Under the pressure and hope of closing a large corporation as a client, many startups will put up with providing resources they do not have to do a proof of concept (POC) that does not make sense. And, rarely, will they see an iota of money in return.
There is, however, a good chance of doing good and real business with corporations and often it starts with a Pilot. There is a great deal of difference between a POC and a Pilot and it is important we understand the terms to set the expectations for future collaborations.
A POC proves the solution works technically and is often a disposable side project, the absolute result often being a dusty report on the corner of the CIO’s desk. Rarely, is it the beginning of a long term partnership.
In this situation, instead of opening the eyes of the giants, educating them in the new ways of doing things, the startup downgrades its initial value to offer a simple commodity. This can only be the beginning of a frustrating relationship for both parties: the giant will quickly decide that they can do things better in-house or with one of their existing vendors simply because the Request For Proposal (RFP) they have written with their own internal (and limited) skills leaves no room for innovation and vision. The startup, under the pressure of winning new clients, tries to fit in by filling out the RFP poorly when in reality, they should be rewriting the whole thing.
A pilot, however, is inspired by the startup and its value proposition. It is, by definition, the realisation of a set of success criteria commonly agreed upon between the startup and the corporation to meet a concrete use case solving a business pain. The pilot shall then be governed by defined KPIs and measured ROI with executives involvement. It is a valued and paid project, a smaller version of the larger deployment, defined by a perimeter that will build the internal confidence needed to extend the program.
So, how do you put yourself in a pilot situation rather than a POC when working with the enterprise?
Corporations are excited about startups, they will open their welcoming arms to you and even invite you to pitch to their innovation day. Do it! It might give you some visibility and you might win an award. However, the chances of closing a deal from such an invitation are slim and here’s why:
Perception: You are part of the kids club. You are not established, you are invited to boost energy and creativity with your brilliant minds and bright ideas.
Audience: Rarely is it composed of the operational people that need you. Unfortunately, your pitch will unlikely resonate, even if your value proposition is amazing.
No use case: Your pitch will be too general, you are not attaching yourself to the functional and business pains, which means your pitch will be made of benefits making you appear as a nice to have.
Change the perception: Show that you are established, do not pitch your solution, talk about your vision, teach them where to go with success stories from other companies you have worked with.
Target your audience and persona: Research the web, ask your partners and investors about the corporation and understand their problems and how you can address them. Read the annual report, the press, get as much information including personas you should target. Be relevant.
Write the use cases: Do this with the operational people by meeting them frequently, understanding their issues, digging into the business impact and educate them on the path you can provide for them.
If you’ve done your homework, you know what your ideal customer profile looks like. Anyone that is remotely outside of your criteria may divert you from your ideal match. If a large corporation is calling on your door, don’t let them qualify you, instead, qualify if you are a match and why you should invest your time and resources with them: Do they have problems or are they browsing? Have they set up their mind on what they are looking for? Can you address their issues? Are the people contacting you part of a group that can actually move the project forward or are they analysts doing some research?
As Dave Reynolds mentioned in his May 15th article, the relationship between startups and corporations is a work in progress. Nevertheless, it is the responsibility of the startups to lead the way with the corporations – with the same for the lead with innovation- by never compromising on their vision. This will not only avoid R&D confusion, burning unnecessary cash and resources but also contribute to educating the giants to a new and positive way to modernise.
Caroline Franczia is the founder of Uppercut First. Experienced in working for large companies such as Oracle, Computer Associates, and BMC, Caroline also lived in Silicon Valley for four years before moving to startups (Sprinklr, Datadog, Confluent) where she witnessed on the ground the benefits of a well-thought sales strategy. These are the foundations of UF: a structure that accompanies the European startups in their sales strategy by giving them an undeniable advantage in their go-to-market.