The VC Field Guide

13Notes for Startup Customers

Not every company has a mission to be a customer of a startup but those companies that do try to work with startups can create a win‐win‐win scenario. In my experience, I have seen at least two different versions of sophisticated customers that work with startups. One version is the global organization or category leader that is exceptionally good at rallying the people within their organization to both identify really interesting solutions or companies and deciding which projects that they want to take up. And then they also excel at collaborating with a startup so that it's a win‐win for everyone. If the startup is early‐stage, then the customer can ask for an incredibly great deal and lock in a great price for a very long time. One example of a sophisticated company that works with startups comes from a very early customer of VMware back when VMware was in its early days. Because this customer partnered early in VMware's development, they were able to lock in a ridiculous price for a very long time. That made the customer look great because the customer was then able to use the cost savings of working with VMware for other things, while demonstrating how innovative they were as an organization. And VMware also benefited because they got to talk about how they had this amazingly sophisticated early‐adopter customer and how that customer helped them to find the roadmap. The customer got to help define their roadmap and also lock in a great price ...