In unstable economic times, startups in the early stages of development are at high risk. In this article, we will figure out how to get large companies especially tech companies as clients in order to stay on the market.
The Dominance Of Startups And Your Imitations
The startup market in the USA has recently been growing rapidly: in the first half of 2022, investments exceeded more than 2.5 billion Dollars.
This led to the fact that literally everyone was hunting for startups in the early stages: government agencies, corporations, private investors and venture funds.
They sought to take part in interesting projects as partners or investors in order to develop them independently or resell them at a higher price.
Serial entrepreneurs have appeared who have already launched more than one startup and are launching more.
However, upon closer examination, it turns out that the revenue of their companies is small, and the shares have already been distributed among a large number of partners and investors, and whether the business idea has potential is still not clear.
And another situation is that companies that have already been taken over by corporations continue to call themselves startups, although they are not, in fact, startups.
Large organizations often gobble up promising startups in the hope of innovation that they can monetize.
After all, a startup has a strong point – it can afford to quickly test a large number of hypotheses in search of an effective business model, adapt flexibly to changes and feel the real needs of customers.
The Fittest Will Survive
A period of turbulence has set in, after which the market will become more consolidated. It will be cleared of frankly weak projects with an unclaimed product.
In the current environment, late-stage startups with an MVP (Minimal Viable Product) and existing revenue feel more confident.
Not all less mature startups are able to quickly adapt to new conditions and risk not surviving the crisis due to a general decline in purchasing power.
“A completed business project, in my opinion, is more resistant to crises. I mean companies that already have a working business model, flexible management and experienced management that soberly assesses the situation. Only in this case, high-quality decisions will be made that can become a response to market changes. In a crisis, the speed of decision making is critical.”
How A Beginner Can Stay In The Market
Beginners that are at an early stage of development and, as a rule, have only a business idea, even not always an MVP, do not have a client base and stable revenue. In a crisis, it is as difficult as possible for them to stay on the market.
Few investors will now invest in such projects and try something new: the risks are too high. It would be useful for founders to quickly reach their audience and enlist customer support.
If we are talking about the B2B market, then it makes sense to do free pre-projects based on some client in exchange for a reference. Study which large companies and funds are still running accelerators.
Participation in them is a fairly simple and understandable way to get a client, a quality reference, and, possibly, a small grant for development.
Projects that already have clients need to describe successful cases as soon as possible – this will help reduce the cost of obtaining new customers and focus on the financial indicators necessary to attract the next round.
This can be the rate of revenue growth, annual regular income and monthly, the cost of the contract – total or annual, as well as the amount of total profit from one client or the total turnover of goods.
It is also important not to forget the product metrics. It’s not worth focusing on everything at once – each fund has its own evaluation criteria, which depend, among other things, on the maturity level of a startup.
As a rule, this is one or two key indicators. Here it would make sense to consult with potential round participants in advance and understand what metrics they are focusing on.
What exactly should not be done by any beginner in a crisis is to attract loans and credits, use the funds of private investors in the hope of improving the financial situation.
It is necessary to think strategically and focus on those steps that will increase the attractiveness of the company in the eyes of investors.
What The Market Demands
The trend of the last two years suggests that the market needs startups focused on the B2B market. There are more of them than B2 °C startups, and the fastest growing areas are fintech and solutions for the HR market.
In the USA, after the departure of foreign brands and companies, a large space has been freed up for new players in completely different niches. There is already a large demand for import substitution of foreign software.
The difficulty lies in the fact that startups need time to develop a new product from scratch. Now is a good time to “cut” full-fledged solutions that can seriously compete with international products at the present time and, more importantly, in the future.
In this context, it should be understood that foreign software is also developing at this time and does not stand still. The small time advantage we gained will be eroded very quickly.
The good news for founders is that big business is actively considering startup proposals today, because they are forced to look for local solutions to their many problems in the current situation.
Such companies are good potential customers: they have budgets, they are confident on their feet and you can plan your own future with them.
5 Key Points To Attract A Large Client
B2B startups tend to seek out partnerships with large businesses. The only question is how to draw attention. There are several ways but here we will discuss top 5 only.
Ability to Present and Sell Your Product
The founder should not think that his idea is the coolest and most obvious to everyone. It must be able to present it to the market, as well as to major players.
It is important to learn how to convey information concisely and at the same time capaciously. In times of universal time pressure, this is a very useful skill.
When it comes to working with a corporation format business, then you need to understand why your product or service may be of interest to a particular decision maker in a corporation.
Perhaps your solution will allow him to optimize the processes of his division, influence his own KPIs and the financial performance of the company as a whole. Business does not exist between companies, but between people.
Focus On Customer Service
It seems banal, but due to customer service, even now you can stand out from your competitors. As a rule, many companies focus only on sales and turnover, and forget about the convenience of users. Don’t repeat their mistakes. Really good service and customer service is still a huge market advantage.
Share Customer Experience
Even in a turbulent situation, big business is looking for startups that have customers, implemented solutions, and real testimonials.
A business idea must be supported by something tangible. In this case, the client will be more interested in cooperation: if someone already uses this product and gets results, renews licenses, then it really brings business value.
Be In Sight
It is important for a startup that wants to get into the orbit of attention of a large company to be recognizable. This means having a convenient and informative site that is easy to find in the search.
Be visible in social media networks, work actively there among your target audience, as well as potential investors.
Regularly appear in the media not only with stories about your own product or achievements, but also as market experts.
PR activity will make it possible to interest large businesses in their own product or convince them that they are dealing with a serious project.
Involve The Audience In Product Development
The formed community makes it possible to repeatedly contact the target audience for free and increase its loyalty.
Organize meetups and conferences, hold webinars on industry topics, create professional communities in Telegram and try to be the main trendsetter in your product line.
If everything is done correctly, then community members will at least help to conduct a quality custdev or even become your customers.
Startups need to find not just customers, but those who are ready to believe in their project in difficult times.
This is possible, but it requires significant effort on the part of the founders and the entire team. And it is better now to focus on business in the niche that the market is in dire need of.
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