Symbiotic Relationship Between Small Startups and Big Corporates

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Small Startups and Big Corporates

The tech world works a little differently than the rest of the business landscape. In retail, or hospitality, or even service oriented industries, Big Business is seen as a threat to the small-time Mom and Pop operations that were once the hallmarks of Main Street. This isn’t a primary concern in tech. Time and time again, when small startups innovate, they’ve demonstrated the ability to stay ahead of the larger companies that try to imitate them.

Even with deeper resources—in both money and technical talent—a large company’s size and attendant bureaucracy can seriously slow them down. It’s like the T-Rex and the Velociraptor—in a race for prey, the little carnivore wins every time. But when they go against each other, the T-Rex buys a controlling stake in the Velociraptor’s portfolio and slowly absorbs it through a series of corporate mergers. You can’t argue with science.

Increasingly, though, big companies and startups are working together, in a kind of symbiotic relationship. This more applies to companies that offer complementary products rather than those in direct competition, but there was a time when that didn’t matter so much. Often, the phrase “software development” was just a synonym for “mergers and acquisitions.” Think of the way Google has expanded its service offerings beyond just web searches, and you’ll understand what I’m saying. It’s no longer automatic for a large company to try and absorb new products into their lineup, and not every startup is a cynical ploy with “Sellout to Google” in their mission statement. Cloud computing—which at its most basic can be described as software all over the world running on the same network—has opened up easy paths to integration between complementary offerings.

To see what this looks like in practical terms, look at Australian startup and mobile (POS) provider Kounta. When Nick Cloete founded the company in 2011, he wasn’t the only one to figure out the advantages of the cloud for point of sale software. He just approached it differently than many of his contemporaries. Rather than try to be all things to all people, he and his team designed Kounta with hospitality in mind—and with the aim for it to be the most full featured cloud offering for that segment.

When Kounta (the software) went live in 2012, the team had already created something that could compete with that sector’s establishment—companies like Micros and NCR could no longer claim that cloud POS was too limited to be of use. Since that time, the company has grown considerably, along with the software.

The expansion of its feature set has actually outpaced the expansion of the company’s development team, thanks to some key partnerships with other companies. Some of these are with like-minded startups: mobile ordering app Beat the Q lets users order and pay with their smartphones, then sends the order details directly into Kounta, for example.

Some other partnerships are with technology giants: when Beat the Q sends order information to Kounta, the POS can redirect it to a cloud-powered kitchen printer made by Epson. Most notably, Kounta partnered with Australia’s MYOB to bundle the former’s POS with the latter’s online accounting software, a mutually beneficial match made in, if not heaven, then a really nice boardroom.

While there are obvious benefits to these kinds of partnerships, Cloete notes they shouldn’t be entered into lightly. “Corporates are naturally attracted to partnering with smaller and more agile tech companies,” he said, but warned that if any of the parties involved are going to have to adapt to the other, it’s the startup.

A huge company with well established policies and processes isn’t able to make itself lighter and quicker, so it’s incumbent for the small fry to have clearly defined outcomes and expectations as part of their agreement. It takes longer for a product to get to market when dealing with large entities. Cloete explained, “If not properly managed, this can stifle smaller teams and create resource deficiencies in other projects.” Of course, the rewards for such a partnership can be huge, which is why Kounta undertook them.

Knowing the cons in advance, Cloete made relationship management integral to the culture at his company. Per Cloete, “Kounta is very focused making it simple and enjoyable for corporates to engage and integrate our offering into theirs,” he said, and offered some advice to others who seek to do the same. “Patience and flexibility are the two most important qualities to bring to engagements with bigger organisations.” This, he says, will ensure that they can work with you more easily.

Finally, it’s important to remember why you struck the deal in the first place. Spoiler alert: it’s not about the money. If that’s the sole reason you’re working with another company (large or small) you’re doomed to fail before you start.

At the heart of a tech partnership ought to be the desire to improve your product by adding the functionality of the other. In other words, you’re trying to give your customers—existing and potential—something even better.  “A clear and universal understanding that the customer experience is paramount ensures the best result,” Cloete said.

That means that no matter how complicated the particulars of this new business arrangement are—with each side defining roles and responsibilities, spelling out what it puts in and what it gets out of the deal—the customer experience needs to be part of the discussion. If you forget about your users, they’ll likely forget about you.


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Author: Dave Eagle

Dave Eagle is a writer and photographer, but necessarily not in that order. For the past few years, he’s been writing about point of sale for Kounta. A Cloud based restaurants, bar, cafe & coffee shop POS. He lives in Vermont, USA, but has prose in different area codes.

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