Navigating the corporate world in the hope of finding a fertile spot to plant a seed is far from easy. Sometimes there comes a point when the cost of pursuing an opportunity becomes disproportionate for the return. But if the return can’t be measured purely in direct revenue terms, (the opportunity is with a halo brand that would most likely, if won, trigger interest from other aspiring brands for example), smaller companies are often left with a very difficult decision: pursue or abandon?
Whilst larger companies may have the fuel – the time – to extend negotiations, the small company is more exposed to the risk associated with the cost and of course, the possibility of not winning the business. Conversely, there is the risk associated with not pursuing the opportunity. In other words, what could have been.
It’s a tough call, but one that can be made easier by gaining the full understanding of the buyer as early as possible. It’s a premise I’ve no doubt applies to all businesses but for small tech companies in particular, it’s fair to assume interest from large companies is based on the innovation the small company brings to the table.
This being the case, it is vital the small tech company gets the corporate to acknowledge, and understand, that the innovation is what provides the difference. It’s what sets companies apart.
Why is it vital? Well, unless the tech company can convey the danger to the corporate in being draconian in their demands and their terms, the commercial and legal exposure can be debilitating. To the small tech outfit, it can be the difference between survival and failure.
In short, pursuing the Big Corporate opportunity means having to quell the tendency to kowtow; it means having to state, in no uncertain terms, that by exerting too much pressure in the interests of short-term gain, the larger company risks breaking the smaller company and as a result, losing the source of what attracted them in the first place: the difference they provide.
(picture courtesy Rogue Pictures Inc)