Image by David Gómez-Rosado

Getting that one big reference customer during the initial launch phase, can be huge for any start-up. It literally has the capability to put you on the map, and get you noticed. However, unless you have some industry disrupting, mind blowing revolutionary product or service, adoption by larger businesses takes a fair amount of time. Some challenges you will face when you pursue large accounts earlier on, will be:

1. Very long sale cycles: 
This is linked to the complexity of your product and costing. However, whether it is a complex sale or a simple one, the cycles will be far longer than your average cycles. This drains the limited resources of your business fairly substantially, and has the capability of lagging revenue generation efforts which are critical to a start-up’s survival during the initial phase.

2. Tough Negotiations: There is definitely an unbalanced relationship dynamic when you pitch your business to a large Fortune 500 or 1000 business executive. This usually results in contracts and terms that are not very favorable to the smaller company. Before signing your start-up’s life over, make sure you read your responsibilities well and assess whether you have the resources to deliver.

3. Customizations: Much of the time, substantial customizations will be required by the larger account, to make it easier to integrate your offerings. This is another challenge that needs to be assessed internally, to figure out whether it is worth doing. This depends on your  margins level, whether additional resources will be required, and the time it will take to complete the customizations.

I am a strong advocate of developing a small and medium account base before going after the bigger accounts. This will give you the chance to gauge your customers-products/services interaction, iron out the kinks, and give you the confidence to sell to bigger companies eventually.

“Hit many singles and doubles, not just home runs. While home runs provide the opportunity for a quantum increase in the growth trajectory, they are unpredictable and don’t happen all the time. Singles and doubles, however, can happen every day of the year. They result from a determined, day-in and day-out improvement in the activities and social processes of a company; they form the drivers of profitable revenue growth. Increasing revenues through singles and doubles build a growth mind-set throughout the business, so that when the opportunity for a home run does come along, you’ll be better prepared to take advantage of it.” Ram Charan