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Why You — and Your Customers — Need to Engage With Startups

Startup business

Ankur SrivastavaBy Ankur Srivastava

Pundits love to pontificate on “the demise of the CIO.” Honestly, these poor shmucks have been on the ropes for so long, the death watch has given rise to an entire industry feeding on scare tactics. No doubt a few of your CIO customers have slipped off to self-help seminars in hopes of networking, meeting recruiters and learning how they can save their jobs from the proverbial death by cloud, or just from the IT budget being given to the CMO.

I’ve been to a few of these conferences. The typical format is a panel of “experts” discussing how the CIO role is quickly fading — and how their product is going to breathe new life into a doomed career. Give me a break. Never happens.

Now, that doesn’t mean there’s no hope. In fact, as a channel professional who likely counts plenty of CIOs as customers and friends, you’re in an ideal position to coach them on how to revitalize their roles — and, in the process, increase your value. In this column I’ll make the case that being proactive about discovering new and innovative technologies can transform a CIO into not just a company leader but an industry maverick, and I’ll discuss how you as a channel professional can facilitate and benefit. The process is pretty straightforward.

1. Mentor a startup: It’s a leap of faith to spend money with an unproven vendor, arguably more so to add one to your line card. It’s much simpler to brush them off and look for a similar offering from an established supplier.

But ask yourself: As an industry decision-maker, do you understand the journey that startup went through to get to product stage? I bet you don’t. Check out this list of 10 hot channel-friendly startups, for example. Yes, you likely understand the problems they are looking to solve. But how did they get from that first line of code to seeking a partner or customer?

As many channel execs know, the journey of an entrepreneur is full of pitfalls. One of the largest struggles a tech startup faces is the dreaded task of finding a product market fit. You can help these companies bypass that headache. The payoff for you is a front row seat to the development and growth of the company, deep insight into the product and the ability to share feedback, maybe even shape the offering to what your customers need. Your CIO customers get the same benefits, plus great networking ops.

Here’s how:

  • Identify a space that you have little knowledge about, but wish you did — think bots, machine learning, Bitcoin, Blockchain, digital storefronts or security.
  • Identify a customer that might benefit from that technology.
  • Reach out to a VC, a media source or an independent firm, like my company, SwarmSales, and ask what startups are trending in this space. Note that a VC will most likely be biased toward its portfolio companies vs. industry best. We have visibility on companies based on their engagements with end clients.
  • Engage, not organizationally, but personally. Listen to the elevator pitch. Do a site visit and ask questions. Learn. You or a CIO can leverage a mentorship engagement document that allows you to set expectations, including not committing to a commercial purchase. The startup gets a better understanding of how a large enterprise functions or what a channel partner is looking for (believe me, they need the help) as well as how you typically make a decision or solve business problems. Email me at info@swarmsales.com and I will share a copy of the agreement with you.
  • Lastly, ask the startup to summarize how it would solve your customer’s problem and identify what resources they would leverage, as well as articulate to you the internal build process from their side.

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2. Co-build a product. What’s your response when a startup comes to you or a customer and makes a statement like, “We can displace Tableau, and we can do it for cheaper!”?

I can’t emphasize enough to the CEOs of emerging companies what a disastrous strategy that is. They might as well go ahead and say they have no idea how enterprises operate. Our advice to these companies is, instead of going to the market with a fully baked product, engage early. Ask to co-build a use case. There are several benefits to the CIO, the partner exec and the startup. It produces a real-life customer use case, not a hypothetical scenario. The startup is now solving a business problem for you on their dime, and if they are successful, they will have a referenceable client and enormous validation — which in return will help them raise capital, ramp up marketing, create a case study, work out the kinks in the product and be enterprise ready.

The main challenge that a CIO or partner faces is to make sure the use case you are helping the startup build is repeatable and scalable. This is where you need to make sure your moral compass is true and you’re truly helping solve an industry-wide problem.

3. Invite a startup to compete: “No one ever loses their job for picking IBM, Oracle or Microsoft.” Ever heard that saying? Actually that used to be true, but it’s no longer the case. As the big companies of the world struggle to catch up to trending initiatives in the market – cloud is a great example – they are generally behind in driving innovation.

Don’t believe me? Go invite one of the larger companies to participate in a discussion on your newfound area of expertise. They will throw the best industry experts your way, analysts with big titles who will come in and discuss the trend and the impetus behind what is driving this movement. But the truth is, they rarely have a productized approach that you can leverage out of the box.

Why? Most of them are waiting for those beleaguered enterprise CIOs to drive product demand and essentially co-build their solution. We often notice that emerging tech firms are way faster and better equipped to provide a productized approach and are agile enough to meet your requirements. So, next time you issue an RFP or an RFI, task your team to invite at least one emerging tech company to the bake-off.

Finally, think about the emerging trend of channel partners developing their own intellectual property. There are a ton of startups with great ideas that are perfect acquisition targets. It might be less expensive to acquire a company that is building a solution than to develop in house. I help with this sort of deal all the time.

Smart partners and CIOs are already keeping tabs on the startup scene. But formalizing the process, possibly making it a quarterly routine, makes you fundamentally stronger as a technology leaders and keeps your brand fresh.

Look, you have customer CIOs who wake up every day thinking only about how to keep the data-center lights on. Their days are probably numbered, and it might be time to make friends with that CMO. But those who want to embrace – no, lead – the change and truly drive innovation should look to startups. That’s where the next wave of market disruption is coming from. Ride it or get swamped by it. Your choice.

Agree? Disagree? Think there’s a startup strategy that I missed? Let me know in comments!

Ankur Srivastava is the CEO and co-founder of SwarmSales, a trusted global platform for targeted enterprise sales.


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