Why Should Entrepreneurs Woo Other Entrepreneurs?

Short answer: Because unrequited love sucks.

If you are like most of us creative entrepreneurs, you probably spend time fantasizing about getting your label taken up by a market leader. Or getting on Target’s shelves. Or being called out at the Oscar’s as “the world’s most brilliant new designer”. Which is ok because it keeps the dream alive!  Fantasies like this give us the push we need to get up when the alarm clock goes off at 5am. Again.  But don’t let these fantasies become your go-to-market strategy.  Because chances are that by the time the fantasy strategy works out you will long ago have run out of cash.

Why Big Brands/Companies Don’t Love You Back:

1.) Research shows that market leaders prefer to work with other market leaders – even their competitors – over startups. Why? Because they know the established business will deliver. They can estimate the risks–and therefore the costs–of working with that partner/vendor/customer.

2.) You should focus first on creating unique value for a specific market segment. If you haven’t done this then your startup doesn’t bring the big boys any added value. So, why should they care about you? Yet…BUT when you gain some market share they will call you back!

3.) Market leaders will likely gut your margins and maybe even butcher your brand. And you can’t stop a 900 lb gorilla if you are a little mouse. Partnering with the big gorilla sometimes gets you squashed!

4.) Inertia. Big companies are like people: change is hard and comes slowly. Waiting around for them to notice how awesome you are won’t work until you take a bite out of their bottom line.

5.) You are more likely to be innovative and customer oriented if you focus on gaining market share in new market segments than partnering with established brands/market leaders.

So, if you are a creative entrepreneur just starting out and trying to gain a foothold in a market, don’t waste your time wooing market leaders.  Instead, focus on your customers and partner with other rising stars and startups!  That’s a love affair worth your energy.

Leave a Reply