1. How startups can partner and even commercialize with BIG partners
Jeff Hotchkiss
@jlhkiss

2. The Landscape
 The long tail of innovation is "niching" out for
business.
 Smaller startups with innovative technologies are
now sought-after by large partners to commercialize.
Startups in this zone are
increasingly doing business with
larger distribution partners

3. Wait, wait, wait…
 “Big" companies don't
seek out startups to
commercialize. It's the
other way around.
 Startups have to bang
pots and pans to get
noticed by the “big”
companies.
 So how do you do that?

4. Step #1: Plan Things Out
 Ensure your business
strategy is well-thought
out.
 Mandatory: you need
to have internal
alignment and explicit
buy-in across the
management team,
business operations,
product, and
engineering teams.

5. Step #2: Prepare To Run LONG
 Set a reasonable commercialization timeframe. This
varies from 3-6 months to a few years.
 Ensure your investors have the stomach for this
timeframe and have adequately funded the company for
the duration.

6. Step #3: Socialize The Ecosystem
 This is networking 101. Prepare to run up your phone bill and travel
like mad. You can’t do this over e-mail.
 It helps you find partners, but it also helps you refine your focus and
overall strategy.
 Example: In mobile, instead of targeting Device OEMs, maybe you
want to target the Carriers because they own the "last-mile" to the
end customer, or vice-versa…

7. Step #4: Target And ID Sponsors
 At every big company,
you need an exec
sponsor.
 But more importantly,
you need that day-to-
day "worker bee"
sponsor that you can
convert into the
“evangelist.”

8. Step #5: Navigate Exposure
 Let your sponsors sell
internally and "steer"
them vertically up their
chain-of-command.
 But also, you need to
move them
horizontally into other
involved groups like
engineering, project
management, finance,
marketing, etc.

9. Step #6: Prepare To Wine & Dine
 This is typically referred to as the "cost-of-sale.”
 Large distribution partners are constantly being
bombarded by dozens, if not hundreds of vendors,
startups, partners etc.
 So…you have to “pay to play” to get their attention.

10. Step #7: Create A Unique Urgency
 Press a constant sense of urgency around cash-flow
sensitivities.
 This is unique to startups, completely true, and perfectly
justified, but don’t take it too far…you may appear weak.
 Explain that the hours of work that go into selling into a
large organization impacts your startup far more greatly.

11. Step #8: Manage All Project Tracks
 “Big” companies like
to spin up multiple,
concurrent trains at
the same time.
 You need to hire or re-
purpose someone to
manage all of the
different tracks.
 Stay organized and on
top of things!

12. Step #9: Rattle The Cage
 “Big” companies are
risk-averse, seek
consensus, and they will
stall on decisions.
 Don't hesitate to walk
away from the table until
decisions are made.
 Hold a mirror up to their
organization, let them
see their dysfunction,
and constructively offer
the way to get through.

13. Step #10: Set Forcing Functions
 Establish a contractual forcing function to
prevent negotiating against yourself.
 Secure contractual deadlines to force the “big”
company to negotiate.

14. Step #11: Get A Stomach!
 The closing process will get messy because both parties are
coming to terms with the amount of risk they are taking on.
◦ At “big” companies, executives can lose their jobs by doing deals with
“fake” startups.
◦ At startups, CEO's and entire executive teams can be banished to the
PCB fab industry if they make the wrong distribution bet with their
investor's money.

15. Step #12: Close, Then Scale
 The first deal is the hardest. After that, the
commercial deals get easier because you have a
market precedent for:
1. Pricing
2. Documentation
3. Amount of risk you want to take on
4. Overall validation of your strategy

16. Tip #1: Get A Good Lawyer!
 Make sure you have a good legal
counsel who can clearly explain to
your executive team the amount of
risk the company will be taking on,
especially with Liability, Reps and
Warranties, and IP/Indemnity.
 If your product list is less defined,
then definitely ensure your legal
counsel in an expert with IP and API
integration.
 If you're a biz dev person, you'd
better make sure you understand all
of this and can explain the
risk/rewards of the business terms.

17. Tip #2: Biz Dev IS NOT Sales
 Understand the
difference between a
sales person and a
business development
person when hiring for
lengthy, complex,
close processes.
 Most of all, do not
ever put a business
development hire on a
sales quota.

18. Tip #3: Place The Bet!
 If you're currently running
a startup and feel you're
working hard without
viable commercial deals,
then you haven't seen
anything yet.
 “Placing the bet” is gut-
wrenching if you're a
founder or CEO/CTO, but
it’s your job.
 You'll be rewarded by how
your organization
continually exceeds your
expectations if you push
them.

19. Thank You!
Jeff Hotchkiss
@jlhkiss