Advice to Startups on Partnering with Large Companies

Words of wisdom to startups from a serial entrepreneur who is an entrepreneurship guru.


Jul 27, 2015

Startups, be sure you enter partnerships with large companies with your eyes wide open. Steve Blank has two important pieces of advice for you.


What I remind startups, and it’s just a fact of life, is that whoever you do the deal with is probably not going to be in the same job in 18 months or three years. I don’t mean that as anything bad, it’s just a matter of fact. And so regardless of the personal relationship that you have with that person in a large company, the business still needs to make sense, not only on day one, but even on year one, two, and three and going forward.

The second is that for a startup even although it’s compelling, you never really want a large company to be a substantial fraction of your sales. If anybody owns more than 25% of your sales for multiple years, then you actually become a captive supplier to them and you’re going to be beholden to every whim of both cost-cutting or features etc. and you are either a captive supplier or you know making custom products and that is not really a startup.

Published Date: Jul 27, 2015

Author: Michael Krigsman

Episode ID: 225