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Saturday, October 5, 2013

Relationships can make a difference in your startup

Great relationships can be a great neutralizer in getting deals done!
A few years ago, a corporate real-estate executive learned that a Fortune 50 company planned to create a new facility.  The billionaire executive had many friends one of which relayed the message about the need for a new location.  Repeated attempts to arrange a meeting with the Fortune 50 Company failed, so the executive flew up and requested to meet in person. Discussions eventually led to the topic of the Fortune 50 needs.  At this point, the upset CEO of the Fortune 50 Company indicated there were only a few people in the world that knew about the search for a new site. The CEO asked who informed the real-estate executive about the search and then escorted the billionaire out of the office.  Obviously, no deal came from the discussion.

Two things are apparent from this story; 1) the real-estate executive had a great relationship with someone affiliated with the Fortune 50 Company and received confidential information, and 2) the executive did not have a relationship with the Fortune 50 executive.  The approach was risky but may have yielded a positive result had confidential information not been passed along.  Anger about the breach of confidence cut discussions short resulting in insufficient time to develop a relationship that might result in a deal.

In a different example, an administrator joined a smaller university to help build the institution to greater prominence.  The administrator had made many friends over the years and was known as someone that was worthy of trust.  In the first year, the administrator engaged with a different Fortune 50 Company about establishing a significant research program.   The Fortune 50 Company was already investigating such an arrangement with top Universities.  The corporate executive responsible for developing the program knew the administrator on a personal basis. Great trust existed between the two.  The trust was so great that the corporate executive went to the CEO and pressed that the research programs occur with the smaller institution. When asked why, the executive simply stated because “I trust the administrator to deliver as promised.”   

In the second example, there was no reason for the two institutions to get together except for the high level of confidence created over years between the two individuals.  A program was created that complemented what each side wanted.  The two enjoyed working together and had done so in the past.  When the University President asked the Administrator how such a great deal was created with the institution, the Administrator simply answered, “the Company Executive trusts me to do what we agreed to do!”

The moral of these true stories is that you may be able to beat the Big Companies at their game by developing lasting great relationships.

  Taffy Williams is the author of:  Think Agile:  How Smart Entrepreneurs Adapt in Order to Succeed to via Amazon