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What is your advice on partnering with a major company?

Is it true that early stage startups are partnering with major corporations like IBM, Samsung, Dell, yahoo, etc.?

Or is this an urban myth? If it’s true, what should a startup do to get this type of partner? What should they watch out for?

 

 

 

  • It depends on how you solve their problem / fit into their ecosystem. Anyone can say they are partnering with a big corp, but is it a light-touch partnership (easy to get sign-off) or deep integration (long sales cycle)?

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  • A lot of these deals either involve connected investors or founders who have previously worked at those large companies. In those cases it’s a LOT easier to get your stuff in because there is credibility.

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  • Many of these companies are running incubators, accelerators and outreach programmes with office space and similar things.

    For example, this is Dell for entrepreneurs – http://eir.dell.com

    IBM runs SmartCamp – https://www-304.ibm.com/partnerworld/wps/servlet/ContentHandler/isv_com_smp_smartcamp

    The trend for corporates to partner with start-ups is known as open innovation generally.

    Of course, as mentioned above connections help and the support is often token. Yet it is often used as an early sign of credibility by start-ups. Also, most accelerators and incubators have or are trying to build corporate links.

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  • I work for a CVC (Corp. Venture Capital) and know many of the Corporate Innovation guys in the valley. They do look to start ups with strategic alignment and if they reached out to you, assuming its not the Corp Dev guys who look to do M&A’s, then its worth talking to. However, there are still a lot of NIH guys who try to steal ideas. Yahoo, Google, Samsung, Sony, all have “borrowed” ideas from start ups in the past and claimed it as theirs so tread with caution. If you’re trying to sell into them, thats a different story. Be happy to point you in the right direction.

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  • Be very, very careful.

    The pluses – many noted above.

    The minuses: the big company steals your idea, your execution, your people, etc.

    You can’t even protect yourself with legal documents – because legal documents are only as good as the money behind them; it is unlikely you have bigger or even equivalent pockets to your partner.

    Exposure is another issue. Big company = many people looking at what you do. It is not unknown that someone suddenly quits, then starts up a new venture…

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    • Its unfortunate but idea theft happen everywhere. If big companies steal your idea, they’ll probably suck at the execution anyway. That being said, you should at least entertain the conversation if its a reputable company. Just do your diligence on them. I’m sure people here can help.

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