Support start-ups to create value and contribute to the development of supplier ecosystems in an inclusive way – Innovations > Purchasing Strategy

For several years, start-ups have more or less successfully and easily hacked into the supplier panels of purchasing departments, without really finding the right positioning or the right management system. It’s interesting to lay the groundwork for a different approach to supplier relationship management and share associated best practices.

The start-up is a supplier likeare others? remember that start-ups are growth providers with potential, but also at risk. A start-up will need to quickly test its offer in the market and therefore exchange with potential customers. When the buyer finds a start-up, he has decided to compare his offer with the market and therefore with the customers. From that moment on, she will do everything possible to attract customers and time to market decisive, knowing that the solution/product may still be in the MVP (Minimum Viable Product) stage. It will then be necessary for the buyer to ensure the attractiveness and viability of the offer while already planning a possible collaboration.

For this, it is necessary to take into account the technological maturation times and access to markets that can be long and costly for a start-up. The link between stage of maturity and financing is a component to be taken into account in the evaluation process. A startup in the seed capital phase will not have the same financing needs as a startup that is raising funds (series A). Three criteria are predominant in the trajectory of a startup: founders’ entrepreneurial and managerial skills, financing capabilities, recruiting skills.

Start-up and buyer relationship: an asymmetrical relationship both in terms of objectives and associated deadlines

The start-up will very quickly seek to win over customers to develop the business volume while the company will seek to leverage the solution/product in its offers in terms of competitive advantage or operational performance. We often observe a discrepancy between the temporality of the approach and the objectives, which generates misunderstanding, tension and even difficulties. Therefore, it is essential to agree on the necessary time for the process once the relationship is built.

One of the founding principles is knowing how to stop the process and not stop doing it for both the buyer and the start-up.🇧🇷 For this, it is fundamental to demarcate the building of the relationship and manage to stop it because the key success factors are not met. The start-up needs customers and sometimes it’s hard for them to imagine the end of a customer relationship. For her, it is a growth lever, but she must know how to identify the “right moment” to acquire a customer account, as this can become an obstacle to her development.

The role of the buyer, creating the conditions for a balanced and adaptable collaboration

As a preamble, the buyer needs to identify whether there is strategic alignment with the start-up, as this is the key to building or ending the relationship. The main challenge for the buyer is therefore to create the terms of a evolution of the collaboration over time based on the assessment of the start-up’s growth trajectory🇧🇷 Over time, purchasing departments have had to adapt to integrate these suppliers into a Supplier Relationship Management approach, again here examination of the usual criteria was not appropriate. Let’s take the example of risk analysis, it must also integrate the start-up’s growth potential, the competitive advantage it brings in order to mitigate risks in favor of value creation. A different and differentiated approach to sourcing is therefore necessary, in order to properly qualify the start-up and its potential to define the challenges adapted to the relationship.

The Intrapreneur Buyer, Skills Needed to Create Shared Value

To succeed in establishing value-creating relationships with startups, the buyer will become an intrapreneur and must be able to quickly identify the startup’s stage of development and potential. He will get to know how your company works, the business challenges, the expectations of end customers, your company’s strategy. He will know how to “sell” your company externally, build and understand a business plan/product roadmap/business model, etc.

He will have been trained in the following methods: ideation, lean startup, design thinking, profit center management, open innovation 🇧🇷

It will integrate co-investment, exclusivity, cross-business, expertise contribution approaches into its strategy.

A polymorphic profile exercised in business management with an entrepreneurial mindset!

Relationship Improvement Areas: Collaborate Differently!

  • Develop a new approach and change the “buy to sell” mentality
  • Establish a relationship co-creation process
  • Use a SURM (Startup Relationship Management) tool
  • Define the value brought by each one and share the expectations
  • Find a financing method adapted to relationship challenges
  • Work with the test and learn method (POC, MVP, …)
  • Agree to stop a project or collaboration
  • Analyze risk for value creation potential
  • Be bold in the process
  • Define a scalable contractual approach
  • Build collaboration based on regularly sharing information (examples: product roadmap, business plan, customer acquisition strategy, recruiting plan, etc.)
  • Define a specific sourcing process (identification, qualification, selection)

Startups represent a strategic lever for the digital and cultural transformation of society. Furthermore, this approach is fully integrated with a responsible sourcing approach to developing a supplier ecosystem. Ultimately, the start-up/buyer relationship must stop being an issue and become a lever for the company’s performance and growth!

About the author 🇧🇷

Raphael Belliere

Raphaël Belliere – Lottier (Doctor of Management Sciences) Deputy General Manager responsible for Purchasing, Digital and Innovation at MEOGROUP.

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