In a previous post – Considerations for Healthcare Entrepreneurs Thinking About Corporate Venture Capital – I shared some information gleaned from last week’s Reverse Pitch Day (RPD) event held at the Cambia Grove – a hard to define ‘accelerator-incubator-innovation-startup space-support hub’ located in Seattle, WA.
This post shares some information from the RPD event on the types of relationships entrepreneurs might have with a corporate enterprise and some considerations that entrepreneurs looking to develop a solid, long-term relationship with corporate enterprises should keep in mind.
Note: Much of that presented in this post was culled from Reverse Pitch Day presentation found here on YouTube. It’s a long recording and, if nothing else, I recommend listening to the 14 minute section starting at 6:11 and ending at 20:11.
What Type of Relationships Can Entrepreneurs Have with a Corporate Enterprise?
Engaging with a large corporate enterprise is very different from the engagement typical of a business-to-consumer (B2C) business relationship. To help entrepreneurs better understand some of the benefits and challenges of engaging with a corporate enterprise, the first presenter at the Cambia Grove Reverse Pitch Day event shared some insight into some considerations for building relationships with corporate enterprises.
Questions to Help Define Your Relationship
1. What type of relationship do you actually truly want to pursue and build with a large enterprise? There are multiple ways an entrepreneur can view a corporate enterprise: Customer? Advisor? Investor? Commercialization partner? Design partner? All of the these?
2. One specific avenue is to view them as your potential long-term customer. Is the enterprise one of many potential organizations you want to build a relationship? Or is it one that you want to really build your business off of foundationally? Or is there some sort of other relationship you’re trying to build?
3. Do you view a specific senior executive within the enterprise as potentially an advisor or potentially even a leader of your company?
There’s a way to build an enterprise partnership beyond simply viewing them as just a customer; where you as the entrepreneur have the opportunity to build an alliance and build domain expertise knowledge from having that alliance.
4. Do you view this enterprise partner potentially as a commercialization partner, realizing the fact that large enterprise often times have very key strategic relationships with other large enterprises. If you’re able to align with this large enterprise, they could provide you with business development support to get you into other enterprises, if the incentives are aligned.
5. Do you view them as a specific investor? Many enterprises consider the opportunity to invest in a startup as a way to build mutual value. Many enterprises have their own Corporate VC arm.
Perhaps you want a combination of the corporate enterprise being both a customer and investor, for them to have a little bit of skin in the game, for them to provide you with business development opportunities, for them to basically provide you the connections that you need as a start-up to grow.
6. Do you view them as sort of your design partner? Are you still at a very early stage in your company where you’re looking to sort of MVP your product, have the opportunity to test it out with real customers and see if it actually can really build traction?
7. Or do you really view it as everything: do you want to just go in and just do the full gamut?
Developing Relationships with Corporate Enterprises
In order for an entrepreneur to build an official and effective relationship with a corporate enterprise, the entrepreneur needs to understand his or her ‘origin’ and have a clear plan on how to approach the corporate enterprise.
Whether the ‘entrepreneurial startup’ was created and incubated from within the corporate enterprise (i.e. Intrapreneur) or is an unrelated, external party (entrepreneur) influences the approach and boundaries for developing a business relationship.
In a previous post on the RPD event I shared some information about considerations for ‘Internal Intrapreneurs’ vs. External Entrepreneurs
Note: The RPD presentation included several slides that are shown in the recording but are hard to read. Accordingly they’re not included in this post.
Are you seeking a potential enterprise client as an external customer investor or are you looking to leverage their resources in order to scale and grow from within? There’s multiple ways you can think about it and there’s not one specific track that you have to take but you really have to choose a pathway and then pursue that pathway. It’s much more effective and much quicker and you’ll save you a lot of time and effort versus trying to feel it out before you begin that relationship.
Are you seeking a revenue regenerating opportunity or are you seeking a funding opportunity. The opportunity you are seeking is going to affect the type of conversations that you’re going to have. It’s going to affect the type of stakeholder internal champion that you’re going to have. If you’re not a 100% sure it could become much more difficult or you can find yourself spinning in the business development cycle.
More Coming Soon
In my next and final post I’ll share more information from the Reverse Pitch Day event for entrepreneurs considering developing a formal business relationship with large corporate enterprises. I’ll try to hunt down the presentation materials and see if I can include some of the graphics. In the meantime, consider following me on Twitter where I share information about healthcare data, technology and services – among other topics.