How to win with corporates

I have always held a strong belief in the outsize value of strategic partnerships. And I must confess it has been a frustrating pain to be part of and watch a lot of good intentions end in absolutely nothing.

I am by no means alone with that experience. In fact I think it’s fair to say that it’s more the rule than the exception that these partnerships between corporates and startups don’t work. The excitement at signing is almost inversely related to the feeling of frustration and banging your head against the wall, once the partnership has to be implemented to start delivering on all the promises.

But it can be done. One startup, I have worked with over the last few months, has managed to get to a winning formula, and I thought I wanted to take this opportunity to share some of my learnings from it in the hope that you might use them to improve your own prospects with getting a great return on your strategic partnerships.

The first thing to consider is whether or not what you’re doing solves a real pain that the corporate has. Yes, we all know that big corporations can struggle with innovation, but that’s not where the real potential lies. Due to the law of big numbers, it makes much more of a dent in the corporate structure, if you can help them sell more or what they are already selling.

In essence that means that if you have something that makes the corporates product better in itself or provides leads for more sales of their existing product by giving their sales people cloud cover to reengage with their customers with something new and exciting, you could have something that is very valuable to a strategic partnership. But you need to have it mapped out beforehand in order to put yourself in the strongest possible position for identifying the right partner and do the hard negotiations.

If you succeed in coming up with a partnership, the hard work truly starts. A lot of startups mistakenly think that it’s all about teaching the corporate to adapt to their more lean and efficient way of doing things, but I honestly don’t think that’s the case. What I see working is in fact more the opposite; that the more you can factor in how they work in your own process and be open, transparent and accountable about it, the easier it will be for the corporate to integrate you and your product in their offering – which is essentially the only recipe for commercial success with a corporate.

Finally, you need to ensure that incentives are aligned. No matter what the corporate might tell you, its a matter of fact that they are ruled by objectives. That also means that key stakeholders bonus plans are tied to objectives, and they will do whatever they can to succeed with those in order to get bonuses and promotions. Nothing else will really be touched. So be damn sure you understand their objectives, their KPIs and bonus targets, and do whatever you can to slot into that in the simplest possible way. Make it super easy for them to engage – the less they have to think about it the better – and you’ll be in a good position to achieve success.

Does all of the above mean that you always need to dance to the corporates tune? Well, if you want to succeed with a strategic partnership centered around marketing and sales with a big corporate, I think the answer is yes. The balance of power isn’t in your favor, and the only thing you get from insisting you’re equals is…nothing. Then it’s much better to just eat humble pie, focus on the end goal of making things work and making a solid profit. And then stick to the formula.

That should enable you to consider frustrations over failed strategic partnerships a thing of the past.

(Photo by krakenimages on Unsplash)

The complexity trap

One of the great privileges of my job is that I get to meet a lot of different startups and their founder teams and hear about their ideas, and how they have the ambition to take on the world and conquer it.

Among these great people are also seasoned veterans trying to turn great insights into new startups with, based on pure logic, really interesting potential, but who still seem to struggle raising the necessary funding to take off. And when I come across them, I wonder why it is that they struggle, when everything else seems to check out?

Of course there can be an element of timing. They can be too early for the risk profile, an investor has, or they can be doing their work outside the field of interest to the investor. That all makes a ton of sense. But I think there is something much more fundamental at play.

When I look at what make investors tick, it is things that either cater directly to the particular interests or experience of the investor in question or just seems like a super easy sell in the pitch deck; a story which everybody can understand and relate to.

Let’s face it: As investors we look at a lot of different pitch decks, and I think it’s fair to say that it’s easier to remember and get excited about those with a really compelling, easy-to-understand story that seems like something you have heard about before, than it is connecting to a complex pain and an even more complex solution for something, you have little personal relationship with.

Remember, investors are not experts in everything. Some aren’t even experts in anything except investing (which is also an essential skill, to be sure). And they are not particular fond of being put in a position, where they are reminded of all the things that they don’t know.

When that happens, the lack of insight by experience translate directly to a feeling of increased risk, and instead of getting into a complex discussion, it’s just easier and less painless for the investor to say ‘No’ before the discussion move too far.

And it makes a ton of sense too. Because when you look at startups trying to solve complex problems for complex customers, there is a myriad of questions presenting themselves:

How will you position the product towards the customers? How will you engage in the dialogue and show that you can be of value? How will you onboard users? How will you make them stay? How will you facilitate the necessary changes to the way the customer works in day-to-day operations in order to have the full impact of your product (if it’s a B2B related product, of course) etc. etc.

There are just so many complex moving parts that it more than compensates for any great team or idea. Because as an investor you know that a lot of things have to go the right way in order for this startup to be truly successful. And we are generally not looking for cases where a lot of factors align in the right way, before the startups, we invest in, can become successful.

It’s perhaps a bit brutal and to some extend a crying shame. And the obvious risk of it all is of course that brilliant startups founded on the ‘wrong’ complex pain and solution won’t get the funding they need and thus won’t be able to have an impact on the world and ultimately be successful.

But I just think it’s collateral damage to the way that a lot of investing in startups happen; unless you’re lucky and you have that influential person on the investor side, who has insights gained through experience and just knows that the solution has real merit, you as a founder can have a hard time of getting your startup funded.

So, in essence, the best piece of advice, I can give you, if you’re a founder with a less compelling ‘simple’ story to sell is to really spend time on finding investors – angels, VCs – whatever who has the hands-on background and experience that will make them truly see the potential in what you’re doing and sign off to help you achieve your vision.

Because for complex solutions to complex issues you not only need investment – you also need real hands-on help making it happen.

(Photo by Timo Volz on Unsplash)

The corporate talent gift

In the startup environment it is not uncommon to frown upon people with experience from the corporate world. They are either too old, too conservative, to0 expensive or just too corporate to make it in the startup world.

But is this really true? I don’t think so.

In fact I think the right corporate profile is a gift to any startup. Why? Because corporate profiles with an interest in startups often come with two attributes, you could easily slot into the team.

First of all, if they are interested in startups, they’re likely to be more entrepreneurial than most corporate profiles in their approach to getting things done. They will likely have years of experience navigating opposition all around them from the big incumbents and with that also experience in how to get things done despite serious adversity.

That experience is gold for your startup.

Second, they are also likely to know a lot about spotting and managing risk. Everybody knows that in corporate life, the riskiest path to choose is the one challenging the norms. And unless your ambition is a fast forced exit, you will need to manage that and perform in order to stay alive in the organization. That takes some serious risk mitigation and sometimes even almost near death-experiences.

That experience is crucial to your startup.

Having said that there is one type of corporate profile that you should probably be wary off joining your team:

The one whose main motivation is a big personal payday courtesy of your startup.

While they may be willing to work hard at achieving it, having financial compensation as a sole major motivation can backfire. Because corporate profiles with that motivation will tend to do what serves their own needs and career progressions best, and that might not necessarily be what’s in your or your startups best interest.

So be on the lookout for that and be very aware of doing your personal due diligence, when you consider onboarding a profile like that for a specific role.

Other than that, just go for the corporate experience. Look at it this way: Many of these people are talents that big corporates have essentially paid to ‘educate’ to get the experience that your startup will benefit from.

That’s an awesome deal way too good to just keep lying around.

(Photo by Hunters Race on Unsplash)

The ‘know all’ fallacy

Some of the most charismatic and persuasive people I have ever met have also been the ones who have been the most convinced that they had it all figured out and knew everything.

Until they didn’t.

I am not suggesting that they all failed. But a good number of them did. Because they thought they ‘knew’, ventured ahead without taking stock of what was going on around them – and ultimately hit a concrete wall.

Besides the pain of that particular experience, the most painful thing was that it could most likely have been avoided by adopting a very different approach.

A learning approach, if you will.

When you adapt a learning approach you are more humble.

You’re able to take more signals in.

You are more aware that you’re not directing the world, the world is directing your opportunities, and you adapt.

Adaption is key here. The world changes and you need to do that too in order to be forward looking.

‘Knowing it all’ is inherently backward looking. And not very useful when things fundamentally change.

When you learn and adapt, you are able to seize new opportunities and with that the odds of success increases.

Which again makes it pretty stupid to insist on being the one ‘knowing it all’, don’t you think?

(Photo by Joao Tzanno on Unsplash)

An age perspective

“You’re just too old!”

I hear it thrown around every once in a while. Not specifically at me but more as a general shoutout to voice dissatisfaction that someone simply just not ‘get it’.

But does age really have anything to do with it?

Of course not.

In fact I think quite the opposite is at play;

Using the age argument is like arguing “This time is different” about why something that was a bust in the past will be a success now or “We have the best tech” as a reason for why you’re going to win whenever you enter the market:

High risk arguments with little validity in data.

So if the “You’re too old” argument is a flawed one in itself, what can we use the difference in age for in an extended startup team?

Well, for one youth can be put to superb use – if applied with clear thought – towards something that other people might not think is possible doing. Because the big advantage to a lack of experience is that you don’t know what you’re entering into, and thus you’re more open to risk.

Just think at the warm stove the first time you touched it, because you didn’t really believe that it was too hot. You only did that once, right? And got the hard earned experience.

Youth also typically have an abundance of energy of the sort that comes with eagerness to get out in the world and do something and – for most – a basic lack of other substantial obligations (family, kids, mortgages etc).

So what does age bring to the table that could be fruitful to the young ones?

First of all experience. Not of the kind that stops great ideas in their tracks but the kind that helps the young guns avoid the most obvious pitfalls, so they can stear clear and get a cleaner path towards ultimate success. A kind of a mentor that gently guides without taking over control in any sort of way.

Second, a shoulder to cry on. Now, I do not necessarily mean that literally, although if that’s what’s needed, so be it. No, I mean it more in the sense of someone to talk to and seek support at when the going gets rough, nothing works out, the roof is falling in and you’re just generally feeling like an utter failure.

Because that’s exactly what you need at that point; someone you can went to – and be heard, respected and understood by someone who has most likely been there her-/himself.

So think of these things the next time you feel the urge to claim that people who don’t get you are just “Too old”.

(Photo by Paolo Bendandion Unsplash)

Time is (also) an investment

The other day I had the pleasure of meeting a mentee of mine, who is enrolled in DTUs board education.

The topic of our conversation?

“How do I qualify myself to go on boards of startups?”

The question is a good one. Because you need to bring something to the table in order to be relevant. Especially with the diverse needs and ever changing nature of a startup.

But then he followed up with an admission:

“I am not an investor.”

Wrong!

He is an investor. His capital? Experience, know-how – and time.

We often have a tendency to see money as the only type of investment. But I would argue that in an environment rich on capital at close to zero interest, there may be other types of investment that is worth just as much – sometimes perhaps even more.

Experience, know-how – and time.

After all, many of those who are offering their service to be on boards to help startups are people with years, perhaps even decades, of relevant experience. And depending on the need of the specific startup, they will be in a position to help the founders leapfrog their competition by getting sound advice and concrete action.

Because action is the only real differentiator. And this is where the investment of time comes into play. While giving advice may be good in itself, what makes the real difference is turning up your sleeves and get busy working alongside the team.

The right board members with the relevant experience can and should do this. And when they do they will be more than an investor;

They will have the potential to become an invaluable contributor.

(Photo: Pixabay.com)

Circle kind of complete

One of the things, others can never take away from you is your past experience(s).

They are completely yours. Yours to cherish. Yours to curse. Yours to learn from. Yours to channel into something new.

I have often wondered why things happen. Why do you meet the people, you do? Why do you get the job offers you do? Why do you end up with the career, you do? Is it all part of a plan or does it just happen.

I am mostly in the latter camp. There is no connection between what I imagined myself doing 25 years ago and what I ended up doing and the places I went to work.

Until now.

Because as I am working hard to build a strong set of foundations for our new medtech startup, some of my past experiences are coming back into play. Experiences I didn’t know what I could use for back then, but where it has become blatantly obvious, how I can bring them to bear now.

I am not a big believer in anything except what I can see, hear, feel, taste and smell. But to the extend there is something more out there, I am enclined to say that right about now it is starting to dawn on me, why I did the things I did during my career;

Why I spent time working for the Danish Diabetes Foundation as my very first job fresh out of journalism school.

Why I spent time doing licensing and R&D deals for Microsoft Business Solutions.

Why I spent time in business management at Microsoft.

Why I spent a lot of time doing recruiting and getting both the team, roles and culture right at Berlingske Digital.

And so on. And so on.

The only thing I knew 25 years back – and before – was that one day I wanted to try to create something new that could benefit a lot of people.

Fast forward to today, and I am trying to follow up on that passion using the wealth of experiences, I gained over the years. I wouldn’t say the circle is being completed, but it sort of feels like that.

(Photo: Pixabay.com)

5 learnings from HelloFresh

Recently I made a commitment to try different products and services out in order to try and get a better understanding of what it is the best consumer-focused digital companies do that make them so successful.

My starting point was HelloFresh which just recently launched in Denmark.

Monday I got my first shipment from HelloFresh; 3 meals for the week priced at ~130 DKK per meal for 4 people. And these are my first 3 learnings from HelloFresh:

(1) It’s fresh ingredients. I know the point is banal but it needs to be made because it’s important – especially with such a brand name.

(2) HelloFresh operates with a “Zero Waste” promise, and it is easy to see why; everything is sorted for the various means in neat recyclable paper bags, and the measurements of ingredients are exactly what’s needed to cook the meal – no more, no less. When you’re done there’s nothing left – food nor packaging – and thus the promise is kept. Check.

(3) Besides being totally measured most things are clearly branded “HelloFresh” signalling that someone has gone the extra mile in execution of ensuring that things are what they are promised to be and in the quantities needed. It gives a nice touch of care and attention to detail and ensures that both brand and the brand promise is present from start to finish.

(4) With the food NOT being pre-prepped you still get to enjoy the process of cooking even if it’s super easy. It’s quite different from something you just need to heat, and I think being able to add that little extra touch and having some sort of control is super important. Convenience goes a long way but only such a long way. You’re part of the product and process, and in that way it gets under your skin and helps build preference. Pretty clever.

(5) Even though the introduction offer is 30 % of normal price, at 130DKK per meal there is more than enough tangible value in the kit in order to make it attractive. I mean, try to go to the super market and buy groceries for a 4 person meal in Denmark for 130 DKK (or even 170 DKK) with EVERYTHING (except salt, pepper and oil, but you get my point), and you will often come up short. The point: Even if the individual recipe fails or something goes wrong, the value of the offering compared to the alternatives are still there making the offer trending towards a no-brainer to at least try out.

These are just the first few thoughts. I fully realize that it sounds like a glowing endorsement, and maybe it also is. I am just positively surprised by the sheer completeness of the offering in both product, messaging, packaging and everything.

There seems to be no stones left unturned here. Which I guess is the truly inspiring part.

(Photo: Private)