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IT execs say working with startups is worth the risk

Johanna Ambrosio | Oct. 5, 2012
Working with startups requires a lot of legwork and knowing how to manage the risk. But the rewards can be great.

He's talking to "a couple" of companies in this niche, he said. "We call it: Data for the little guy."

Fox, too, is using Big Data tools, some from startups and others from more established firms. There's an initiative to track the studio's top 5,000 end customers, McKenzie said, "So we're working with a variety of vendors," she explained. This includes sentiment-analysis vendors as well as Hadoop suppliers and others.

Do your homework

If your goal is to get to market faster via a startup's technology, make sure you "do due diligence," McKenzie said. "There are a lot of things they may not know how to do -- a contract, for example. Everything can be more cumbersome," since it's unchartered territory for a new company. One of the things that makes startups so nimble can be a lack of process, but that's something most larger organizations require.

Also, IT leaders will likely need to train the startups on how best to work with them. "I can't tell you how many times I get an email saying 'I'd like to show you my product -- are you free for an hour next week?' " said JPL's Soderstrom. "There's no way I can do that -- I'm already triple-booked with meetings."

A much better approach, for him anyway, is to request a 15-minute Skype video session. "Talk to me, find out which problems I'm trying to solve."

McKenzie agreed. "They have to talk about the business, same as we do. I can't talk technology to my internal customers." One startup came in to pitch her a certain product for a specific situation. But when she saw it, she knew it would be better for something else. "So we had a back-and-forth; we modified his original idea."

Something else to work on with a startup, Soderstrom said, is the amount of time and number of licenses you can use to test the product or service. "In my world there's a very long sales cycle, so giving me one unlimited license for a month is useless," he said.

Instead, "give me four licenses for six months." That allows him to show the product to others in his group -- and beyond -- which generates some excitement and demand for the product or service.

At some point, though, you just need to jump in, said Intuit's Goodarzi . "We look at the startup's technology, the gap we have internally and whether it will be a cultural fit," he said. "But you just have to lean forward and play offense. Be thoughtful and manage risk, but don't spend too much time on it."

Where the startups are

 

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