Brands have deep pockets and large customer bases that make them an attractive partner or customer for startups looking to gain market traction. A deal with a Fortune 500 brand can denote credibility and help validate a startup’s solution. However, courting these deals can become like finding water in a desert, the mirages are more frequent than the actual thing.
As a community manager for BrandGarage, I often hear founders tell me that they cannot afford to wait for months while a brand decides whether or not it wants to work with them. There is an urgency to startup life — a here today, gone tomorrow mentality — that pervades the way a startup does business. Funds are like grains of sand in an hourglass; you can feel the money draining with each moment. Add this to the fact that startups are often in the dark about why nothing is happening, and you have a cocktail of anxiety.
In some cases, the holdup for brands, whose organizational structure does not allow them to be fast moving like a startup, is wading through legal and procurement to simply set up the structure for the brand to work with the startup. Startups become frustrated and rescind their commitment; brands feel burned. It’s a lose-lose for both sides.
So how can you tell if a brand is serious in working with startups?
Here’s some advice from working with Sears on their journey courting startups.
- Look at previous commitments: If a brand is seriously courting startups it will not be the first time they’ve done so. Look at the brand’s history in engaging with startups. In Sears’s case, they’re holding a retail hackathon June 7-8 in NYC with $50K devoted to prizes alone; they held the same event last summer in San Francisco. Their continued contributions — personnel, time, financial resources — boister their commitment to working with startups and begin to a show a continued history of engagement.
- Know your brand champions: Organizations are not just faceless entities but composed of individuals who will hinder or help a startup’s effort to move forward in the corporate structure. If a brand is committed to working with startups it will need a champion to push initiatives through. They will also need to be senior enough to have clout within the organization. In Sears case, their champion is Andy Chu, Divisional Vice President, Mobile & Community Experiences.
- Understand the brand’s plan in working with startups: This task will often be the trickiest as brands do not publicly state their strategy. Sometimes you can find hints in press releases but business intelligence is best sourced through a trusted network. BrandGarage along with other entities like VC firms, accelerators, and incubators acts as an intermediary to help startups understand what brands are looking for. We’ve worked with Sears to articulate four business challenges for the Sears Retail Hackathon and laid out a framework for Sears to go to market with the winner.
What is your advice in working with big brands?