The days when businesses remain isolated are long gone. Today, every business is looking to form partnerships to grow its capabilities and reach. In the quest to deliver products faster and accelerate the pace of innovation, more and more IT leaders are looking towards startups for partnerships. Yes, startup partnership has its advantages and no one can deny that.
From nimble innovation to access to new skills, unique digital transformation strategies to a different perspective to look at business problems, emerging technologies to swift processes, the list could go on and on. Startups can teach you how to create a product at a fraction of the cost and deliver business value on a low budget.
Startups are more dynamic, energetic, flexible, and self-regulated. Just like everything else, there are pros and cons of startup partnerships. Sadly, most IT leaders don’t look at the dark side of startup partnerships and end up falling into a trap. As a result, the startup partnership ends up harming your business instead of benefiting it.
That is why it is important for both IT leaders and businesses to know about the perils of startup partnerships. If you are considering joining hands with a startup and want to know the troubles you could face then this article is for you.
In this article, Anti-Dos will learn about five dangerous traps you must avoid when working with a startup.
5 Dangerous Startup Traps To Avoid
Here are five startup traps you should be aware of when working with a startup.
1. Choosing Startups Only Based On Their Technological Acumen
The technological boom has led to mushrooming growth in tech startups. Some of them are really great while others are just riding the tech hype wave. Whenever you are trying to form a partnership with a tech startup, make sure you know how to differentiate between a great tech startup and a mediocre one.
Most businesses end up choosing a startup based only on their technology prowess without realizing what they are getting themselves into. It is better to conduct an in-depth evaluation of a startup before forming a partnership with it. This includes everything from knowing about their founders, customers, key stakeholders, and the platforms they use.
Just because a startup is good at technology does not mean that they are also flawless in other aspects. Look for gaps in other areas and if they fall short in other areas, you should look elsewhere. Form a partnership with a startup that specializes in multiple domains and does not just rely on tech. Such startups will help your business thrive.
As a business, you don’t want to form a partnership with a startup whose founders have a bad reputation or even worse criminal charges or fraud cases. No business would want to tarnish its business reputation because of the startup they are forming a partnership. Make sure you do your due diligence and background checks before signing the deal. This should continue even once you have finalized the deal.
2. Neglecting The Ups and Downs of Startup Relationships
Did you know that 70% of startups fail in the first five years? Yes, that’s right. This means that there are a lot of risks associated with startups. You might find a startup that is off to a great start but suddenly a major change is made by their founders to the business model or something else and their graph starts to nosedive.
Since most startups are funded by venture capitalists or investors, you will notice their influence on the way day-to-day operations are performed. In some cases, these investors can force the management to take a turn or a different direction from what they are currently taking. This could also lead to their downfall. It is better to work with startups on a contractual basis first to evaluate all these things and when you are sure that there are no such issues, you can formalize the partnership deal.
As a business owner, you can not afford to take on more risk. The best way to mitigate the risk associated with working with startups is by working on projects where you have nothing to lose and everything to gain. Businesses that ignore the volatility of startups while considering partnerships bear the brunt of it.
3. Ignoring The Cybersecurity Aspect Altogether
As the number of supply chain attacks or third-party attacks continues to grow, businesses need to take cybersecurity seriously. If you are not careful enough, cybercriminals can break into your systems by using your third party or supplier as a ladder. That is why it is important to take your cybersecurity seriously as also the security of your suppliers and vendors. Use DNS DDoS protection and other security tools for foolproof security.
4. Not Taking Startup Talent Seriously
In order to secure funding or partnership deals with big businesses, most startups tend to make tall claims. They will even share their roadmap and strategy on how they can achieve this ambitious target. Some businesses might not believe them but they have few star performers that can lift their entire team. This allows them to push above their weight and achieve goals that might seem unachievable at first. They could be from any department such as sales, marketing, or IT but their impact was so huge that startups might struggle to find suitable replacements for them.
5. Overlooking Cultural Hurdles
One of the biggest differences between a startup and an enterprise is culture. The way an enterprise thinks about a particular problem varies greatly from how a startup might look at the same problem. It is harder for enterprises to accept any suggestion coming from a startup even if they are right.
Startups usually have fewer steps in their workflows which allows them to be more nimble and agile as compared to large-scale enterprises. On the contrary, an enterprise will move slowly but with more conviction as they have proven processes.
In short, you could find more things on which large businesses disagree with startups, and ignoring it could be the biggest mistake you could ever make especially when you are looking to form a partnership with a startup.
Which startup traps have you found yourself in? Share it with us in the comments section below.
