Wednesday, February 05, 2014

Tullman: Startups Underestimate Corporate Culture at Their Peril

Tullman: Startups underestimate corporate culture at their peril

The elusive corporate contract may seem like the Holy Grail to a founder looking to make the next payroll, but startups often stumble by mishandling big-company culture, 1871 CEO Howard Tullman told a group of entrepreneurs.
Tullman, the keynote speaker at IBM's Global Entrepreneur Day in Chicago on Tuesday, said navigating the corporate culture is almost as important as getting the product right.
"The startup culture is more about survival and existence," he said. "In the corporate culture, peace is more important than progress."
As an example, he said startups shouldn't charge into a meeting with a large organization and talk about what a radical change their product will bring about. The corporate bureaucrat hears that, Tullman said, and thinks about risk and high costs to re-train people.
"Tell me how easy, familiar and fail-safe it will be," Tullman said.
Still, landing corporate partnerships is worth the effort, precisely for the same reasons it is so difficult. Tullman said that once a small company's product or service becomes integrated into a large corporation’s strategy or systems, it becomes entrenched.
"Integration is the last great lock-in," he said.
Big companies don't want to be pioneers and are more comfortable being fast responders, Tullman said. This means a savvy entrepreneur can play upon what he called "FOMO" — fear of missing out.
"You might have to wait" is a great thing for a startup to say, Tullman joked.
Tuesday's event was part of an IBM program aimed at helping entrepreneurs and letting IBM hear their ideas, said Kurt Peckman, who manages IBM Innovation Centers in Chicago, Dallas, Austin and Silicon Valley.
"Gone are the days of us just preaching to them," Peckman said of startups. "We want to learn from them."
Tullman extolled the virtues of the "strategic partnerships and collaboration" that can grow out of events like Tuesday's, but he also noted that corporate innovation departments often aren't the places to go looking for deals. They aren't where you find the real money and real decision-making power, he said.
He said he tells anyone who will listen that "the scarcest resource for the entrepreneur is time." Endless meetings with people who aren't in a position to make the deal is a potentially fatal waste of time, Tullman said. This idea was at the heart of the title for his talk: "You don't want to be dealing with the monkey when the organ grinder is in the room."
Tullman also noted that entrepreneurs must guard against their own tendencies. He said they aren't always good negotiators and are "really good at self-delusion." This makes it very important to have experienced advisors who can offer valuable perspective.

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