The swamy startupsandbigcompanies


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The swamy startupsandbigcompanies

  1. 1. DOING BUSINESS WITH LARGE COMPANIES @theswamy @angelprimeone
  2. 2. Challenges in dealing with large companies They don’t appreciate what I’ve done • I can’t find the right person in the organization • They just don’t get it -I have to keep running behind them • I keep travelling to Mumbai & Delhi – I can’t afford this Complex sales cycle & terms • They want a free pilot • They want exclusivity – without commitments • They want to brand it with their own name and sell it They don’t trust me • They want me to have 10 customers • They want me to have 2 crores of existing revenue • They want my source code They are a pain to deal with • They never pay on time • It’s a long sales cycle • They suddenly want to roll it out to 1000 field offices
  3. 3. Challenges in dealing with Small Companies My business needs are unique! • Startups provide simplistic solutions – no knowledge of our business • Small companies don’t follow-up in a professional manner • I have an approved vendor list Neat stuff but… • Their pricing model is unacceptable • I don’t want to pay to build their brand • What if this becomes big and I ignore it Who are these guys? • Will they be around? What if they go out of business? • How can I trust them with my customer data? • Assuming it works - can they scale to my 1000 field offices?
  4. 4. And Yet • Large Companies routinely do business with Small Companies very successfully • Small Companies do successful on the back of Large Companies How does this happen – is there a magic formula?
  5. 5. Most definitely YES! • You have to systematically address their perceived concerns • Deal with the Egos a little bit! • Because when you make it work – the pot of gold could be significant!
  6. 6. First ask yourself… Do I really need the large company as my customer to launch? Am I providing them a service or a product? Is my product going to create a revenue stream/differentiator for them? Is the product adding to their top line or bottom line or both? What do I have that is unique? No, its not price!
  7. 7. Let’s discuss some key topics • When & Who • Pricing & Exclusivity • Payments & Support • Newer approaches
  8. 8. When & Who? Find an upcoming star in the company • MUST be excited by what you are doing • Strong desire to make his mark internally • Company with a reputation and track record of innovating Get them involved VERY early • They must feel the ownership • They must be willing to stick their necks out for you • Get them to sign an NDA very early – why? Get to a quick pilot launch • If someone wants you to build the perfect product, you’re dealing with the wrong person • Has to be a paid pilot Make someone a hero – win their trust! • Its all about Ownership & Success! - don’t try to be sly and take all the credit • Don’t talk to the press about what you are doing • Don’t rush to other customers – but have a plan B
  9. 9. The Pricing/Exclusivity Challenge Free & Exclusive • I’m your first customer – helping define the product • I’m giving you access to my customers • I don’t want you to work with my competition Establish your point of view early • • • • Your success is important to them You are flexible about pricing but deserve fair value You’re open to discovering fair value Exclusivity is a two way street – what are you doing for me and how do we measure it • Be transparent with them – blame your board It has to be a partnership • I’ll give you a great deal no doubt – but it won’t be free since I need to pay the bills - let me see what best I can do recognizing that you are really a partner more than a customer
  10. 10. But will you be around? Have a clear plan on how you will capitalize the company • I will do XYZ, then raise capital • I have investors ready to fund me – but I’m waiting until we can validate a few things with you What if my competitor buys you out? • Source code escrow arrangement • Support obligations Never accept a Right of First Refusal on your contract • Nobody will buy you!
  11. 11. Payments & Collections Paid pilot – establishes the payment cycle • Proof that you have the right champion Establish the collections process early • Send the first invoice on time, even if for Rs. 100 Meet the purchasing guy early • Don’t wait expecting your business guy to work it outt Upfront payment that is adjusted towards future services
  12. 12. New Media & Approaches Leverage LinkedIn & Twitter • Find the right people • Research your customer well • Find the right person in the organization Consumerization of the enterprise • Launch products that people use • Works mostly for tools • Free trials – Fremium models
  13. 13. Questions?