Why do established organizations want pilot projects?

Nov 2017

A continuing series on pilot project strategies for B2B startups…

If you are an established organization, whether for-profit or not-for-profit, that is considering running a pilot project with a startup, then you are seeing things from a somewhat different perspective than the startup. You know your industry, your business model, your priorities and your budget. Yet here’s this scrappy little startup telling you things that you may (or may not) already know and trying to convince you that they are critical to your future and that they see things out there that you may not be aware are problems.

For the organization, it’s important to remember a few key things regarding startups:

  • Startups are not small versions of big companies.

Startups don’t have the time, money, resources, processes or anything that you are used to in a larger organization. Don’t treat them like a big company. Recognize them for what they are.

  • Startups have made a series of critical (and sometimes fatal) assumptions.

Startups are often nothing more than a series of assumptions that have to be validated by the entrepreneur. This includes assumptions about their ideal customer, their value proposition, their revenue model and more. Read “The Lean Startup” and research this area to learn more. 

  • Startups need you but you also need them

Through pilot projects, startups gain valuable insights into technical, process, and quality requirements and the workings of an actual organization, which helps them become savvier and more adept at business development. But the organization can also gain much from the experience by identifying important trends, tapping into new technologies and identifying potentially future organizational talent. 

  • Gaining insights

Done correctly, a pilot project can help you gain valuable insights into your industry and give you market intelligence that you don’t currently  have. Hopefully the startup is doing a significant amount of market research and see you and your competitors as fruitful opportunities. Might you gain a competitive advantage by deploying a upstart solution? A pilot project can help you determine that.

  • Access to the startup world

It’s increasingly important for established organizations to get and stay connected to startup ecosystems. Pilot projects become a great way to do that. Ask the entrepreneur to provide you a perspective on this, what meet-ups you should attend, what other resources are available to larger organizations to help you tap into some great minds in the ecosystem.

  • Key resources

You should always be on the lookout for great talent. Consider that the entrepreneur may have something your organization needs strategically. This is a good time to road-test them and to see if you want to potentially gain both the solution and the people.

Startups and established organizations can establish symbiotic relationships with mutually beneficial outcomes. Working together to achieve common goals, moving beyond the traditional vendor/customer relationship, is critical to finding mutual success.