5 Reasons Startups Win when Collaborating with Corporates

15.04.2018
Adir Zimerman, CEO and Co-Founder at SCREEMO | Reading time: 3 min.
As a startup, finding your first customers, the early adopters, that will test, validate and help you to iterate till perfection is hard. While the entrepreneurial instinct would say to start with a bottom-up approach beginning with small customers and working your way up to the top, I would like to recommend that you do the opposite - take a top-down approach and dance with the elephants, meaning cooperates and enterprises.

Here are 5 reasons why I chose this path that helped to take my company from an idea to a global startup working with Coca-Cola, Microsoft, Publicis, Walmart, and more.

1. Brand Validation
Having the backing of a well known and well-established corporate can give your startup greater perceived legitimacy for both potential investors and potential customers. With a large corporate customer or partner in your portfolio, you are signaling to the world that you have a product worth either adopting into an organization or worth paying for. It is effectively the best kind of customer endorsement that can and should be leveraged to create additional partnerships and deals.

2. Expanding your deal pipeline
Securing the first deal with a corporate creates the opportunity for many more deals. During your first project with the corporate, you’ll go through a legal and procurement process that will turn you into a listed vendor of the corporate. This provides you with a foot in the door to the decision makers, increasing the chances of signing additional deals. Here is why: every corporate is comprised of various different business units with each one owning a P&L and budget. From the startup's side, each business unit represents a different customer and different deals. From the corporates side, all the business units share the same legal and procurement department. Not only does this shorten the process for the startup when working on future deals but it validates the startup in the eyes of the business unit when they know that a different business unit within the organization is already working with that startup.Additionally, as executives move role both within the company and externally to alternative companies, if the partnership is a good and productive one, they will take you with them to these new units and companies, creating new opportunities.

3. Corporates are great early adopters
Corporate have plenty of resources and in most cases will have the ability and time to provide feedback on your product, which makes them strong early adopters. Additional resources mean that the corporate is able to allocate a larger team to work with the startup than a smaller business necessarily would, and the bigger the company the more personal it gets. This puts the startup on the receiving end of more personal time and attention from a larger number of corporate team members. With each team member being focused on a different aspect of the project and the partnership, this creates more opportunities for them to voice their much-needed feedback to the startup.

4. Access to resources and data
Working with a corporate can mean that there is an extensive pool of both resources and data that can be tapped into by the startup. As part of the project, you gain access to data that is relevant to the project, which enables the startup to gain further insights that help to improve their product. Resource-wise SCREEMO has been able to use office space owned by Coca-cola, Microsoft, Deutsche Telekom and Walmart for satellite teams that we have sent abroad saving us the cost of renting space.

5. Potential for long-term strategic partnership or M&A
With any cooperation between a corporate and a startup there comes the potential for both future strategic partnerships and/or an acquisition. Depending on how valuable the two entities feel they are to each other and the expected financial benefits for all parties involved, the partnership can evolve into a strategic partnership in the form of an investment plus mutual business activities, or into an M&A that turns the startup team and technology into an integral part of the organization.

With 45% of startups looking to sell to corporates and over three-quarters of corporate CEO’s regarding innovation as important to operational effectiveness, the startup/corporate partnership is the perfect combination. The yin to each other’s yang. The key is finding the right platform to create this cooperation. In my next article, I’ll talk about why I believe that corporate programs are the best platform for fostering and growing this partnership.

Adir Zimerman is a multicultural entrepreneur and a keynote speaker. He is the co-founder and CEO of SCREEMO. By implementing a unique enterprise sales approach Adir grew SCREEMO into a global company operating in North America, Europe and APAC with fortune 500 companies including: Walmart, Coca-Cola, Microsoft and more.