5 Ways to Avoid BD Pitfalls between Big Businesses and Startups

miscommunication

As SwitchPitch’s founder, my mission is to help big companies and startups get deals done. Throughout the process, we hear from both sides when they have successes and when they run into stumbling blocks. Often times those stumbling blocks come down to miscommunication.

Here are some examples of what big businesses say and what startups hear.

1. Big Business Says... “We’re launching a global innovation center.”
Startup Hears…”We’re getting plugged into their resources and ecosystem!”

Reality: Big companies do create innovation centers to foster, incubate and/or invest in new ideas, as well as attract small businesses with fresh ideas. But startups need to do homework to distinguish between an innovation center that is active and funded and has a real mission vs. one whose primary role is to create an image of innovation for the brand.”

2. Big Business Says… “We’re open to anything in terms of product and features.”
Startup Hears…”Our product is spot-on with their needs!”

Reality: Startups take this to mean their solutions are a direct hit with what the big business needs. Sometimes big businesses don’t know what they need or want. Sometimes they know but don’t or can’t share because the information is proprietary. By setting realistic expectations, big businesses can keep startups from leaping to the conclusion that it’s a wide-open situation for which they can deliver the perfect solution.

3. Big Business Says… “We’re really interested in your company.”
Startup Hears…“They see the value in what we’ve built and love the team!”

Reality: Startups take this to mean the big business understand the impact of what they’ve built when in actuality there’s a good chance it’s the startup’s founder and co-founder they want. “Acquihires,” when startups are acquired more for their innovative talent than their product, are becoming more common as a way for big companies to get an infusion of innovative DNA.

4. Big Business Says…“Our engineers can’t seem to build what you’ve got.”
Startup Hears….”Innovation just isn’t in their DNA.”

Reality: The big company may be running out of time waiting for the internal R&D or a product team to deliver. This is where a startup can fill the fast need. Or the large business may be close to launching and wants to see what else is out there in terms of features and value—to help spur their internal folks to make the product even better.

5. Big Business Says…Nothing for 2 months.
Startup Hears…”Maybe we should go ahead and build those features they mentioned.”

Reality: This is a tough one, because nothing drives startups crazier than radio silence—especially after they think they’ve garnered good traction. While priorities may have shifted internally, keeping in touch will keep the startup from moving on. In other cases it is simply time to move on. If the big company resurfaces, great. But the reality is that startups—like big companies—need to have multiple irons in the fire.

The Bottom Line

Big companies – try to keep the lines of communication with startups open. You play a critical role in sponsoring and spurring the innovations about which they are so passionate—and on which much of our economy depends.

Do you have examples of typical miscommunications between startups and big businesses? We’d love to see them—just use the “Comments” field below.

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