What is a "big deal trap" that startup companies tend to fall into?

byopus moreschi

For startup companies that we have just created, we will utilize special technical capabilities and ideas to deal with large companies "Big Deal"Is a very attractive thing as one big passing point. In some cases, there is also a big deal that you can ask "acquisition of business itself", so there are not many startups that are launched for the purpose of selling business in large cash from the very beginning. However, "It is dangerous to stick too much to start-up companies", a venture company intermediating individual teachersTutorspreeCo-founder and venture capital with a small investment in start-up companiesY CombinatorIt is also a partner ofAaron HarrisMr. explains.

Big Deals
https://blog.ycombinator.com/big-deals/

"There is nothing as dangerous for startup companies as" Big Deal. "Unlike a big deal at a small startup, Big Deal signs one of the agreements with many huge companies, It's about life and death of startup, "Harris said. Mr. Harris, who signs a partnership with a Y combinator who invests in a venture company, seems to have seen a number of cases where startups ruin their bodies very much as they stick to the big deal.

Big Deal tends to be an excuse to founder startups to escape from other problems that must be dealt with urgently. "It is now a very serious big deal, so I do not have time to work on other tasks." In addition, even if it is pointed out that there is a delay in the product development of the key, it is said that without making a big deal there is no merit of product development, it will not start improving easily.

Also, Mr. Harris points out that investors investing funds for startup are also factors that startup sticks to the big deal. Investors say to the founder of startup, "If the Big Deal is formed, we will give as much money as we can." It is natural for investors to hold a big deal, since there is no need to carry any risks, there is no need to shoulder the risks like this, so it is natural for them to say such a thing to the startup "If all big deal is established all problems It will make me think it is "to solve."

byElin Schönfelder

In the startup Mr. Harris saw, startup to do application development that accesses user's financial information and analyzesPlaidFounder ofZac · pelletMr.'s example is a good example of not sticking to the big deal.

Mr. Pellet confirmed that "it is necessary to make a direct contract with the bank in the end to make the startup successful," but a small startup will sign a direct contract with the bank within two years I knew that it was impossible. Therefore, Mr. Pellet started discussion for a direct contract with the bank, and at the same time, he developed an application to acquire account information for companies to pay salary, and gathered funds little by little to make startups bigger.

A contract with a bank was established when Plaid grew sufficiently and funds were able to be raised. Mr. Pellet suddenly made a big deal and did not optimistic when the business took the orbit, first of all, we developed the application to raise a small amount of funds in order to survive the start-up. "Most of the startups looked at only the final big deal and abandoned other things, but in the case of Mr. Pellet it was different," Harris says.

bySteven Zwerink

Startups targeting the future big deal will not focus on small fundraising or business growth. Those jobs may be felt relatively insignificant compared to big deal, but firms are gradually progressing little by little. The startup that has grown further in this way allows you to establish a Big Deal contract with a natural flow.

Mr. Harris watched the startup, the Big Deal was established in a step further, and the conditions necessary for the Big Deal brought out by business partners were not perceived as a problem one by one. A year after the negotiations began, the startup succeeded in the big deal. Mr. Harris and others also said that they thought "This is a goal", but that startup could not in any way achieve the final requirement required for the contract to be put into execution.

Eventually, although the startup established a big deal, the startup itself collapsed without reaching the effect. Mr. Harris says, "Here we can find a big reason that startups should not stick to the big deal."

byCafeCredit.com

First of all, the big deal is not a big deal for large companies. For large start-ups that are so inaugurable, even large transactions that will influence the future fate are only one of many transactions for large companies that grow well and develop businesses. Even if a large company makes a talk, I do not know if it really truly considers startup tie-ups or acquisitions, or just a little start-up business. For start-ups, Big Deal may be all, but for large enterprises it's almost not that important.

Secondly, "the large enterprise is very complicated in the process of commencing trading, and many departments involved". Each time the transaction progresses, the number of people involved in different departments will increase, and startup will need to convince all concerned parties. During that process a very large number of specification requirements are issued and the corresponding startups will use time and expense. Large enterprises have capital and time, so even if it takes time for the big deal, there is no problem with normal startups, but there is no physical strength to survive this.

byThe Elite Ayrshire Business Circle

Mr. Harris said that startups should be kept in mind that they stick to the big deal often and that they should be kept in mind and then point to the necessary points to make the big deal succeed.

Startups are effective for advancing the big deal by using founder and member's own brand. "The founders of startups should have great strengths other than startup projects, based on the founders 'own achievements based on the founders' own achievements, founder such as tens of millions of large enterprises to withdraw funds of hundreds of millions of dollars It is a good example of that, as long as the founder himself has not had much experience and can not proceed with negotiations with a large company in a favorable manner, he should not stick to the big deal, "Harris said.

Sometimes the big deal misleads the founders themselves as "they are in the middle of a big deal now", sometimes crushing startups. A founder who is well acquainted with his own brand can grow up startups without being influenced by external forces, but if the founder is pursuing a fantasy that founder does not do, the startup is over It might be that it is close.

bySchezar