THE CHALLENGE:
So, you've come up with the coolest solution to a problem ever! You run out and start a company - small co., build your tool and begin selling it to demonstrate traction to your seed investors. Small co. is nimble, so you don't mind making adjustments to your product and are even willing to pivot if it will demonstrate strong product/market fit. Yet for all the hoops you are willing to undergo, getting BIG Co. to consider your solution seems like an insurmountable challenge. Don't worry, no need to pack it up and call it quits. This blog entry describes some of your biggest obstacles when trying to approach big companies and what you can do to better manage them.
THE STORY:
In a nutshell, large companies don't like risk. This is ever more evident in industries that are highly regulated such as energy, finance and health care. My background is in health care so my examples will have a health care IT twist; however, the issues described in this article are applicable for most large companies regardless of industry.
Back to risk. Think about it, your startup is tiny compared to the big company you are trying to approach. This matters because BIG Co.'s journey to success, like yours will hopefully be, occurred through a series of failures and successes that culminated in a well-established firm that has a tried and true value proposition with a brand and reputation worth protecting.
Here's where you come in. You have a great tool, it solves a big enough problem, and that makes you worth being considered by BIG Co. But your solution is new, and the unintended consequence for using your approach, product, or combination is unknown or at least not well understood. So even though you may have the coolest solution since sliced bread, putting BIG Co.'s brand and reputation at risk for a solution that may potentially alienate hard earned customers is not attractive to senior leadership.
Specifically, before you approach large companies with any product or service, you should have thoughtful answers to the following questions:
Does your solution overlap or replicate functionality already available in Big Co's portfolio of solutions? If so why should your solution be added to the list?
Can your solution work seamlessly with other products through pre-built interfaces or APIs?
Does the value or benefit offered by your solution, either strategically or financially, exceed the security risks associated with introducing your solution?
Will your solution require effort from an already overworked in-house team?
Who will pay for your solution?
What assurances do you and small co.offer BIG Co. in being able to deliver?
These points are by no means exhaustive, but they do represent the first line of questioning that, if not adequately addressed, will lead to reasons why a large company may choose not to consider you as a solutions provider. Take for example the, "who pays" question. As a CIO, I have personally experienced departments leaders agreeing on the value of a solution, but not feeling they should pay for it. Some leaders claim an unbalanced value proposition for one department over another and think they should contribute less. Other leaders believe that since the solution supports everyone, central administration should take on the cost. Whatever the position, when these issues are not addressed, you can bet your sale will never move forward or at least be delayed.
THE SOLUTION:
While the situation sounds discouraging, there are many approaches to addressing BIG Co.'s risk barriers. To start with, your attitude will go a long way. If you haven't done so already, re-align your thinking. Nobody's out to get small co. They just want to protect BIG Co. So, start thinking of it the same way. Your company's goal should be to offer a solution that addresses a pain point while trying to make Big Co. look good every step of the way. Believe me, if BIG Co. looks good, so will small co. If BIG Co. looks bad, Accenture, Deloitte, or another big consulting firm will look good after cleaning up your mess and no one will have ever heard of small co.
So now that you've adjusted your perspective, here are a few other ideas that can help make it easier to develop a relationship with your enterprise prospect.
Know your competition. Nothing will take the air out of your party balloons faster than starting your product pitch followed by your client assertively telling you, "we already have a solution for that". This may seem obvious but its more complicated than you think. Your solution may do something unique, but may also offer features that many other vendors offer. It’s not surprising if they categorize you as doing the same thing. For example, our company Aprenda Systems offers a master provide management solution that is often thought of as a credentialing solution. Trying to pitch something that is new to the market is difficult to message. We offer a tool that helps the entire organization maintain accurate and timely provider data and addresses various institutional needs, yet our clients gravitate toward the utility of the data they are most familiar with. In our case its credentialing.
Interoperability needs to be a foundation of your product design. In health care, Fast Healthcare Interoperability Resources (FHIR), HL-7s REST API is all the rage, meanwhile the rest of the world has been maturing its use of REST APIs since 2000. If you can't connect your data with other systems you can't say you have a product. Its a prototype at best and definitely not something I would have paid for as a CIO.
Make sure your solution follows industry security best practices. While I don't know what problem your solution addresses and the sensitivity of the data you are managing, follow industry security best practices. If you've built a technology that offers a web login, make sure your servers are patched regularly, you have properly configured SSL certificates, your software has access control lists to limit what users have access to and work with very competent technologists that can hold their ground with a corporate security department. There are many free sites that can test your site and determine if you have properly configured servers and certificates. My favorite is SSL Labs (https://www.ssllabs.com/ssltest/). You can take the URL from you login page, or that of a competitor, and have the site run a test. Please test your site before meeting with an IT department. If you have deficiencies, get your server admin and app developer to address them. At the very least know what needs to be addressed and be able to inform your client that you are aware of the issues and are working on the fix.
Know how to manage a client engagement and implementation. Yes, you're a genius for building a better mouse trap for that long standing problem, but don't underestimate how quickly things fall apart if your clients are unhappy with a lack of communication or a poor implementation process. This topic is beyond the scope of this blog entry so we won't go into details, but keep in mind a few points. First, maintain a regular cadence with your customer. While you may be your own boss at small co., your customer has a boss to report to, so when they are asked how things are going they want to be prepared. Next, make sure your client knows what resources BIG Co. needs to bring to the table to make the project a success. Many projects fail as a result of poor coordination by all the relevant stakeholders. Finally, when things go wrong, and believe me they sometimes go wrong, work with your client to co-develop a remediation strategy. Involving them as part of the solution shows you are a true leader and helps you maintain good will. By making your client part of the solution, they are more committed to your success. When you go rogue and your remediation strategy is not inclusive, your customer is unaware of your reasons for taking the approach you chose and can't defend you even if the want to.
Start with a limited roll out. As I mentioned earlier, BIG Co. can't afford to have an enterprise rollout that messes up the entire organization. Identify a business owner in a department that is feeling the pain you solution addresses. Start there and demonstrate your solution's effectiveness, easy of use, ease of implementation, low cost, etc. If your solution works as good as you promote it, BIG Co. will want to roll it out everywhere.
Offer it for free for a limited time. Sometimes not having to pay for it is what will get large companies to try out your product. Its not that they can't afford it. Often, the cost of your product or service has not been included in the current year's budget. Other times, there is internal resistance in trying something new and your customer can use the free trail as a carrot to manage the internal politics. Just make sure the trial period has an end date or you will find that you've transformed small co. into free co., have a portfolio of pilots that never convert to paying customers and create concerns with your investors.
Your team is your biggest asset. Assembling a high performing team is the single most important thing you can do. The best ideas will fail if you don't have the right people to bring them to life. Marginal ideas sometimes succeed because a great team can execute well. Since your business doesn't have a long history of success stories to draw from, you'll need to leverage your personal experiences and that of your team to demonstrate competence. You need to develop trust with your client. Remember, trust is built on benevolence, ethics and competence. I make a point of this because coming across as deficient in any of these areas could set a red flag for your would be customer and kill the deal before it starts. Finally, as talented as you may be, don't go it alone. I don't know of any large company that wants to risk the success of any relevant initiative on one person that can get hit by the proverbial bus. If that isn't enough to convince you, recognize that even Steve Jobs had Steve Wozniak and Bill Gates had Paul Allen.