Navigating After Takeoff: What Startups Should Know
(Part 2: An Operator’s Perspective)
Last month, we shared some insights and tips for early-stage founders seeking funding from travel-friendly investors. Now we’d like to fast forward to post-funding success — congrats! — with some perspective on how best to build out the business you pitched through proof-of-concepts (POCs).
POCs — especially for B2B startups — are important case studies to showcase your solution’s true potential and create a path to traction in the marketplace. A successful POC can become a calling card, opening doors and growing your company to the next level.
Our JetBlue Technology Ventures (JTV) team has extensive experience advising startups in the journey from proof-of-concept to implementation. Being a corporate venture capital firm, we blend an investor’s focus with an operator’s mindset and are committed to helping startups navigate customer relationships. Here’s some of our advice on how to accelerate initial success.
“At JTV, we’ve supported over 30 proofs-of-concepts with our portfolio companies and other startups.”
Create a plan for securing that first POC
The first step actually begins before an investment is complete. During the investment process, you’ll discuss product readiness and potential timelines with both the Operations and Investment teams. Once the investment closes and there is agreement that a POC is possible, now it is important to create a realistic plan that’s both adaptable to a variety of prospects and specific to the industry’s needs. Here’s some tips on how:
- Start with the end in mind. The proof-of-concept must give you sufficient data points to make your case for complete implementation. Your end goal shouldn’t be just a successful pilot — it’s a successful pilot that leads to a full implementation.
- Recognize questions and assumptions you must address. You may be confident in your solution, but a big operating company will have perspectives and questions from across departments (IT, legal, cybersecurity, and so forth). Be patient, humble, and adapt accordingly.
- Identify other potential applications. There are a lot of nuances to the global travel ecosystem. As an operator, we look for new ways that a startup’s technology could be used — and thus new target companies for a POC.
- Make a target list of prospects and companies. Who you choose to partner with can dramatically affect outcomes. The right candidate for your proof-of-concept should be fully engaged and represent a type of business that you’d target at scale. It should also be a company that gives you access to the metrics that you can use to showcase success to other prospects.
Find the right “in” and tailor your pitch
The right internal company advocate is usually the difference between a successful pilot and a failed one. This is a big strategic advantage of partnering with corporate venture capital funds — we can help to more quickly identify the right decision-maker within either our parent company or from other potential customers in our network and then make that introduction.
However, remember, while it is our job as a CVC to help find the right door and open it for you, it is up to you to walk through and pitch successfully. Once connected, it takes a tailored pitch to get people to believe in your product. You need to sell yourself to the organization and demonstrate a thorough understanding of their specific pain points. Don’t just tell — show real use cases. Spend the majority of your time pitching with those cases and have an actual demo to show your prospects how different departmental priorities align with your solution.
Keep in mind that you’re asking this person to expend social or political capital to advocate for your solution internally. You need to indicate your company is serious, capable, and in it for the long haul. Listen carefully to prospects’ questions and concerns, explain how you may address them, and demonstrate flexibility and a willingness to learn. Show that you can adhere to regulations and legacy systems.
Carefully design your proof-of-concept
Your proof-of-concept is mission critical. For operating companies, the POC functions as a test to see if the technology or solution makes a material difference in metrics that are important to them. Here are a few things to consider when designing your proof-of-concept:
1. Clearly define measures of success. Do your research — review public filings or press releases — to determine what KPIs are important to the company (e.g. cost, revenue, workflow, customer experience, and so forth). Arm yourself with the right lingo and clearly define how you will show impact on the customer’s challenges. The POC and contract should be structured to provide the data points that everyone needs to prove positive outcomes and be able to move forward with implementation.
2. Launch will take longer than you expect. We often see pitches that are overly optimistic about how quickly the POCs can be turned around. Don’t underestimate the time it takes to clear IT, security, legal, and other functions. Bigger operating companies take longer than startups. A CVC’s Operations team is your advocate through this process and will help remove hurdles wherever they can. This is one of the key benefits of being a portfolio company.
3. You should focus first on quality rather than speed. POCs give prospects the peace of mind that there’s a functioning product and that you’ve ironed out any kinks in actual real-world situations.
4. There’s no such thing as a free lunch. Your internal advocate has to build a business case to convince superiors (and colleagues) that this is a worthwhile investment. Startups need to help build that case. The overarching goal of the POC is to secure the data that leads to full implementation. That will make it much faster to secure funding and get to implementation faster.
We’d suggest developing a shared document that can be circulated with deliverables, measurements, buy-in, and other items. Transparency and clarity are your allies in designing a successful POC.
Be prepared to adjust on the fly
The only constant is change — strategies evolve, priorities shift, people leave. This is especially true in large organizations, so you must be prepared.
One risk is that you may lose an internal advocate. To reduce that risk, convince the team rather than just the decision maker. They are the ones that will run the implementation and it can be difficult if they don’t believe in it. Start with the decision maker(s) and then get people that work for them excited about your product. That gives you organizational staying power.
Remember that you’ll be working with people who are experts in their field and may have good ideas on how to improve your technology or the proof-of-concept. Use that to your advantage. Be clear that you’re there to learn and don’t alienate them by coming in with a know-it-all attitude. Be a good listener and build long-lasting internal relationships.
A few final words…
Startups need to be resilient, flexible, and thoughtful throughout the proof-of-concept process in order to ultimately nail that first implementation. A successful pilot leads to reference customers and mature product development. It’s a learning opportunity to improve the next POC and keep iterating until you have a clear path to implementation with a major brand that will open doors.
Corporate venture capital groups like us at JetBlue Technology Ventures are here to be your strategic partner on this early customer journey. We want to help you understand the complexities and nuances of an industry — and those that service it — so you can move faster, access more opportunities, and make fewer mistakes. Lean on us!