Entrepreneurs and startups around the world flock to Austin, Texas, each March for South by Southwest Interactive, a conference that feels like a five-day innovation and business-focused TED Talk mixed with nonstop networking, barbeque, and tacos.
I’ve heard many SXSW attendees say how much they’d love to move here—and in fact, Austin is a hotbed of new businesses, ranked #2 in the US in startup growth activity by the Kauffman Foundation. But entrepreneurs have unprecedented freedom to launch new businesses without geographic restraints, pointed out JD Weinstein, an Austin-based executive from Oracle’s Global Startup Ecosystem, during a panel discussion at SXSW.
Regardless of location, one of the most crucial steps for many new businesses is forming the right partnership with an established enterprise. Weinstein and his fellow presenters offered four bits of advice for startup leaders on how to how to identify the right potential partners, grow those mutually beneficial relationships, and build a healthy company.
1. Focus on Relationships
Oracle’s Weinstein suggests a number of paths that startup leaders might take to establish a relationship with an enterprise.
“You might look for an entrepreneur who sold his company into a big company like Oracle,” he said. “They know what it’s like to be a startup, what it’s like to work with that big company, and who the key players are there.”
Another inroad: Establish relationships with companies already doing business with the enterprise or venture firm you’re targeting.
But once a startup gets “in” with a larger company, its leaders need to avoid one common mistake.
“Don’t stick with just one relationship for one purpose, because people do leave and all of a sudden, your contact is in charge of databases in Afghanistan and they can’t help you,” Karen Kilroy, founder and CEO of Kilroy Blockchain, which works with companies around the world to develop artificial intelligence and blockchain solutions.
2. Align Goals
Another key to both identifying and growing a startup-enterprise relationship is making it a win-win.
For example, Oracle’s startup program focuses on offering young companies the benefit of two of the company’s key strengths: enterprise sales expertise and technology.
“Startups need access to really big enterprise customers, as well as training on how to sell into an enterprise,” Weinstein said. “We train the startups in our program on how enterprises are structured and even pair them up with Oracle sales reps that cover a territory or a product that is complementary to that startup’s offering, so they can sell together.”
And while many accelerators focus on fundraising, staffing, and marketing, “Oracle helps startups build out the technology they need to run and scale their business,” he explained. “As a cloud company, it’s a big opportunity for us to help these companies run their businesses better and grow quickly and scale effectively.”
On the flip side, startups can offer enterprises a level of speed and agility that larger organizations can’t muster—which is particularly advantageous if the smaller firm can address a specific challenge the enterprise is facing, Weinstein said.
To get that insight, startup leaders should focus on understanding the larger company’s agenda and how you can help them, advised panelist Sara Chapman, director of entrepreneurship strategy and partnerships at Dell Technologies.
“Send regular updates to your contacts and work to build your network within the company,” Chapman advised. “See what the enterprise is focused on and look for ways to partner.”
One unique partnership for Dell is grounded in its focus on social impact. The company teamed up with actress and entrepreneur Nikki Reed to make a jewelry line out of the gold recovered from Dell motherboards, adding a new facet to its electronic recycling program.
3. Be Open
While focus is vital for entrepreneurs, so is the ability to be open—in terms of how you network and partner as well as being able to shift gears when necessary.
Sabrina Wojtewicz, co-founder and executive director of Bunker Labs, a nonprofit focused on helping military veterans military spouses succeed as entrepreneurs, emphasized the importance of having an attitude of service.
“You should always be networking, but when you meet people, you should genuinely ask, ‘What are your goals? How can I help you?’” she said. “The more helpful you are, the more help will come to you.”
Another key to building a solid network: look for interests you have in common with those you meet. It’s about broadening your network through real, personal connections—and whenever possible, helping others achieve their goals, Wojtewicz said. Those relationships will often lead to other introductions.
While conferences like SXSW are a great opportunity to put those habits into practice, they’re also one of the places where startup leaders should do a reality check.
“Keep your eyes out for what the bigger companies are doing, but also watch for when those companies start pulling out because it doesn’t work,” Kilroy advised. “That’s a red flag that if they’re not able to sell a particular technology, you’re not going to be able to sell it either, most likely.”
4. Keep Eyes on the Bottom Line
Oracle’s Weinstein contends that customer revenue trumps investment dollars because it doesn’t involve giving up part of the company.
“Sales is also the number-one thing that investors look for,” he said. “You should value growing your company.”
That’s how Kilroy Blockchain did it.
“We’re a scrappy, self-funded startup; every penny we get comes from customers,” said that company’s founder. “What entrepreneurs need more than anything is a way to get customers. That has been our ultimate goal in developing our relationships.”
As a small company, she continued, Kilroy has the advantage of being able to get things done quickly. “But that’s driven by the fact that I’ve got eight families that won’t eat if I don’t bring in money,” she said. “It’s a different reality.”