Dancing with Goliath Introduction

Quick Summary: Forming a relationship with a large company first requires careful dancing.

Abstract:

For a small company, forming a relationship with a large, well-established partner or customer is no easy challenge.  Whether accidental or intentional, a large company can overwhelm a new company; by crushing them with their rules of engagement – essentially, stepping on their toes during the first dance.  Understanding the pitfalls and perils is important.  One thing that must be considered is that if one refuses to dance, no positive outcome is possible.

The title of this section, Dancing with Goliath, probably conjures up an image of the Biblical Philistine giant in full armor ready to do battle. Dancing with such a menacing looking creature is probably the last thing on anyone’s mind.  This image is not too far removed from the situation that many startups envision when thinking about approaching a large, well-established company that could be a business partner or even a customer.  The fear is that one false move and the giant could step on them.  It might be deliberate, or it may be accidental, but the result would be the same.  The article 5.050201, “David or Goliath Partners”, describes the use of Goliath as a reference to a much larger and formidable company while the startup company is similar to David, a young, inexperienced, and untested individual.  Unlike the Biblical story, this analogy is not about the fight and the outcome.  Instead, it about how the two totally opposite entities can form a mutually beneficial relationship.

Although this section is in the Business Partners Chapter, by extension, most of the articles are applicable to young companies as they approach large and well-established potential customers as well.  Again, accidentally or intentionally, Goliath customers can also “step on” small companies and destroy the relationship before it even has a chance to form.  As an example, many large companies have developed or outsourced Vendor Management Systems and Approved Supplier Systems that include rigorous requirements and documentation before a potential vendor can even propose a product or service to a company.  As another example, a well-known company required every potential supplier or business partner to have applied for or have definitive plans to apply for the Malcolm Baldrige National Quality Award before being considered.  The Federal Government and most state and some local governments require suppliers to apply for and receive special standard contract status such as the General Service Administration GSA Schedule.  It commonly takes over a year of forms, testing, and review to gain approval for products before the Department of Defense will add them to their approved vendor list.

There is no question that complying with these sometimes overly rigorous requirements can help to
qualify and “protect” a large company.  However, they can be virtually impossible for a small company to meet within a reasonable time frame and with the available resources and funds.  What further complicates the situation is that most of these programs are administered by staff professionals that are, most likely, not involved in the actual operational aspects and decision-making process of the business.  So, your value proposition, no matter how compelling, may never be heard until you have successfully traversed all the process hurdles.  Many of those issues are addressed in the twelve articles in Chapter 5, Business Partners, included in this volume.

Some large companies have recognized the difficulty that they have imposed on smaller companies and the resulting lack of access to innovation.  These companies have “by-pass” mechanisms to help smaller companies.  As an example, many large companies actively promote supplier diversity programs.  However, few companies have programs specifically established to help potential small business partners.

Although successfully dancing with a Goliath can reap substantial benefits, the opportunity cost in terms of expenses, time, and diversion from other activities may not be the best use of a David’s limited resources.  Clearly understanding upfront what it will take to “do business” with a Goliath is an effort that will be well-worth the effort.   If possible, wear steel-tipped shoes when you initially dance with them!

As a final comment, this section is about “dancing” with a Goliath.  It is not about establishing a long-term relationship with them.  Those issues are covered in other articles in the Business Partner section of this volume.

 

Article Number : 5.050401   

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