How to Land a Big Corporate as Your 1st Client
Many startups would like to win a powerful and prestigious first client that will help them jump start their development. Let’s have a look at the advantages and potential challenges of going after big corporates and see what is necessary to succeed here.
Why hunt for the big fish?
- With a big corporate you can potentially win bigger volume in sales revenues – more users mean more license fees. With one deal you may leap-frog your company tremendously.
- A big name on your customer list can also help to attract other customers and even get special attention from investors: „If startup X has managed to convince such a big corporate, there must be something going for it.“ Working with a big name works as a quality stamp on your business case and your team.
- Another aspect of a corporate as partner may be the business support they can offer in terms of access to customers, infrastructure support, or expert advice. If played well, your startup can tap into a market that otherwise you would not have been able to access.
We have some examples of successful collaboration with startups, e.g. with Katia for the call spam filter, with MycoSolutions for the protection of our telephone pols or with Livingdocs that help us make manage our content on Bluewin more efficiently.
However, when trying to collaborate with corporates successfully, there are some things to pay attention to:
- Selling to a big company often times means sales cycles that are not only much longer but can also be very complex: Initially, you may not talk to the person who actually has the budget. However, this person may be able to refer you to the project team. Then they do a test, and another test and write a proposal… be prepared that it may take longer than you think.
- Winning a big customer often times means to focus a lot of attention onto one entity. This can pose a cluster risk to your company: If this one contract goes south, you go south. When focusing on one big potential customer, make sure that you don’t neglect some of the other opportunities out there.
- Also, the requirements of a corporate could be very specific, e.g., they need the solution to run in their environment or are willing to pay for an extra feature that no-one else can use. Some of these extra efforts have the potential to lead to new products while other efforts cannot be re-used and therefore may distract the startup. I’ve even seen a startup that pivoted towards the corporate’s use case while neglecting their core value proposition. So keep sight of your core value proposition all the time.
When is the best time to reach out?
I have analyzed some of Swisscom’s startup collaboration projects to understand why it sometimes takes around 18 month to start with a pilot project. I have found factors that lie in the startup and causes coming from the corporate:
- Corporate structures: Sometimes it takes longer than expected to move from initial interest to project because a corporate like Swisscom has decision processes, budgets and legacy that all take their time. What seems long for a startup (e.g., 12 months) feels like the blink of an eye from the corporate perspective.
- On the other hand, I have identified the maturity of the startups as a crucial factor. When the startup is still in its very early stages, the likelihood of winning a corporate is low. Why? The team will not able to deliver to the scale / quality that a corporate would need. Two guys with a prototype will need around 18 months before their software will be able to secure the network of a big organization.
There seems to be a chicken-and-egg-problem with regards to the timing. On the one hand, it would be great to start a collaboration as early as possible. However, the likelihood of success of the project is much higher when the startup has everything in place to deliver the solution.
A couple of dos and don’ts
When reaching out to a corporate, I suggest you
- Try to solve a problem for the corporate, so come with a specific pitch instead of a generic investor presentation. I received a pitch of an IoT company a couple of weeks ago that outlined how they would leverage our Lora-Network and drive additional revenues for Swisscom. That is a good example of a pitch that caught my attention as it was relevant for our M2M unit.
- Come when you are ready to deliver – have a product or even revenues, not just slideware. A working prototype of a gadget doesn´t mean that you have the production, logistic and service organisation in place that you need to produce and sell thousands of pieces.
- Finding the right person to talk to will be crucial. It can sometimes be difficult to find this person because the structure of the organisation is not fully transparent to the outside world. Use the corporate website and social media to do your research before and reach out to someone.
If you need help finding the right person in Swisscom I am happy to help!
Follow me on Twitter & Instagram @pennyschiffer.