Miniseries: Startup Mind, Corporate Grind – Episode 2: The Founder’s Worldview

Welcome to Startup Corporate Grind, the latest miniseries from Empires of Innovation with Ozan Sonmez, we'll explore the fundamental disconnect between the industrial era corporation and the modern entrepreneurial workforce. This series confronts the uncomfortable truth that the old corporate structure wasn't built for this generation and this generation wasn't built for it. We'll dissect why shiny employer branding fails to attract the builders and creators you need, why corporate startup partnerships are a dangerous trap that can bankrupt a young company, and how the very definition of a job is being rewritten. Whether you're a corporate leader frustrated with your inability to attract talent, a founder navigating the treacherous waters of corporate partnerships, or a recent graduate facing a choice between creating value and becoming unnecessary, this series is for you. Join us as we challenge the obsolete rules of work and explore what it really takes to survive and thrive when startup mindset collides with the corporate grind. Now let's jump into today's episode. Hello, welcome back.

Hello, hello, hello, hello. Shaka Shaka.

Shaka Shakas. All the. All the excited jitters, I guess.

Yes.

For this episode.

All the good feelings.

Yeah.

For a difficult conversation.

No, it's going to be good. As always. Never difficulties. Are you? Yeah.

For corporates and for startups. They'll be the judge of it.

True. For whoever's listening, it might be a bit of a reality check.

Yep. That's what we're here for for sure.

And we're here to talk about not why corporates might avoid startups, but actually why startup founders can avoid corporates and large companies who may have a big payout to offer an exciting opportunity. The money could be huge, the exposure could be big, but it might not be enough to get a startup to come their way.

They can get the worst of both worlds instead of the best of both worlds. And I have seen my fair share of working with large companies and having the difficulties of working with large companies as a founder, as a advisor as well. So as you said, there's, there's a reality that this is where the reality distortion field disappears even when you get. Get into the details of things.

That's for sure. And we will definitely get into the details.

Let's do it.

So why could a founder say no to a deal, a partnership, or even a job with a large corporate brand?

So I'll try to use a framing that's easily understandable and it's like not going to have resource or cultural differences. So I want to kind of put this into a perspective where even startups in Silicon Valley or in Middle east or in Turkey or in Europe or anywhere else can actually use as a framework. And that framework I like to use is the resources framework. Regardless of geography, place, culture, country stage, I think this framework will help. Let me explain what I mean by resource framework. A startup, as explained by Steve Blank, is a temporary organization looking for a scalable business model. Temporary organization is an important phase, but scalable business model is also an important phase. Temporary because they have not yet figured out product market fit, they have not yet figured out fast growth. And that is one area where startups are trying to figure out. So most of them early stage startups are in the business of figuring out. The faster they do it, the faster they can go or they can close. Like if they can't get it, they close and they do something else with their life. That's something the corporates don't understand. Because the corporates believe they are talking to a company, like company to company. They don't understand. There is a lot of ambiguity and there's a lot of trials that's going on in the startup side. Even though there's no company to company talks. It's like a person in one company talking to another person in one company. But those people come from very different mindsets. They might be at the same age, by the way. It really is not a matter of age. So the corporate person can be 40, the startup founder can be 40, so there's no age difference. So these are not like young people we're talking about necessarily. Right. Because that is a misconception. That happens like, oh, if it's a startup, it's built by a young company out of college, they don't know anything. That might not be the case. Even though they have an experience, same level of experience. Even this person who's building a startup is, has a corporate background, has worked. They are not talking for the same mindset, through the same mindset because one of them is working for an entity, an organization that has found a scalable business model that's repeatable, that's working, they grow. That's why they are a large corporation holding company or whatever. And this one is just figuring things out. So one difference. That is one difference. So the resource framework is very simple. What are the resources that the startup needs? Yes, of course. Money? Yes, of course. Maybe. Funding? Yes, maybe. But most importantly, the startup needs to find enough customers to carry them forward into the large markets. And that's why actually they want to talk to large corporates. So at a stage where they have product, they have some revenue, they're trying to move into the late majority or early majority markets. That's the famous crossing the chasm. However, the corporation side does not know that the corporation does not know this company is just got revenue, just got the early adopters, just got the innovators. And they don't understand they are trying to cross a chasm by having that company. So the requirements are very different. And this is the part where the resource framework works. So resources in terms of money, if the startup has some investments or some bootstrapped money and some revenue, they have money. So what they look for is not necessarily the investment side, it's not necessarily monetary, they're looking for validation. So that's the second part of the resource. So money is one validation, branding, anything that's attached to that partnership usually is more important than the resource itself at that point. For startups, however, the resource is also important because without the resource there cannot be any transactional value. So just having the corporate logo might be problematic. And this is a very important point. So we covered two parts of the resource framework and let me cover the last important piece. A lot of startups try to get the logo of a large company and present it as they are a customer and they want to use their name to influence others and cross the chasm when they don't have enough resources, when they don't have enough revenue and they don't have enough product, market fit, alignment or signals. That is a mistake that I see a lot. Or assuming four large company logos will help them do something better is a misconception that I really like to highlight. Because if they don't have enough early adopters, innovators, regardless of how many big company logos they put on their deck or they put on their press release, they will not have what it takes to cross that chasm. The logos are not the important piece. The role early adopters and innovators play in the early stages of the product development is feedback loop, very fast feedback loop and some revenue loop. So just doing a proof of concept or a free pilot for the large company does usually nothing but damage to the new startup. Because the startup needs to understand what they should add into the product. And for that they need someone on the other side who will spend the time not only using the product, but giving feedback for the product. Not only paying for the product and kind of setting up a price point, but also giving feedback about the value they get out of that payment. That's the value based pricing that needs to happen as quickly as possible to make sure that the startup has a repeatable, scalable business model. Because repeatable is more about how am I going to find more customer scalable, how am I going to get more revenue and actually get both, how am I going to get more customers that pay me? So that becomes a scalable, repeatable business model. The business model part is the pricing. So how am I going to find the right pricing? And they make this mistake, they go to the large companies immediately. They say, okay, if I have this logo, this logo, this logo, they will be kind of vouching for me. A lot of people trust that it works for large companies. Whereas the large companies usually say, well, we can't pay you because you're not proven. And we have this huge limitations on product development, NDAs, disclosures, financial terms. So there's nothing beneficial for the startup in the corporate setting at that stage. And the corporates usually use these young companies as sometimes not bad intentionally, but sometimes bad intentionally as free labor. They don't pay, they don't give any feedback on the product and they actually do harm because they keep on saying, I need this feature, I need that feature. I want you to do this, I want you to do so they drag away the attention and the focus of the product mind into a consultant mind. Because if you keep on delivering every feature that your corporate partner that you value so much, if you keep on doing what they tell you to do, you're not going to build a product, you're a scalable consultancy company maybe at best, because then it becomes a clunky product, it doesn't solve exactly what you need to be finding and what needs to be paid and it just goes over that is a big difficulty. So instead of trying to get the large company give you the logo for almost nothing but damage, startups has to understand there is a time and place to start approaching large corporates.

So I think that gives some advice to startups. But when we're thinking about corporates who are wanting to work with startups, what are some of the things that they should, yeah, avoid? I mean, I think it's very easy for a corporate to say, yeah, we have a lot of money, we can invest it in someone doing X, Y and Z. But also what should, yeah, what should a big brand or a large company think about being credible in the eyes of a builder, being credible to an entrepreneur, to a founder, to someone who's innovating so much.

True. So I think the biggest difficulty that I've seen in large corporates when they approach startups as solution partners even to buy their products, not necessarily turn them into consultants, is they don't understand the pace of what the startup is able to do and what the startups needs to do. So this becomes a very huge disadvantage to startups or to people inside the corporate wants to work with startups is they don't understand there's a time, there's a pace difference. And the pace difference is in two things. One majorly is how fast the startup will deploy new features, will answer questions and everything else. And the second one is how fast the startup wants to get paid. So usually when leaders in certain problem leaders in certain organizations, in different verticals, different departments have a problem, they might go out and try to find the startups and they engage with startups and startups are very happy because there's some opportunity, some money, some revenue, and that's also a good way to kind of lead to product market fit. But they don't understand that the person they're talking to from the startup angle is not the person who's going to send them the legal terms. It's not the person who's going to send them procurement details. It's not the person who's going to send them the financial details. That's the person who has a problem. And that person, if that person is in some level of authority, they will be very engaged. So they will, he will try to figure out, can this startup solve my problem faster, cheaper, better than anything else in the market? And if they cross that path of validation, does it work? Does it work as it should? Can it be deployed? If all the technological specs are done, which takes a lot of time from the startup's perspective, but not a lot of time for the corporate. So that's the pace difference. For the corporate, having this conversation for three months is perfectly fine. But for the startups, they need to do a lot of things, but spending three months with a promise of something happening might be a waste of time. So when they go through all the technicalities, because they should be solving a real problem, otherwise the corporate will not go to this company. So when they get through all the technical difficulties, the startup is very happy. They got an approval, they got their security test, they got all this stuff and the corporate guy is happy, but he has to hand over it to other departments and that's where shit happens. When he hands over it to other departments in terms of pricing, finance, in terms of budgeting, in terms of control, in terms of legalities, in terms of procurement, then the pace Becomes something completely different. So and then it frustrates the startup and it frustrates the individual in the company who wants to work with the startup. Because every time a problem happens with any of the other departments, the job that needs to get done, the problem that needs to get sold, where the individual in the company trusted the startup doesn't get sold, doesn't get launched, doesn't get deployed because they go into this loop of procurement, finance and everything else. And these, all of them are legal. In some cases, these just take their own time. And hence whenever the startup goes to the technology leader or the problem owner saying this department did not respond to us on time, that department has a lot of things to do. So you're maybe problem number nine for them. And that person has to touch base with the procurement or legal or finance and ask them, oh, can you please make this a little faster? So they respond to the startup and usually the first response is like, oh, provide me with this details, give me this documentation, give me this, this. And if it's in procurement, procurement will say, well we just need to create a tender because their prices are a little higher and for us to be compliant to audit and finance, we need three bids. And they were like, what do you mean three bids? We just went through a three month process of validating our technology. Now you tell us you need to go out and find somebody to help you and you will tell them everything we're doing. You're just going to have us compete on price. That's something the startup can't actually usually can't sustain that damage. Or assuming they went through it, assuming the procurement was equipped with making those decisions, which usually they not. I haven't seen many of them that are equipped. Then it goes to negotiation, then it goes to payment terms and all of a sudden the startup is assuming there's a price. Finally you set that up. There's procurement, finally we set that up. And then there's price negotiations. Oh, finally we set that up and now there's payment term negotiations. All of a sudden the startup says, here's from the finance department. Well, everything looks great. Here's the pricing, here's the product deployment line and you can invoice us after the product is deployed and we'll pay you 120 days after or 90 days after. They go like, wait, what? They've never been into that situation where everybody wants to get the problem solved, but every division of the company has a different problem of their own to solve. The procurement department has a different problem. The finance department has a different problem, legal department has a different problem set. And they all tie up to the real issue, which is finding a technology to make things work. But usually in large corporates, they are so siloed. Finance, legal, procurement are almost as if they're working for another company. They usually don't realize if the real work is not done, they have no reason to exist. But they're so big now, that is their task. Like they have to follow rules, they have to follow structure. The person has to solve the problem, legal has to make sure this problem is solved safely and compliantly. Finance has to make sure there's payments, procurement has to make sure there's compliant. And all of these cycles are supposedly working for the same goal of solving a problem and making money. We're Talking about the B2C B2B business models usually. And all of a sudden this startup is like struggling. Who do they talk to? I talk to this guy, I talk to this guy, I talk to this guy. And this is why companies lose if they are not structured in their silos to enable faster pass of deals with startups. And I akin this to like in the airport. There's a normal passport line for people and there's a fast pass line for people who are more privileged. And this time the privilege is not that they're not there yet, they're not big enough yet. So it's like if there's a small company, here's how we work with them. If there's a large company, this is how we work with them. Because the risks are different, rewards are different, structures are different, money is different. But with startups there's not so much risk. They don't know what they don't know they're trying to figure out. So we should not apply in our general rule set. We should just make exceptions for working with startups. And I have not seen a lot of large corporates that has spent the time to talk about these siloed problems. I have not seen a lot of corporates that have spent the time to convince the head of finance, head of procurement, head of legal that they need to follow a certain rules. And again, it doesn't take too much time to tell them this is what we're trying to do, solve our problem so we make more money, so we pay your salaries. But for us to do it faster and in this competitive market, to become more competitive, to survive, you guys need to find a different rule set for these people. It's not like don't apply any rules that Won't work in the large company. This is a rule set for this category of companies that we work with, there has to be a different rule set. So, but again, most of these engineers, most of these, like whoever has the problem could be engineering, it could be fine, whatever that is. But they don't want to spend the time to break that silo and have them work because they usually don't have that clutter of influence. And they say, okay, I mean, they are a different department. That's not my cup of cake, not my circus, not my monkey. They will do what they do. I don't want to get involved. And all of a sudden you don't want to get involved as a leader to educate your own internal processes to be changed so that groundwork, when it's not done, everybody suffers back and forth and back and forth, many, many, many times over. And that's very inefficient. So one thing we tell corporates is when you want to work with startups, do the groundwork before you announce a project about, oh, we're going to be starting working with startups, just don't do that. Talk to your hr, talk to your legal, talk to your procurement, talk to your finance, tell them what you're worried about and tell them to come up with solutions. And unfortunately that has to come from top. Like it cannot come from any other division, it cannot come from operations, it cannot come from technology, it cannot come from sales or marketing, whatever the problem owner is. And most people in corporates actually forget that they're working for the same goal, which is to make more money as profitably as possible, as safe as possible. Now they're detached from the product. Most of the legal services or financial services, they're detached from revenue. Most of procurement, they think they know what about what's happening in the top line, but they don't know. They just look into the coast side and all these silos create information gaps and all these information gaps create the difference in pace. And that's why corporates really usually damage their reputation. Even though the individuals have really genuine goodwill and trust in their hearts because they want to do business, but they don't spend the time to make sure the company is ready to do business. With early stage companies or even smaller companies, we can say, I think that's.

Pretty insightful already, but that's really hard to see from the outside. I think it's hard to notice unless you've been in a corporate and you've maybe been in different, multiple different functions. Yes, in a Larger company you don't even see even. You could talk about two different sides of an organization only working with each other, not even connecting with people who work in a different office or whatever. So when founders and startups don't see this and don't know this, and you've mentored a lot of startup founders, you've facilitated a lot of accelerators and incubators, what is the sort of general reaction when a corporate does reach out and. And do you get in there and do you tell them, oh yeah, wait, think about it or how do you go about that always?

So the most important thing that we tell to startups when a company reaches out is ask them a couple of very simple set questions. Where are you in your organization structure? Very simple. How much budget do you have direct control over? But I don't need to give I this year our budget is 1.25. No, they don't need to say exactly the budget, but is the person that's reaching out can make decisions, is able to make decisions? If not, who is going to be making decisions? Is this person that's doing the reaching out an influencer in decision making, even if they're not a decision maker itself? Or are they just collecting data? Because they usually are. Like they could be a procurement department that is reaching out to this young company because they have a process that requires them to get three bids and they just got one bid, they want to work with them. And now this procurement leader or, or manager or assistant, depending on the size of the company, they're just trying to fill out that 1, 2, 3 line. Like you might be just a checkbox. They may not be 100% honestly open about this, but you ask them the question, what is this about? Do you own the problem or are you part of the decision making process that is going to lead us to the problem owner? Like, are you a gatekeeper? What is this that you are actually, you need to understand the internal dynamics. Simple questions. Do you have authority to sign a procurement office procurement order, rfp? Do you know who is the decision maker if you're not the decision maker? If you don't own the budget, who is the budget owner? Who's going to make the final signature? Do you know? Can you share us the limitations of revenue or limitations on the financial structures? Is there a rule in your company that says if it's below this much amount of money, two people should sign? If it's above, five people will sign. What are the rules of engagement? In a way and of course always ask about the timelines. Those are the critical things. Because a lot of companies, the real problems, problems might have delegated the search for solution to their juniors, managers, assistants, whatever. Or they might have just gone through what we described. They have might have found a solution, are now their procurement is just trying to line up to other solutions so they can have a comparison and pricing and permits. And so you might be actually playing a very different game than the one that you think you're playing. And for lots of the startup founders that I talk to, I immediately ask them if you can ask them payment terms, like what is the average payment terms you are recently signing up for any company? And sometimes they go, oh, but I can't ask that question. Well, that's going to make you, that's going to make or break you. Because I've seen one, one terrible case where the startup was approaching a large retail company that's selling consumer products. They had access capacity, the founder team, they went to this large retailer and the retailer told them, okay, here's the order. Month one, month two, month three. They were very happy at beginning, but then they were also very happy that the order got big and big and big and big and they almost got their full production capacity. But then they realized in the terms and conditions on the negotiations, they did not ask about upfront payment or they did not ask about payment orders or checks or anything that looked like a legitimate financial value. And they ended up supplying a lot of this tool, whatever that was, to the retailer. And the retailer was just doing what they were agreed to. So they did not pay the founders, the startup for months because that's not what they agreed for. So all of a sudden all this extra capacity spent, the production is done, payments out to bait to be production facility or equipment and raw material and people and revenue is increasing, hypothetical revenue is increasing because that thing is selling, but there's no money coming in. And when confronted, there was actually absolutely no solution that was provided by the company because I said, here's the agreement you signed for it. You're paying for this. We're not supposed to pay you. This, this, this. And all of a sudden the company was in a terrible shape. They had to actually go back to their investors who up until that point were very hopeful, very ecstatic. They could actually see the product they have invested in the shelves of a really large retail company. So they were very happy. So it was making it on paper, but it was not actually making it financially. So they had to actually give, put a lot more money in before they saw a piece of the revenue that the large retail was making. So they lost that negotiation. They didn't think about that negotiation too well. And by selling more they almost went bankrupt. So and it has nothing to do with the corporate, it has everything to do with how the corporate works. It's nothing to do with the person. They didn't have a bad intention to bankrupt this company. They said, how come you don't have a bank loan, credit line? So that was the answer when this was confrontational a little bit. And it was like we're a small company, no bank works with us, we don't have a credit line to take credits from. We needed you to pay us so that we can talk to the bank saying now we have money, give us a credit line. So everything becomes a chicken and the egg. And that's why the startups need to be very, very, very careful. The minute some large companies approaches them, they need to be extra, extra careful in trying to figure out and also from the company side, they also need to do have done this. We talked about the groundwork of talking to finance, talking to legal, talking to procurement, that there will be different rules and regulations possibly for the work that will be done by the young company. Otherwise everybody's blameless, but the startup suffers. So and the startup is blameless as well because they just made a good sale, they just found a large company as a revenue, as a partner and nobody's to blame for. But at the end if the startup goes off, they go off. So it's just like a switch.

That is a very unfortunate situation. But I mean I think good for anybody from a large company who's listening to think about the difference between their quarter and a startup's quarter and what that looks like, how three months can really change everything, don't get paid. But yeah, I mean that situations like that can really break trust and credibility in a large organization because yeah, the structure isn't there to facilitate working with startups or founders or otherwise. What would be some sort of solutions or ideas to sort of rebuild that trust, rebuild that credibility and yeah, reposition the brand as a, as forward thinking, as innovative, as friendly to startups.

So I think there's almost no way to fix that branding if it goes sour in one deal. Founders talk between each other. There's a much stronger gossip network among founders that the companies or even investors don't know about. So if you don't treat a startup well, it gets hurt slowly, fast or it gets hurt so starts hurting the company's reputation. I'VE seen this especially with corporate venture capital groups where they represent a part of the company. That's why they're a little bit more bureaucratic. They're usually not incentivized. The leaders of those corporate venture capital companies are not incentivized as much as an independent vc, GP or general partner is incentivized. So they see this part of their work. And if they're especially coming from that corporate culture, they are used to do things like the corporate, not like the VC they should be. So they usually are like corporate VC, but they're not a VC. VC, they don't act like one. And most VCs know it's the startup that makes a VC successful. But most corporate venture thinks they're successful because of the corporate. They don't need to be successful because they find the right deals, they found the right investor, right startups. So that mindset is very dangerous for corporate venture capital. I think the biggest red flag I tell large or small startups that are approached by CVCs is this mindset. If your investment does not do well, if your startup does not do well, the venture capital general partner is okay with that. The experienced one, the one that's an operator is, is okay because that he knows that's the job he's in or she's in. But for the corporate venture there are very different dynamics and usually the startup does not understand them. Oh, there is money they want to invest, there is money they want to. So the corporate venture or venture capital, well they, they seem like they're doing the same job. They're absolutely not doing the same job. Their money doesn't come from the same resources, their incentives are not aligned with the same at the same level. And usually there is turnover a lot faster in corporate venture capital than in normal venture capital GP partnerships. And that's why when you are talking to a corporate venture general partner they might act exactly like the corporate side and they might be working in silos. They might need a lot of. They might not have investment decision making apart from the company's decision making tools. They might try to impose the same rules and regulations because that's easier. Oh, here's a finance division that the corporate has. Everything the CVC does has to go through our finance department. Oh, we already have a legal department. Everything the CVC does has to go through our legal department. So everything becomes a very complex and cumbersome process instead of fast decision making process. So for startups that is something they need to understand really really well. And just going after just being approached by a corporate venture capital does not mean they're going to get maybe favorable terms, they're going to get less of a negotiation. It is from that aspect it's very different to be approached by corporate venture or a venture capital and startups that are doing it for the first time usually don't understand. So going back to your question, it's really important for the startup founders to understand what's going on and to actually think about what could go wrong and ask other people what might have gone wrong, what can go wrong. They need to use their network much faster, much easier.

I think that's probably pretty useful for startups who are starting to look into this crazy realm of opportunities. But I think it would also be nice to know what could a credible relationship between a startup and a corporate look like. What are some of the avenues that startups. Startups might consider, you know, putting feelers out there for or chatting with their corporate, you know, colleagues or yeah, network that they have.

So I think the most important piece is having a transparent conversation and not assuming they know more and just ask, not assuming anything at all. So a good partnership should be built on trust. But just because the company has a really important brand and everything else does not mean the individuals are or the company is not going to do what's best for them. So everybody should know, all the startups should know. At the end of the day, people working in the company are working in the company to do what's best for the company. The not to do a fair deal. In that sense they are tasked their job, they're paid for this, unlike the startup. So that incentivization is really important for them. And sometimes it's not like they are mean. They want to exploit you, they want to steal your IP or anything, though it happens occasionally. The intentions have to be very transparent and communication has to be very transparent. And that is one of the key things like assuming they will do this, assuming they will do that is really dangerous. Putting everything on writing is very, very important. It will, may, it may not help at the end of the day because we're going through a crisis with a very large corporation. And now I'm understanding even more. Although I've been giving this advice for many startups, now I'm understanding war. What the power of the brand is in terms of the legal side of things doesn't really matter how much of a legal documentation you have. You need to find a lawyer to be able to sue the company if shit goes wrong. But then you cannot find a lawyer to sue the big company because they probably are more afraid to go after the big company in terms of their own reputation, even if it's the case. That's a sure win. Even if you're 100% correct, finding a legal advisor to help you get this to court or get this to negotiation might be outright impossible. So that is something I'm becoming more skeptical and because I'm going through the same problem as of today and doesn't really matter if you're right or wrong. There is no right or wrong. If you're like talking to a giant in the room, the gorilla is the gorilla and nobody would like to fight that gorilla because everybody's like pretty pragmatic. So that is a challenge. Like being transparent 100%. Being putting everything in writing 100% and actually finding the lawyer to go through everything, including the possibility of going after the company if things don't go well is very, very important. I would usually not say this, but I'm suffering from that quote unquote mistake where I did not have the legal advisor before I signed the contract, or the legal advisor that we had just reviewed the contract and everything seemed well. But when there's a contradiction, it's a different legal service. Not just contract review, but litigation. And that's a different service, different company. So. And that's why I really not a big fan of companies that don't have an excess of €100,000 to be actually thinking about doing work with large companies.

I think that's, that's a big amount for a lot of companies.

Oh, of course it's, it's a big amount for a lot of people. Just give me one second, let me plug myself so we don't lose the conversation. Again, it is a big amount, but that's actually probably the minimum amount you would need to talk to a legal service provider and provide them with enough details on how this will go out, how they will be payment, how things will work. But it's really time consuming.

So beyond the hundred thousand euros or dollars, what have you, what are some of the stages of a startup that could consider working with a corporate. Yeah, they need to have that financial, you know, pot in the bank. But what else should they have set in stone, already prepared to do that they could actually start working with a larger company and not, well, not risk being taken as advantage of.

So I, I think we can go back and complete the resource framework because that's completely attached to it. One was finance, the other was a little bit more Structure and branding and everything else that's included. And the last piece of resources that founders need to consider if they have it or not, is operational power. Working with a large company could be all consuming and you might be a brilliant founder with a great technology product, might have found the right partner, potential partner in the company who has the problem and might have convinced them. And you might be actually going not after the logos, but actually having building your partnership and you might have gone through all the silos, everything might be working well. But a lot of the times the real delivery of services requires not just to deliver a technology and product, but also the delivery of communication and operations. So one of the key things that I would recommend, early stage companies or late stage startups with revenue, with product and everything else, is to have a customer success team. This rule 8020 rule, like you would usually get 80% of your revenue by 20% from 20% of your customers. That's more or less true in B2B settings and B2C is different. But if you're looking into that analogy, if you know this large company will have will provide you 80% of your revenues and if that's the case, you need to take really good care of them. And you always, always, always have to find the right communication style, communication mechanics and operational mechanics to be able to keep servicing that client and never be over reliant on one of them. So you might have nailed one large company, but you definitely have to be going after many because usually in about three years the people in decision making, power change. People that are working to solve this similar problem change. The person you're working with could be, could have received a promotion because of the work they're actually doing with you. And then the next person could have absolutely no reason to work with you because they might have a different reason to work with somebody else and they might not honor the partnership. Because partnerships in large corporate settings, again we should always remember they're done with people. So it's a people to people aspect. And if you're able to document that you're providing value, you are on par with market prices. Everything works out. That does not guarantee that you're going to win a contract or you're going to keep on working with a partner. Everything changes really fast, really quickly. If you have the wrong partner coming in, everything you tried building might collapse. And if you don't have enough reserves, that might not be the best option for you to keep on working with this, with this large corporate and also for the large corporate, when they have a really important problem. They don't go with startups, they won't go and solve it with early stage companies. They go with established brands, large companies. There is a saying that in the market that's like nobody gets fired because they chose IBM over everybody else. That was the case at least for a very long time. And usually because of that, people in corporates who are there because they want security, reliability and they want a career, they want retirement, they are working in the corporate for different reasons than what the founder is trying to do. So they are a different breed of people. They're not bad people, they're not good people, they're just people with different needs and expectations out of life. So nothing to blame for that side. I worked for large companies, I audited large companies, so I understand their mindset, but it's not the mindset of a founder. And at the end of the day, they're working for salaries most of the time. They're not going to be incentivized by the amount of money they have made by working with the startup and solving a problem. They're just doing their job. So when these incentivizations are not aligned, all of a sudden you might actually have a bad blood between who you're solving the problem for and the founder. Because that person might be making a lot of money creating a lot of resource and revenue and value for their company and they might not be getting their fair share, they might not get a good raise, they might not get a bonus. And all of a sudden you're doing everything. The company is making money, you're making money, but all of a sudden that person stops not liking you as much and there's nothing you can do about that except one. You can call that insurance policy is to have a very clear and transparent line of communication, is to have a very clear operational guide when they don't want to work with you. Large companies find a way not to work with you regardless of what type of documentation you've signed. So you need to make sure you keep on solving the people's problems. And it's very difficult. It's not usually relevant or immediately value creating for most of the founders, most of the startups. So that's why I think there is a maturity level, not in terms of revenue and number of people, but there's a maturity level that needs to be there for the early stage company to be able to go out and build a financially profitable win win situation for the enterprise and everything else. But they also have to know they need to have backup plans all the time. So the, the minute they sign a contract with a large enterprise, they need to have everything in their power to try and find another one. That is going to take as much time, as much resources to cultivate, to build, to get through all these silos and loops. So if things go south there, you don't get to decide should I close my company or should I fire people? You get to decide, okay, let's move forward with another client and let's try to get this done. But that's easier said than done.

Of course, it always is, especially when you're talking about success and, and yeah, you're also talking about money, revenue, impact on, on people's lives.

It's different incentives, different actions.

But I think this is super valuable information both for startups, for founders, but also for, for corporates and large companies who are starting to think about this. I think, yeah, it's, it's a lot when you have a big brand who, who says, hello, let's put our logo on your website and make you look even more popular than you already are. But there's a lot to consider when taking that leap as a founder and taking that risk.

Actually it's, it's great. And I think maybe one last word to people working in decision making roles in corporate. Regardless of the amount of work your legal department goes through in signing NDAs on documentation processes and everything else, or even not disclosing the revenue or payment terms or anything that's you think is in. The able founders know what happens sooner or later. They usually have mentors that are similar, that are working in similar domains. When something goes wrong, the mentor knows and the mentor knows. Everybody else knows because the mentors, it's the mentor's job, both from a personal perspective and from a professional perspective, to warn other companies not to work with this large one because he knows this large one is not behaving in the sense that they should be behaving or if there's a hiccup in terms of payments, there's a problem in terms of negotiations, if there's a problem in terms of the turnover of that company in decision making powers, the company is a piece of paper. It doesn't exist. It's a legal scam in a way that kind of protects shareholders. It's just a piece of paper that says this is a company, it has different liabilities than the people involved. That's it, that's what a company is. And so people can get mystified by knowing it's run by people like there's nothing called a company. It's a person doing something for something that exists only on paper. So you need to be very real about this. And that's why the communications and everything is this word. But also people are people, they will flaw. And if somebody else's flaw dangers your existence has the potential to danger existence. It's you who has to be very careful and very diligent. But regardless of the diligence and everything else, the founders has to be super, super, super careful. And the corporate people has to be also be very careful in these engagements because they think, oh we just signed an NDA, they can't tell anyone how much we paid them. Ah, you guess. I know. So they will never say what happened. Yeah, you might guess technologically it's true. Look, I have not seen a technology slip out of that NDAs, but I have always seen when the problem happens in terms of finance, in terms of negotiations and investment, these things accumulate and they spread out. Nobody needs to know the details of technologies. That's usually something I never hear. But a lot of people get into trouble or legal things, they will put them in trouble, never do. They have no idea how that information got through. And if you have bad reputation, it just comes in kind of gets you in danger personally. So this is not to scare the corporate leaders in or tell them, oh, it's dangerous to work with startups. On the contrary, working with startups is probably the best way to create faster value and solving problems faster. There's just a downside in that sense. Like you just need to do a little bit of work beforehand to make sure your company's divisions don't mess up that department's that don't mess up that relationship. So corporate leaders have to do internal work as much as external work to be able to find smart people solving problems uniquely compared to everybody else.

I think that's a lot of valuable advice and maybe the most important is it's a small world. News travels fast and especially in an entrepreneurial scene, in an innovative scene, everybody knows everybody and that news will be shared one way or another.

Absolutely. So behave.

That's the best advice you could give. Probably. I think this was great. I think there's more for us to talk about and also for for those who are listening to. Also check out one of our last miniseries which was Business Reimagined and a lot of the aspects of corporate entrepreneurship, entrepreneurship and culture of course is a huge player in all of this. But we'll continue the conversation. Doesn't stop.

Yeah, we have a lot of war stories ourselves and we know a lot of startups internationally, globally, regionally that have become reliable partners for very large companies and all partners benefited from it. So when I say I really mean like for a company executive professional, trying to identify the problems inside the company and finding reliable solution partners is easier within the startup community because there is a pace difference. If you want to solve something for fast, try new things and figure out how that fits, working with startups is the best option. If you do the groundwork, it will be match made in heaven.

That's for sure. We can hope anybody who's listening is actually seriously considering that and hopefully our our next episode has maybe a bit more positive tilt to to what that.

Could look like positive. Like we we really endorse this whole thing between startups and corporates. As long as everybody know what they're getting themselves into, transparency and communication is key for sure.

Cool. Thanks so much. We'll. We'll catch you on the next one.

Thank you. It's great talking to you again. Take good care.

We hope today's conversation has given you a stark look at the challenges and choices facing today's workforce and the companies that want to hire them. Don't forget to subscribe to Empires of Innovation for more unfiltered discussions. For more about Ozon's work, visit www.m r o z a n s o n m e z. Com. This is Startup Mind Corporate Grind signing off.