Monday, March 17, 2008

Size matters, but experience is what counts

Two of the three startups I’ve worked at have had large enterprises as customers. SNOCAP, the one that didn’t sell to large enterprises, partnered with them (e.g. the major record labels). Large companies tend to be leery of small startups, especially when they trust them to perform a critical service or rely on them for something that is highly visible. This puts us, the startup vendor, in the position of having to jump through hoops to show our maturity and prove that we are worthy of the business, and that doing business with us does not pose a significant risk to the corporation’s operation or brand. In this familiar situation, we have to make up for limited human resources with maturity and professionalism at every point where we interact with the client. A combination of limited resources and rookie behavior is the kiss of death to a startup trying to compete for a Fortune 500 deal.

An important thing to consider is the difference between experience and size. Early stage startups are small, but not necessarily lacking in experience. As a startup, it’s important to deeply understand all the functions that must be performed to successfully run your business, and then boil them down to their essence and perform them with a very small team. That need tells you something about the makeup of your early stage team. It also helps guide your interaction with your customers, since they are trying to determine whether your maturity is proportional to your size.

One thing I try to keep in mind when dealing with a large prospective customer is that even the biggest corporation is made up of individuals, and these individuals are the same size as we are. In other words, we have to prove ourselves to the people with whom we directly interact, not some faceless corporate entity. You win a corporation’s trust one person at a time.

Post a Comment