Questions

How do I work around the fact that big companies, that want my service, have policies not do business with small companies like mine?

I'm about to close a deal with a multimillion company for a software solution which will cut cost and make their operation safer. The company entity I'm dealing with wants us and know that my company is the right choice for this particular service. Also worth mentioning is that my company will own the software and sell it as a complete "product/service" to my client once the software is completed. But they said they can't sign a deal with such a small company. So what I think I need to do is to "team up" with a bigger company and let them have a contract with my client for "distributing" my software solution. ( big company is basically doing nothing.) I know this software will help a whole business branch and have ambitions to sell the same product worldwide and keep developing it. But I'm afraid that I will not be able to build and sell this software product/service on my own terms (I.e not move fast and crush expectations) if I'm playing my cards the wrong at this moment. Any thoughts, experiences or ideas? This can be a big leap for my tiny company and I so badly want to get a foot in the door! Thanks for reading!

4answers

Your business model seems to be a SAAS model (software as a service). The best way to make them forget about your company size is to provide them with a working free trial offer of your software and to get them to input as much of their own data into it so they will think twice before switching to another provider. I wish you success and prosperity. François B.


Answered 5 years ago

Along the lines of Devon's feedback - who specifically said they can't sign a contract with a small company? The legal department? What is the position of the department that will actually benefit from your software?

One other option - you might consider code escrow as a way to reassure them they have a bail out position if you close up shop.

If it's a cloud service, are you running on your own infrastructure, or a third party like AWS? This can help provide some reassurance and also provides ways to standardize the code that you might leave them in escrow.

You need one advocate on the inside who can help you, who enjoys the benefit of your solution and doesn't just see the risk.

Good luck and congrats on getting this far.
Karl


Answered 5 years ago

Hi there!

First off –congrats on the opportunity. That you’ve found a great fit for your software is wonderful news.

Based on my experience negotiating contracts with companies of all sizes, particularly for procurement organizations, I have some suggestions -

Has the potential customer been able to share with you why they aren’t able to sign a contract with a small company? Beyond there being a ‘policy’, what concerns do they have, and why do they have them? Asking questions to uncover the specific concerns will help you determine if there’s a feature or term in the contract that you can adjust to address the issue. (Some variables that can pop up as concerns are insurance coverage, financial stability so that you'll be around to support them long-term, contingency plans/systems, or adequate bandwidth to meet their needs for customer service/tech support)
I’d recommend exploring this path a bit more with the potential customer before bringing a 3rd party into the mix.

If the client’s concerns can’t be addressed successfully in a negotiation of the contract terms, bringing in another party to act as an agent or distributor is an option.
Some thoughts on what to look for in that relationship:
- establishing a contract between yourself and the agent (independently of the client),
- financial arrangements related to fees/% due to the agent (they may not be doing any development, but facilitating the deal is a service that they’ll likely require payment for),
- limitations on the relationship with the agent (so that it’s for this specific client/product/time period. This way, as your company grows, you’re not limited by that structure).

Hope that helps get you moving with discussions – would be happy to provide assistance along the way.
- Devon


Answered 5 years ago

Find out what about your company structure is giving them concerns. Is it your business type? Do you not have enough insurance? Are they asking to look at your financials? Its not uncommon, in big partnership cases that hinge on the balance sheet, to have an angel provide a short-term investment to shore everything up (although ideally that will happen before you share the data with your prospective partner) - I know that I've done that before.

If people at the other company really want the deal to happen, it will happen. If you're unsure to exactly what the blocker is, your best bet is probably to ask whoever your internal advocate is directly. Without that information you're likely to spend a lot of effort in solving the wrong problem.


Answered 5 years ago

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