Revenue

How do you get a large corp to entertain an idea or proposal from a small startup with no revenue to add a new revenue stream to their existing business?

Raj Gill Adding Value to Big Brands

February 21st, 2017

How do you get a large corp to entertain an idea or proposal from a small startup with no revenue to add a new revenue stream to their existing business?

Pankaj Agarwal

Last updated on March 5th, 2017

That's a chicken and egg situation. Most large corp goes by brand name and industry wide acceptance. You just need 1 big client to get many more but it's very difficult to just get that first one. You can literally offer free POC and try your luck.


That said, being a startup you should not only aim at large corp but also look at new players in that field and try to get them as clients and start a revenue stream. You'll have real numbers after that rather then a estimate generated based on a hypothesis. Most of these startup(s) any ways get acquired by large corps and that's one easy way to survive until then and get that association at that point.

Hamzah Kattan

Last updated on March 4th, 2017

Hi Raj,


In terms of risk, 3 main questions comes to mind:


1. Is this established organization still stuck in the traditional incumbents mode where they are just defending their core (in singular) business model or have they demonstrated at least interest in managing a dynamic portfolio of business models? This is not the same as having multiple revenue stream from the same business, but rather managing multiple products or brands. If that's not the case, then run by their decision makers McKinsey's work on the 3 horizons of innovation so that they open up to the idea. In my opinion, there is little point otherwise in pursuing an opportunity with a partner that isn't willing to explore / deviate from their core business, even if the new revenue stream will be an extension to their existing product. It's just a bad sign.


2. Speaking about the 3 horizons of innovation, does this established organization already have "horizon 3" type of expertise or processes? Your main pitch could well be that you are augmenting them by filling in that gap, where you can work along and champion the project until it gets to a stage where the project has been validated and needs to be handed-off or rolled-back into the organization in order to tap into their "execution" or "optimization" oriented expertise.


3. Does your startup offer a unique benefit that makes it a logical partner along that journey? That could be expertise in a relevant field or market that the established organization lacks.


It' only after answering these 3 questions favorably that I would recommend working on how to get a foot into the door. Also you might want to look into case studies of successful "Open Innovation" adaptation by established organization.


Hope this helps & best of luck.

-Hamzah

RMD

March 4th, 2017

Raj,


I’ve been successful in selling small business tech to large companies. Hopefully some of my “lessons-learned” will help you.


The biggest mistake, and one that I see small companies make over and over again, is to lead with the product/service – the faster, better, cheaper presentation. That is NOT how large companies buy. Heck, that’s not even how individuals make personal purchase decisions!


They key is that you need understand THEIR view – generally referred to as the view from the buy side. For a large company, the product is only one parameter in a purchase decision. They are also concerned with training new staff, or retraining the existing staff, required process or policy adjustments, necessary code changes to their existing software (very difficult obstacle to overcome), on-going maintenance, the size of your company (therefore its capacity to help when something goes wrong), and whether or not you’ll be in business a year after they make the purchase. In other words, your arguments should focus on their COST for your product and not the PRICE you are asking.


You should pay special attention to the latter. As a new-comer with limited staff and resources, you are asking someone in the large company to stick their necks out for you, and risk their credibility, bonus, or worst, their job.


How you overcome these depends on what you are selling. If your product is in the customer-facing, operational box, you’ll have an uphill battle. If your product is in the analytical or internal process space (e.g., marketing analysis, project management, etc), you can easily carve out a small piece to prove the value and hope to build on that success.


In my experience, the easiest way to get actionable insights is to run a small focus group. That means you’ve done your homework and have identified the right persons in the organization that will influence the purchase, and those who can authorize it. Once you do that, for under a couple of thousand dollars you can pull together a focus group, where you can give a very short presentation, then listen, listen, and LISTEN. In my experience, you’ll walk away with a lot of information that help you understand the customer's decision-making process and pressure points. You can then that data to create a realistic sales plan, collateral, and communications strategy.


Note that the key to success of a focus group is not the number of people, but having the right people. That takes work, but it is the work you’ll eventually do – either by design or because lack of sales forces you.


If you can’t afford the cost of surveys and the focus group, you can take a guess at who the influencers and decision-makers for your product are, then try to have individual conversations on the phone or via email. Not the most effective way of approaching this problem but it will at least get you moving in the right direction.


Finally, don’t let this process get you down. You are living the “good old days” of your future success. Enjoy the ride.


Happy hunting!

Leslie Wolfe Founder - ThunderAccess.com ... WhaleOfAnIdea.net

March 12th, 2017

One method is to offer the initial client your services for free. Prove your worth! Use them as an example, assuming of course the result is positive. Again, if you can PROVE your the company to do business with, there's much better chance of success.

Odama Eguma i am man who always want to make the world better

March 6th, 2017

the key is just to create credibility with every single chance you get.i like to start from the bottom and work my way up...start from the small business,build your experience and confidence and then try the big shots

Sequoian

March 6th, 2017

Raj.


How much time you have to waste on it. I see this highly impossible but you have some time to spend lobbying for it you can try. Large companies have lot os things to worry about (a) is this something they want (b) how does their brand perception change (c) How much liability they take on board by offering this (d) what do they do if you fail to deliver or your business goes belly up etc...


the odds are heavily stacked against you but if you are convinced no harm in trying but donot pin you hopes on it

Kayihura Able I'm inteligent,self employed with small enterprise

March 7th, 2017


Its like hide and seen game. In most cases branding of production speaks loudly and there followed by marketing and quality of the product because you can't moved from small enterprise to abig enterprise with poor quality produce.