PoC is a learning process for B2B startups. Learnings acquired during the PoC process help validate the customer, problem-solution fit, and market fit.
The right customer and market fit also accelerates the startup's access to revenue, customers, and investment.
For these reasons, the startup must choose a PoC partner company compatible with concept validation and co-development.
Do all major corporations fit the right PoC partner description?
Our experience shows that not every company can be the right PoC partner. We will try to summarize how to choose a good corporate PoC partner for B2B startups. We made a lot of mistakes during the PoCs we facilitated and learned a few tricks.
Let's try to define the appropriate PoC partner, by going through the steps of engagement wit the company.
Pre-email Research
When researching possible corporate PoC partners, B2B startups should focus on the previous startup partnerships of the companies.
Looking into these previous corporate-startup partnerships, two indicators help differentiate and identify possible partners.
- Corporate Innovation Workforce. Corporations partnering up with startups can be segmented into two groups. Companies in the first group, have dedicated innovation departments, venture builders, and/or corporate venture capital arms. The second group of companies where P&D, R&D, marketing, and business development departments manage innovation activities. Structurally, the main task of the first group is to evaluate the collaboration with the startup. Validating the value of the startup through PoC projects is a valuable derisking service for this group. In the second group of companies, the business unit evaluates the startup to streamline its business processes or outputs. Rather than looking for PoC projects and identifying new value, purchasing previously validated products/services is the primary goal.
- Corporations who facilitate or take part in startup engagement activities When collaboration is the primary goal, the performance metrics tracked, the definition of success, and the entire process must be clear to all stakeholders. Awards and grants are not performance metrics, "a good startup" is not a definition of success. For meaningful engagements with startups, it would be healthier to involve relevant business units early and empower them to take responsibility. If you are looking for a partner for PoC, you need to meet the business units that you will work with as soon as possible. The questions business units ask at the introduction meetings will have a direct impact on how the project should coordinated and its success. When choosing a PoC partner company, make sure you get the business unit support that will drive success from day one. If the business unit is not a natural stakeholder in innovation activities, a forced introduction may lead to resistance and loss of time.
The first contact with the potential PoC partner companies is the email. There are 3 assumptions that the startup can verify in the email.
- The first assumption is, that even though the problem exists, the demand for a solution is an assumption. The startup should explain the corporate problems it wants to tackle clearly in the email. Confronting with reality early on saves time. Some problems are not real problems if no one is seeking a solution.
- The second assumption is that the email is addressed to the correct business unit experiencing the problem or is responsible for solving it. (If the person you e-mailed is not the owner of the problem, you can ask who it would be appropriate to talk to.)
- The final assumption that needs to be validated is booking an introductory meeting compatible with the pace of the startup (if the meeting date cannot be booked for any reason or is scheduled for a distant time in the future, you may need to be realistic and look for another PoC client, remembering that time is not an unlimited resource).
Preliminary preparations and introductory meeting
The introductory meeting with a PoC partner is also an investment meeting. The company that will be your PoC partner is your first investor, offering the necessary learning and sufficient capital to launch your product.
To prepare for the investment meeting, you can do company-specific research. Since you can't learn everything from desk research, focus on mastering the problem. At this stage, the problem should be your area of expertise. We are not talking about the solution and business models yet. When researching the problem, you should examine how other companies have approached the problem in different markets. Not every solution can be copied exactly, but it can be a muse. Exemplary startup-corporation partnerships tackling the problem in other markets will make the introductory meeting more productive for both parties.
The goal of the introductory meeting is to accurately evaluate the possibilities of a partnership that is compatible with the company and where resources can be mutually utilized,
The startup and the company both have different resource allocation expectations. The most important of these expectations is to be able to carry out a PoC project compatibly. The most obvious indicator of the success of the introductory meeting is that the next meeting will be a start on the PoC project design.
Let's create a checklist so that you can evaluate the introductory meeting properly:
Focus on how much information/data you need to get from the company about the problem you want to solve. An appropriate confidentiality agreement can make everyone more reluctant to share.
The human factor will be decisive in creating the solution proposed. Ask yourself if there is a team you would like to work with that will enhance your work in the future.
The introductory meeting aims to take concrete steps to design how you can do a PoC project with the company. We are not talking about a sales offer. A company that does not want to do a PoC project may request a quote without understanding the value. Don't go selling without proving value.
PoC projects may require the startup to use its resources. The startup should be able to request the expenses it foresees for the PoC project from the company. A free PoC will put both the completion of the project and the financial future of the startup at risk.
Watch out for whales. Companies that cannot adapt to the startup's pace and have expectations such as letters of guarantee or free PoC, might be an unmanageable risk factor for the startup.
The goal of a PoC project is to test and validate new business models and technology together. PoC should be an objective opportunity for both parties to achieve this cooperation.
In this article, we aim to remind you that the responsibility for managing the risk of technology and business model development in PoC lies with the startup. This also applies to choosing the right PoC partner.
We have created numerous PoC (conceptual validation) projects and facilitated them between companies and startups. Through these engagements, B2B startups raised over $22 million.
Our corporate network of companies and our PoC expertise, helped B2B startups commercialize, productize, and receive investment.
If you have a startup that has launched a product and is looking for market fit and investment, we want to get to know you Workinlot PoC Labs