Author: David De Chambrier – Account Executive at Voyage Control
I have, and always will, work for companies that are referred to by everyone as ‘startups’. Much like the vast majority of individuals of my generation, I am excited by the disruption and innovation that a new breed of internet businesses brings to ‘old school’ industries such as financial services, real estate or logistics.
The problem of these industries is that they are, often, still led by large players that are slower to adopt innovation mostly due to their size and slow bureaucratic decision making process.
But one of the biggest challenges I have encountered, and have read about in large business environments, is what a close friend Sia Houchangnia and I have termed the ‘mouse and elephant challenge’
“or rather, how large corporations are fearful of small companies.”
Here, Pliny the Elder in his Naturalis Historia book theorised about Musophobia, or more specifically the idea that an elephant might be scared of mice. Is this a real theory or just a myth? I cannot tell as I am not zoologist…
Personally, I favour another approach, one highlighted by Walt Disney in the picture below and drawn out in the infamous cartoon, Dumbo.
What has this got to do with large enterprise sales?
In large enterprise sales, the lean startup model is much harder to apply if you want to prove that there is a gap in the existing industry. Having deep industry expertise and an established network can accelerate your time to market but an MVP will probably not be sufficient; you will need a product that is much more developed. Keep in mind, that given the scale of the client , any innovative initiative will have a significant impact.
Getting your first significant enterprise client is hard; one that is large and credible enough in your industry, and at the same time agrees upon the fact that your product fits their need.
Entering a competition an incubator or simply leveraging your own network might help however I suggest none of them are enough. Winning a prize might make you a prouder and bigger mouse but this on its own will not make “jump” off a cliff .
As a startup you will need to identify a lead that could accept playing the role of a “sandbox”. In our case, at Voyage Control, our first major client in London has been really helpful (and still is) in the development process of our product, and they have the market resonance we needed in the exhibition industry.
One other example of a large corporate that has developed a successful model of internal innovation is Goldman Sachs. Alongside it’s 77 investments in tech startups in the past 2,5 years, among which include Dropbox, Spotify and Uber, Goldman also trust and willingly integrate some of the technologies they are investing in back into their own infrastructure. One of their investments, Kensho, has been invited onto a trading floor for two weeks to hack into the Goldman’s existing systems.
As mentioned by bloomberg’s article “Goldman in ventureland” : “By headcount, tech is now the biggest division inside Goldman; it has more software engineers and developers than bankers and traders, and they can even play a role in shaping Goldman’s business”
Even if this was a marketing gimmick, it is a position that more incumbents should adopt. Pursue innovation, give an access to your own resources and don’t be scared to deploy in a sandbox environment.
Most large players have widespread trust issues, which is understandable; they are scared of losing or weakening their dominant position in the market. What will happen if the startup goes bust? Who will support the product? How serious is the team? Why should I be the first one to integrate the solution? If none of my competitors are using it, I probably don’t need it.
To counter those fears some founders will try to fake being a large company with a rock solid product. Although bluffing could be seen as useful, it can be dangerous, especially if you do not have the means to back it up. If you fail delivering on what you have promised and consequently lose your client trust, it will be impossible to recover. Failing a large player may have dramatic consequences when it will start resonate in the industry.
To conclude I would say that from my personal experience, the best answer to counter the doubt and acquire trust is the use of transparency.
Thanks to one of the Seedcamp mentoring sessions, I’ve had the chance to listen to Joel Gascoigne, founder at Buffer, his approach to transparency is a game changer and must read on their company blog.
Once a lead is interested, be transparent in respect to the evolution of your products statu. Do not fear discussing your roadmap and demonstrate that, although you are small, you have a great ability to react to their needs. If you want to go one step further to prove your trustworthiness then be open with your costs and pricing. Explain to your client that out of the £10,000 contract they are about to sign, nothing will be turned into profit, it will be reinvested into enhancing the service, R&D, customisations…
Show them your ambition, deliver the big picture, where you want to go, sell your product the same way you sell to an investor, make them dream the way you dream.
I would love to see mice and elephants work hand in hand to define the future of the industries that impact billions of people worldwide
This is just a small bite of cheese — an idea that needs further development and one that I will explore in greater detail in future posts.