Startups must live in the future. They create roadmaps, build products and continually update them with an eye to the next year, or even a few years later.
Large companies, often target customers for startups, live in a much shorter-term world. They buy technologies that can solve the problems they are aware of today, rather than those that may have to deal with a couple of bends along the way. In other words, they drive a Dodge, and most tech entrepreneurs drive a DeLorean equipped with a flux capacitor.
This situation can lead to a huge waste of time for startups wanting to sell to corporate customers - a black hole in business development. Startups talk about technology changes and customer demands that executives within the large company - even if they have "innovation", "IT" or "emerging technology" in their titles - simply don't yet see as an urgent priority, or they cannot sell to their colleagues.
How do you avoid the aforementioned black hole? Some recent research conducted by my company, Innovation Leader, in collaboration with KPMG LLP, suggests a constructive approach.
Instead of asking big companies what technologies they were experimenting with, we created four buckets, based on what you might call the "commitment level". (Our survey had 211 respondents, 62% of them in North America and 59% in companies with annual revenues of over $ 1 billion.) We asked respondents to rate a list of 16 technologies, from advanced analytics to quantum computing, and each in one of these four buckets. We conducted the survey at the end of the third quarter of 2020.
The respondents in the first group "weren't exploring or investing", in other words "we don't care now". The best technology was quantum computing.
The bucket no. 2 was the second lowest level of commitment: "learning and exploration". At this stage, a startup gets to educate its potential corporate client about an emerging technology, but getting a purchase commitment is still quite a few exits down the highway. It can be constructive to start building relationships when a business is in this stage, but sales staff shouldn't start calculating commissions just yet.
Here are the top five things that fall into the "learning and exploration" cohort, in ranked order:
- Blockchain.
- Augmented reality / mixed reality.
- Virtual reality.
- AI / machine learning.
- Wearable devices.
The technologies of the third group, "invest or drive", can be the weak point for startups. At this stage, the enterprise customer has already discovered some internal problem or use case that the technology could solve. They may have rocked some early funding. They may have internal departments or external test sites, where they know they can lead pilots. They are often considering what established technology vendors like Microsoft, Oracle and Cisco can provide and may find their solutions lacking.
Here's what our respondents put in the "investment or pilot" bucket, in ranked order:
- Advanced analysis.
- AI / machine learning.
- Collaboration tools and software.
- Cloud infrastructure and services.
- Internet of Things / new sensors.
When a technology is placed in the fourth category, which we have dubbed "in-market or accelerating investments", it may be too late for a startup to find a foothold. There is already a clear understanding of at least some of the use cases or problems that need to be solved and the return on investment metrics have been established. But some suppliers have already been chosen, based on successful pilot projects, and it may be necessary to remove someone the company is already working with. It can happen, but headwinds are strong.
Here is what respondents put in the "in-market or accelerating investment" bucket, in ranked order: