Dancing with elephants requires nifty footwork

08 Nov Dancing with elephants requires nifty footwork

Posted at 00:00h in Commentary, Entrepreneurs, IT, Legal by

A few years ago, I gave a talk to a group of entrepreneurs in Fribourg, Switzerland, entitled “Dancing with Elephants.” The talk was all about how small, early-stage companies can partner productively with the giants of the industry. Then, this summer, I stole the title for a panel at Guidewire Group’s European conference, Innovate!Europe.
That, I thought, would be the end of it. I mean, how many times can you use a clever title before someone catches on? Turns out, you can use it quite a lot. In the last three weeks, I’ve moderated panels for three different entrepreneur groups, effectively exploring the same issue: How does a little guy dance with an elephant without getting crushed?
These panels have hosted speakers from Microsoft, Cisco, SAP, Google, and Salesforce.com, among a number of smaller companies that provided the entrepreneurs’ perspective. A lot of good learning came from the discussions, and I thought I’d pass along that learning here (and maybe put this panel topic to bed once and for all).
Dance lesson 1: Elephants have to dance, but not necessarily with you: The resounding chorus from the big guys on my panels was clear: the big, established companies have to partner with little companies in order to keep growing. Guy Daley, director of data center product management at Cisco, put it most bluntly: “We’re just too big to innovate fast enough.”
Partnering with small companies keeps large companies innovative and fresh, and helps to spread the footprint of the big guys’ technology platforms.
But just because elephants have to dance, that doesn’t mean they have to dance with you. The biggest mistake that small companies make is assuming that big firms can adapt to work with smaller ones. The reality is just the opposite; the little guy needs to align his business with the elephant’s goals. How does your technology improve the elephant’s business? How do you fill a hole in the elephant’s product road map? Most large companies are very explicit about their product strategy, and a little bit of research goes a long way toward a more synchronous dance.
Dance lesson 2: Elephants are BIG: Okay, so that’s a blinding flash of the obvious, but lots of start ups get lost in the abyss that large potential partnerships can be. These big companies work at an entirely different scale. In order to partner well, you’re going to have to show how you support the elephant’s work with key customers, how you’ll help them reach deeper into existing accounts or gain access to new ones. You may not be able to help an elephant drive significant new revenue, but if you can lead to a happier, more committed customer, that may be enough to make you an attractive dance partner.
Dance lesson 3: Dance a familiar dance: Very large companies don’t learn new steps easily, and they’re not about to bend to accommodate a partnership that is far out of the norm. You’ve got to demonstrate how your technology fits into the elephant’s existing programs, and how your deal comports to the elephant’s business framework. More than one small company has become a withered wallflower waiting for the elephant to accommodate it.
Dance lesson 4: Be careful where they step: Approach elephants with some caution, but don’t be too coy. Discuss technologies and solutions, not grand and vague ideas. Give sufficient product and technology detail so as to be credible, but don’t give away the farm. Few elephants will sign a non-disclosure agreement in initial meetings; wait until you’ve got a commitment to the dance before you share your trade secrets.
Dance lesson 5: Know when to stop dancing: Elephants can go on, and on, and on, and on. Their resources, patience, and tangled politics can seem endless. Little companies will run out of resources long before the elephant does, so know your limits. I’ve seen more than one little company starve to death waiting for the elephant to close a deal. And if your business strategy depends on getting a deal done with an elephant, it’s best to rethink that approach.
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Chris Shipley is the executive producer of NetworkWorld’s DEMO Conferences, Editor of DEMO Letter, and a technology industry analyst for nearly 20 years. She can be reached at chris@demo.com. Shipley, has covered the personal technology business since 1984, and is regarded as one of the top analysts covering the technology industry today. Shipley has worked as a writer and editor for variety of technology consumer magazines, including PC Week, PC Magazine, PC/Computing, and InfoWorld, US Magazine, and Working Woman. She has written two books on communications and Internet technology, has won numerous awards for journalistic excellence, and was named the No. 1 newsletter editor by Marketing Computers for two years in a row. To subscribe to DEMOletter please visit: http://www.idgexecforums.com/demoletter/index.html.

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