book "Crossing the Chasm", teaches us that the great majority of established firms are not themselves terribly innovative. They're content to lag behind a bit and let some other hardy soul take all the arrows. If you think about it, a good 50% of established companies are, by definition, behind the curve.
In my experience, most startups are hired (or acquired) by incumbents not because they provide an innovative (i.e., New & Better) capability, but because they bring the incumbent closer to parity with their competitors. To wit: GM's $1B acquisition of autonomous driving startup Cruise.
3. You fit into an existing long term company initiative
aka: "They already do this."
So many startups seek to impose their philosophical will on their customers. The B2B startup graveyard is littered with the business plans of arrogant CEO's who sought to change the way people work.
Pro-tip: People dislike change. No one wants to be disrupted. Especially at work. Disruption at work is... disruptive. And typically not tolerated for very long.
Rather: Position your offering as a constructive accelerant to work that's already being done. Show how your tool fits seamlessly into their existing workflow, only better/faster/cheaper/stronger. Gold star awarded if you can make existing chunks of work disappear entirely through automation.
4. A senior exec cares deeply about your solution on a personal level
aka: "Their boss is making them do this."
Ahh... Ye olde pet project. This one is far from rocket science: If you or your product/service happens to have the positive attention of the big boss, you're in for a lot less red tape, and a much better time. Case in point: One of my portfolio companies, found itself rather "stuck" trying to sell HR software to mid-level HR staff with low-level pain tolerance (see #3 above) and even lower-level spend authority. Per the sage advice of a fellow board member, we redeveloped the sales strategy to focus instead on C-Levels, developing an elevating, board-room-relevant message around "winning the war for talent."
Voila: Sales ensued.
In retrospect, this feels somewhat obvious, but in the thick of the hunt, we couldn't see the forest through those trees. Remember: Even at the biggest companies, you don't work with the company; you work with people at the company. Work to find resonance with the top dogs wherever you can. Nothing helps lift quite like a tailwind courtesy of the C-Suite.
5. You provide immediate ROI and a roadmap to a scaled solution down the road
aka: "They find value today, and a gateway to tomorrow."
I used to work in technology R&D, where my beloved team of freaks and geeks had an all-out rivalry to out-innovate one another. My buddy Joe built Google Glass 10 years before Google. Another team built one of the earliest Internet of Things platforms... for vineyards in Napa. One dude built a talking house plant. (True story.)
Beside all the clatter and claptrap were my friends and mentors Charles and Kishore, building a sort of Slack-before-Slack for distributed teams that was "merely very useful." I'd think to myself: What's so innovative about that? Where's the AI? The Augmented Reality? The Analytics? It took me a few years' hindsight to realize that they saw something the rest of didn't: Utility eats Novelty for Breakfast.
Charles & Kishore's "merely very useful" invention was immediately picked up by our offshore delivery teams, and designed in a clear-headed way that found it scaling to become the global collaboration standard across our 300,000 person company.
They weren't worried about out-innovating anyone.
They were too busy being entrepreneurs.