Guest Post by Benjamin Schwarzler
Benjamin is the founder CEO of Tablet Solutions., a startup in the area of industrial digitalization. We simplify and automate machinery and plant construction processes and develop mobile Apps which field engineers see essential for their work. Our clients are machinery and plants engineering companies, global leaders in their niche. Doppelmayr is our biggest client and helped us to get our startup off the ground.
What we learned from working with Doppelmayr Seilbahnen GmbH and others
Winning the first big client is a major step for a B2B startup. It might actually be the most important step as it makes the startup a real business. However, some startups tend to think that after winning a big client most of the work is done. They believe everything will go easy from there as the most important challenges are solved: Reputation will increase and it will improve the cash flow. Remember Ken Morse: “Cashflow is more important than your mother”?
We thought the same. But, although it really helps to win a major client, it’s not a destination, rather just the start. It is the start of something more difficult than winning the first client: keeping the client happy, working with their employees and delivering to their expectations (and beyond).
Difficulties in working with large corporations can arise from the fact that both parties have very high expectations to the collaboration, which do not always meet the reality. Expectations that we came across:
Expectations of big Corporations
- Startups can deliver magical things in no time.
- They have no internal costs and are a lot cheaper than other companies.
- They don’t care about work hours and are available 24/7.
Expectations of Startups
- We can easily disrupt the business of a large corporation.
- We don’t need experts, we just think out of the box.
- Money doesn’t matter to big corporations.
The expectations big corporations have towards startups are sometimes home made by the startup and result from awesome pitches and motivated “startuppers” during the sales process. Without saying that you should change your pitching strategy, it is important to think about what comes after you sealed the deal. Expectation management and choosing the right form of collaboration is key for a long lasting, successful relationship.
What does the ideal form of B2B cooperation look like?
Even though ambitious startups always try to score big from the beginning, we found it much more sustainable to start with a small pilot phase or proof of concept (PoC) before fully diving into the project. Ideally the pilot phase or PoC comes with a flat fee remuneration and gives some space to play.
This form of starting the collaboration has a couple of advantages:
- It allows early testing of ideas and ways of working together.
- It is a manageable investment for both sides and reduces the entry barrier for the large corporation.
- After the pilot phase the expectations are aligned and every party knows what to expect from the project.
- The project outcome and the path to success are defined from the beginning.
- The startup can plan based on a secure budget and the sales cycle is shorter.
Our collaboration with Doppelmayr started with a very small pilot project where we tested the actual needs and potential benefits in different departments. Most important for the project to even get started, was that we had support from the top management from day one. Before the first line of code was written we did an analysis and tested weather our idea resonates with the future users. Our work was project-based, but the client always understood the financial constraints of a startup and helped with some pre-financing.
Read more about the ideal form of cooperation here: 5 Steps To Successfully Collaborate With Startups
Reducing the entry barriers to get started
The biggest entry barrier for large corporations to working with startups is that they are unsure about what to expect. They are afraid that the startup might be gone after a year (with all the promised support and planed project extensions). Starting with a Proof of Concept reduces that barrier significantly, because it gives the startup the chance to show its skills and the big corporation can see how they work and gain trust in their ability to fulfill the promises. So, apart from making this the foundation of a long-lasting cooperation it is also a good sales strategy for startups.
Lessons learned from a B2B startup
The lessons we learned from being in the B2B Business as a startup are very similar to what Veit Blumschein (Founder of fromAtoB.com) presented at the Next14 conference in Berlin:
- Develop a detailed roadmap at the beginning of your project.
- Try to have one direct contact person (and only one) who is able to translate the language of startups into the language of large corporations and vice versa.
- Include buffer times in your planning.
- Set up regular meetings with decision makers on both sides.
- Always ask yourself about the hidden agenda of your counterpart and keep the implications in mind.
It is important that both parties understand the special needs of one another. Startups should understand the need for stability and reliability of large corporations and large corporations should give startups a chance and help them through the communication jungle of the corporate world. The key learnings for us are: Always include buffers in your planning and have regular meetings with the top management to align their goals with the project goals. This will help to make every project a success.Always include buffers in your planning and have regular meetings with the top management #Corporate #Innovation #Startup #B2B Click To Tweet
I am looking forward to hear your B2B Story. Please get in touch!