Jason Murray and A.K. Schultz know a thing or two about working with startups. Murray, the co-founder and CEO of logistics startup Shipium, was a 19-year veteran of Amazon, including VP of retail systems. Schultz, the co-founder of the supply chain software startup SVT Robotics, was a vice president for the retail and e-commerce market at Swisslog. In their former lives, both experienced the challenges of integrating startups into complex systems. Here are two pieces of advice on how to make the relationship work.
Take a long-term view: “At large companies, there’s often no interest in an idea unless it’s perceived as a billion-dollar market play,” says Murray. “It’s easy to get stuck on the usual metrics to measure whether something is successful.” At a time when the PC market was in a slump, most manufacturers were focused on their existing operations. Apple, meanwhile, took a long-term view, talking to emerging suppliers about the iPhone.
Help them overcome gravity: “Here’s the advantage a startup brings: The ability to change course rapidly, not just technically but organizationally,” says Schultz. “And, while the level of capitalization is tiny, almost their entire budget is dedicated to R&D. A company with $3 million in funding may have more money for R&D than a large company.” And, since startups don’t have to work on profitability at early stages, they are flexible. If a large company can finance the proof of concept and get the startup to a position where the solution is ready to deploy at scale, the money will come. “The moment a contract is ready, the VCs will see that the startup just needs money to monetize it, and that’s when the big rounds start to happen,” Schultz says. “A contract can help the startup overcome gravity.”