Developing Relationships with Big Companies

Ben T. Smith IV, co-founder of Merchantcircle.com & Spoke.com (btsiv.com), talks about developing relationships with big companies. These tips will help you build those important business bonds to help better your company. Watch the Video @ http://www.youtube.com/watch?feature=player_embedded&v=gg7J_bY76uQ

1. Understand the assumptions of the big company
2. Ignore any negative criticism
3. Consistently deliver relevant results
4. Establish long-term trust

Anytime you’re thinking about selling your company, eventually, you’re going to be talking to big companies about buying it. Having worked with both buyers who are in very large companies, $20 billion type of companies as an executive, as well as having sold my company to a big company, the whole process is a long process about building relationships. I can promise you the first time you’re having an interaction with big companies, it’s usually not going to be comfortable, it’s not going to be positive. They’ll probably going to even laugh at you. You’re not going to start with, “Hey, we want to buy you from day one.”

Building that relationship over time is what drives you to success. So you’re going to go through a cycle. First, they’re going to think the problem you’re solving is unimportant. Then they’re going to laugh at the fact that you think you can solve it. Then they’re going to decide that they think they can do it themselves. And then eventually, if they’re still talking to you, they’re going to decide that you’re a better solution than trying to do it themselves.

In order to get past those cycles, the first thing I suggest you do is when you’re in those early meetings, really listen to them and understand what are the assumptions that are driving their perspective on your company, what’s driving their business, what metrics matter to them, et cetera, and really understand what drives their underlying assumptions.

Then, I’d say ignore them and stop listening to them. Because if you listen to a big company when you’re a startup and you’re talking to them, chances are you’re going to give up pretty quickly because they’re going to make fun of you in the beginning. They’re going to think you’re a crazy founder and it never going to solve anything.

Then once you understand their metrics, keep coming back to them, listening to them over and over again and delivering to them a consistent set of metrics as to what you’re accomplishing relative to their metrics. So if it’s the case of you’re really gaining a lot of consumer traffic, show them how you’re gaining consumer traffic and deliver those same metrics over and over again over a period of 18 months where every time you talk to them, every time you e-mail them, you’re giving them one more piece of data that shows your company is doing better and better.

And that process develops trust relationships with the buyer. In the end, they’re going to be making a bet on you. So you got bring them along, have them develop a level of trust with you over time if you’re going to make it happen.

And then one day, they’re going to offer to buy you. And at that point in time, there’s a bunch of details about how you get the deal done, but you can’t start at the end and worry about the details of how you do a deal. You really have to start building that relationship and building that trust or set of common metrics over a period of 18 months.