Are Your Procurement Processes Startup Friendly?

One of the most important ways that you can work with startups is by becoming their customer. But you can't just become their customer using your standard procurement processes.

 Your standard procurement processes are designed for maximum efficiency and consistency when dealing with established vendors. And they will not necessarily work so well when it comes to working with a startup. So if you want to develop a startup friendly procurement practice, the most important thing is to understand how startups sell and then how you can fit into that. 

The first thing that a startup has to deal with when it comes to selling is the fact that its products are still being developed. It doesn't necessarily have a catalogue from which you can just pick one, two or three items. It's going to have deals that are custom, that are going to include things like non-recurring engineering, or side agreements or all sorts of unusual elements that your standard procurement processes don't necessarily deal with.

And so you're going to need to develop a far more flexible procurement process that has the ability to adapt. You may in fact have a different contract with the startup every year simply because the products are changing so quickly. And a procurement process that assumes consistency and constancy is not going to be able to handle that.  

If you want your partnership with a startup to survive and thrive, be conscious of the amount of time and effort your processes demand from the startup. They don't have the same level of resources you do, and the time they spend dealing with unfriendly procurement processes could be better spent selling to other customers or strengthening their product. Don't inadvertently be one of the causes of stalled growth at a company you chose to partner with.   

One way to get a better sense of what it would be like to work with a startup prior to engaging is to perform additional due diligence and get an outside opinion on how well your current processes allow you to succeed in your startup partnerships.   Inside the community, there are myriad ways that we can assist you and your startup partners to build an effective and scalable partnership.