Start-ups are finding long sales cycles a massive frustration and the biggest challenge in their efforts to engage with clients. This problem came through loud and clear in a survey we ran as part of our #MeetTheNewKid event.
Overall, 48% of respondents stated that long sales cycles were at least a major frustration, and at worst an all out deal-breaker.
Going further, several start-ups told us about the issues they saw behind delays and blocks, such as scarce incentive for corporate ‘gatekeepers’ to support tech innovations:
“The biggest challenge with large corporates is that middle managers (procurement, IT, compliance, etc) have more personal incentive to block external innovation than to champion it.” CEO – FinTech Startup
One respondent exclaimed, with their hands raised to the heavens I might imagine, “Corporate Politics – it’s crazy.” Another saw blocks and delays as simple inertia, “Aversion to change is a major challenge.”
“Slow movement in large corporations, fear of the unknown,” and a feeling that “Corporates don’t seem to understand,” suggests that businesses and tech companies are not always on the same page.
Reading these quotes again really brings to mind Richard Anson’s observation that start-ups must rely on ‘Mavericks’ to get things moving in an unknown corporate environment.
Programmes and personal introductions could change everything
We created the survey to better understand tech start-ups’ major pain points and to identify where and how KPMG might be able to help. So I was keen to hear what start-ups thought would make a real difference when it came to working with big businesses.
Formal programmes scored highly in the wish list. Every start-up surveyed thought it would be helpful if corporates were more willing to pilot programmes. 91% said that formal programmes designed to introduce start-up and early stage technologies into corporates would be helpful, and 42% said these would change everything.
Personal introductions were also rated as a big help by 85% of respondents, with 45% saying they would change everything. This tallied with a common problem – finding the right people and decision makers was a challenge for at least 70% of start-ups.
We would like to extend our thanks to everybody who took part in the survey. It’s certainly given us a lot to think about and I look forward to sharing our ideas and plans as soon as possible. You’ve told us about your pain points, we have heard, and we are working on ways to help remove them. So watch this space!
In the meantime, here are three deeper insights from the survey:
A complicated picture
While corporate procurement was seen as the biggest deal killer (10% of respondents said it caused more deals to fall through than any other single factor, and it challenged start-ups at all stages of development), that being said, “better understanding corporate procurement” was seen as adding the least value, overall.
After sales is the big ‘post contract’ challenge. Start-ups that have completed deals reported having the most trouble with after sales support. I wonder if this is because support isn’t considered sufficiently at contract stage or because start-ups don’t fully understand corporate needs until later in the process. Perhaps this is something to investigate next time!
Follow me on twitter @jonathanroomer for more facts, ideas and observations.