As we know small businesses are the backbone of America, and technology startups are pushing us into the future. We usually see the two groups as entities at complete opposite ends of the spectrum. Small businesses are usually simple businesses serving their local communities. Startups, however, are living on the cutting edge of technology and everybody is working to go from 0 to a billion overnight.
As a person who works with both small businesses and startups, I believe both groups can go further together. Small businesses have a challenge in that they lack innovation and technology to stay competitive in the marketplace. Technology startups can sometimes build a great product, but usually, have serious challenges when it comes to business development. Both groups have serious pain points that the other can help ease.
On the small business side, we’ve seen it time and time again, new technology completely disrupting industries. Netflix with the movie business, Amazon with bookstores, digital streaming with the entertainment industry and the list goes on and on.
The names of failed startups are not as well known, but any founder will tell you that business development is a real challenge and can be very costly. Unless you get to a point where you can raise capital or generate enough revenue to pay for marketing, getting customers can be a real challenge. If a company makes a great product but nobody knows about it, the company won’t go too far.
Let us take two companies, a traditional financial services firm and a new technology startup that’s helping automate retirement investing. Let’s assume this financial advisory firm has 10,000 customers and is your traditional retail brokerage firm. Let’s also assume the tech startup has a flawless product that works very well at cutting costs and effectively allocating capital for retirement. If the startup went to the small business and said hey let’s roll this product out to your customers and share in the revenues, the startup has potentially 10,000 new customers. Without spending a dime, the startup now has a decent sized customer base. On the flipside, the traditional business has a new scalable technology product to roll out to their customers.
The moral of the story here is that traditional businesses and technology startups can potentially go further by collaborating rather than competing with each other. Both groups can even collaborate in the idea phase. Once again traditional businesses have a customer base that they can use to get feedback about what type of products customers want, or pilot products together. The advantage the small businesses have is that they have an established brand and base. For the small business, it’s just a matter of sending out an email blast to all the customers encouraging them to use the new technology or asking customers what do they want.
We are working to help facilitate more situations like this. If you or someone you know would be interested in partnering with a small business or tech startup to roll out new products and better serve customers feel free to shoot us an email firstname.lastname@example.org.