Small-scale support is vital to get your startup off the ground, but how do you hit the big time? By Constance Freedman (Managing Director, Second Century Ventures Fund)
Your startup is killing it with friends, family and best partners, and now it’s time to expand the business to the rest of the world. For the next round of leads, you’ve hit up all your 1st and 2nd degree LinkedIn connections; your employees and their cousins, aunts and uncles have been approached and incentivized to help you grow. Organic growth is starting to flatline, and dammit you KNOW your product is perfect for your target customers – if only they would only listen!
Everyone loves the idea that startups provide the innovation to fuel growth for the economy, but that doesn’t mean they love the idea of partnering with or buying from a small, unproven company. As an early stage company, how do you get corporates to pay attention? How can you land major deals and keep landing them consistently? These are the constant nagging questions for every early stage entrepreneur. Here are a few tips that can help you find your way forward and prioritize your pipeline:
Hire One of Theirs
Scope out a strong business development hire who has the connections you dream about. Ideally, this would be someone from the industry you target your product towards – a person who knows the market and its players from experience and has a well-oiled network machine already in motion. This person will have the inside scoop and a known quantity, creating a better a chance that the target on the other end will take their call (or, better yet, they take your new hire to lunch!).
Seek Out Target Customers’ Innovation Labs
Innovation is back as a priority for corporate America. After years of “Wall Street vs Main Street” duels, corporates are willing and able to once again think ahead. Many of your corporate targets have innovation labs in one form or other that are looking for ways to break down the red tape keeping them from accepting ideas from outside. Many are proactively seeking ways to partner with young companies. These labs take several forms:
- Venture Arms and Growth Accelerators
The last few years have seen the growth of industry-focused strategic investment groups created to fuel innovation through aligned equity interests. For example, here at the National Association of Realtors®, our venture arm (Second Century Ventures), and Strategic Growth Accelerator, REach, were created to help early stage companies innovate for the $1T real estate industry and help them sell to one of the world’s largest SMB markets.
By helping real estate professionals better connect with clients, create more efficient transactions, and manage their $7B marketing spend, SCV and REach™ gives startups an insider’s view, establishes credibility, actively makes connections with potential customers, and grants exposure. Companies that went through REach saw their pipelines convert to sales and all had revenue growth between 100 and 2000%, have gone on to raise over $200 million capital, and expanded their beachheads into other verticals. And we’re not the only ones. The Blue Cross Blue Shield Venture fund and Healthbox Accelerator provide similar fast tracks for the healthcare market.
- Innovation Contests
Another way corporate America looks to tap into out-of-the-box thinking from startups is through contests that award winners a fast track into a company’s business development cycle (sometimes the runner-ups are invited, too). Recent examples include GE’s Innovation Quests to find new manufacturing and engineering designs; Netflix’s contest to improve its recommendation engine; and Realogy, the world’s largest real estate franchisor, holding a FWD summit for technology innovators to present to its brands, including Century21, Coldwell Banker, Better Homes and Gardens Real Estate, NRT and Sotheby's.
Persist, Persist, Persist
Corporations have many competing priorities. What’s on one manager’s plate today can easily be replaced by some competing priority tomorrow. If someone pushes your proposal aside even though they seemed excited, don’t be shy about using Outlook’s reminder tone to ping it back into view. Keep up the pinging. It will pay off.
And now a special word for women readers. Whether or not you believe that a woman playing the startup game has more challenges, the main thing is that you have to be part of the game to play it. Of the 200 or so applications we received for REach’s 2013 class last year, only two were from female entrepreneurs. Ladies, the first part of succeeding is showing up. Hire the best, apply to the programs that will help you get your pitch heard, and above all: persist, persist, persist!
Have you managed to attract corporate attention for your company? How?
About the blogger: Constance Freedman is the Managing Director of the Second Century Ventures Fund (SCV), the Vice President of Strategic Investments for NATIONAL ASSOCIATION OF REALTORS®, where she also assesses key strategic investment initiatives within NAR, and she is also the Managing Director of REach™.