Tips for Startups: Interacting with Large Corporations more Effectively
This is the first in a three-part series on how startups can interact with large corporations more effectively.
Are you a startup looking for co-development opportunities? More and better distribution channels? Acquisition opportunities and successful exit? Essentially, are you looking to join forces with a large company?
Here’s the next question: do you know the best way to approach, interact with, and get to deal with large corporations?
As technology consultants, we at yet2 have extensive experience facilitating innovation at Fortune 500 companies – those same companies who could be co-development partners, global distribution channels, potential acquiring organizations, or partners in other ways.
We work directly with corporations to help them identify, vet, and connect with entrepreneurs, startups and/or universities. Some of our clients don’t always have the experience to know how to work with startups – they may demand too much information, too much time, or inadvertently extinguish innovation with their legal red tape and corporate hurdles.
On the flip side, many startups don’t know how to work with or even pitch large companies. Pitching to a large company is vastly different than pitching to a venture capitalist since they have very different goals. For example, many large companies know their market segment very well and don’t need extensive background on a market or technology, unlike pitches made to some venture capitalists.
At yet2, we’ve facilitated thousands of introductions for more than 20 years and have learned how to help startups put their best foot forward. We’ve broken these tips into a short three-part series:
- Do your homework.
- Optimize your meeting.
- Make sure they remember you.
Part I: Do your homework
We can’t emphasize enough the need to adequately prepare for a meeting with a large company. Some recommendations we make might seem obvious, but we’ve seen many startups lose opportunities due to inadequate preparation.
These types of meetings may give you the chance to pitch to decision-makers who could hold the key to strategic and large partnership opportunities. We’re not promising that these meetings are all going to lead to a golden goose, but it’s vital to prepare in case they do. How should you prepare? Start here:
Understand the end goal
When preparing for a pitch with a large company, asking questions beforehand is your strongest tool. For one thing, don’t assume you know what the company is looking for. They may be looking to enter another market by partnering with a startup or trying to solve an internal problem with your technology. They will ask different questions depending on which of these scenarios they are considering.
If a third-party consultancy like yet2 wants to set up an introductory call, or a large company reaches out directly to you, ask them what they’re trying to accomplish. What problem would you, the startup, be solving for them? What types of partnership opportunities are they seeking? Ask them for the criteria you’ll be judged against (if there is one), especially if it is for an event like a pitch day where you are being compared to other technologies or solutions. There is no guarantee your questions will all be answered, but any information you gain will help you be better prepared for the meeting.
For example, yet2 was facilitating an open innovation tour for a global consumer healthcare organization on the topic of allergy relief. We sent the startup a brief about our client, the attendees, the particular technology our clients were interested in discussing, and the specific type of partnership opportunities of interest. At the time, the startup didn’t ask any follow-up questions and we later understood that they didn’t take our advice into consideration. They created a pitch for co-branding/distribution of the existing product when the corporate company was more interested in co-developing a new product to be commercialized under their global brand. This disconnect during the conversation led to frustration on both sides, and the startup was not prepared to answer the company’s questions since they had not thought of that business model. Needless to say, the startup did not progress to the next stages of conversations.
Know your audience.
This is the key to optimizing your presentation. If you know who (or at least which division of the organization) is attending, then you can make sure you have the right people from your team at the meeting.
Ask the meeting coordinator for attendees’ names and titles. Research their job responsibilities on LinkedIn (you can even do that in incognito mode). Aside from using LinkedIn, or in case you can’t find much information, titles in corporations will usually tell you which department the attendee belongs to (marketing, R&D, regulatory, legal, open innovation (OI), etc.). If the majority of the people you will be speaking to are in the R&D department, this usually means you should spend the majority of the time talking about the science behind your technology. In this case, make sure to pull in a technical person from your team. You would also need to consider how open you are for earlier stage partnership opportunities like co-developing a product.
For example, in one introductory call we facilitated for a client, a startup didn’t have their technical lead present. When our client’s R&D department asked about the penetration rate of the bioactives in biological membranes, the startup’s representative had to ask to postpone the call – losing our client’s momentum and a possible deal.
We also recommend you research the company you’ll be speaking to – do they have separate and distinct brands? Which countries are they in? Who are their customers? Be familiar with them, prepare your presentation accordingly, and bring the right team members to present based on the audience.
Send your presentation in advance
At yet2, for Innovation Tours or Pitch Days, we ask startups for their presentation material in advance. Here are a couple of reasons why:
- It forces the startup to prepare in advance.
- It saves time if there’s equipment failure during the teleconference.
- We screen for confidential information. If the meeting is a non-confidential introduction, we ask that the startup send only non-confidential material. To protect our clients, and the startup’s information, we screen presentation material in advance of the meeting.
- Some companies like to prepare for the meeting by looking through the presentation and preparing questions ahead of time.
Unfortunately, we’ve seen a lot of misses in this area. One time, a startup refused to send the presentation in advance despite yet2’s recommendations. When the video-sharing went down in the middle of their presentation, they lost around 10 minutes in their 30-minute time slot to troubleshoot the video-sharing platform. They then emailed the slides to us so that we could distribute them. Ultimately, this startup didn’t advance because they didn’t have enough time to delve into the details of their comparative value proposition (which I’ll talk about more on part 2 of this series) and distinguish themselves.
This is certainly not a comprehensive checklist of what you should do, but rather some main points to help you prepare for a meeting with a large corporation, and to allow you to take your startup to the next growth stage.
Remember, if the company asks you to give a presentation, they are putting their time – not just asking for yours.
Next time I’ll be talking about how you can optimize the time during your meeting. If you have any other themes you would like me to write about, please send me your ideas to firstname.lastname@example.org!