Startups that pitch to corporates should be wary about pivoting their business just to accommodate a corporate, if they risk losing focus on their initial values, cautions Carol Atkinson, the managing partner of Integration Exponential Ventures at MMI Holdings.
This is one of Atkinson’s key tips for startups looking to pitch their web platforms and apps to corporates such as MMI (which includes insurers Momentum).
In her 17 years with MMI, Atkinson has been involved in diverse areas in the company — from product design, to development and implementation. She previously headed up the group’s SMME segment and has been working specifically in the disruptive innovation space since the inception of Exponential Ventures in 2015.
“Over the last year we have probably had around 11 pitches per month to our disruptive innovations unit, Exponential. The solutions have been varied from engagement solutions, Internet of Things (IoT) solutions, new age insurance products and alternative distribution opportunities,” she says.
Startups must think twice about pivoting for corporates says MMI Holdings manager
In an extensive Q&A as part of Ventureburn’s series on pitching to corporates, Atkinson details how tech entrepreneurs can improve the way they deal with corporates.
Ventureburn: What are some important tips for startups looking to approach Momentum with their idea for an app, widget or platform?
Carol Atkinson: It’s not always just a great idea or concept that would move a startup forward, but this is extremely helpful in pipeline deals and for future business framing. In our experience, startups in growth phase usually have easier integration into large corporates.
A startup in its growth phase would already have the concept tested, acquired clients and generated revenue, which gives them a sound basis to interact with.
VB: What channels should they go through and what kinds of things should they have prepared and got in order before approaching Momentum with their ideas?
CA: The biggest “win” for us is when the concept has already been market tested. This enables the corporate to envisage the exact capabilities the startup has to offer and can visualise the end result.
South Africa has a multitude of acceleration programmes, which provide a great platform to test their concept and receive mentoring prior to approaching a large insurer. It is also good to be prepared with a business pitch or deck that highlights the main elements of both the solution and business model.
Having a demo is a sure way to be able to demonstrate the capabilities of a startup. This all adds to providing a common understanding at the outset of what potential opportunities would look like.
VB: What is the process one usually follows when one is trying to sell a product or service to Momentum?
CA: The startup will approach the innovation unit or division relevant to their offering. They should be clear on the value of their capabilities and many startups express themselves in the challenges they are trying to solve for. They would have to have thought through their business model, solution pricing, where they fit into the value chain as well as what tech they use.
Based on an initial exploratory meeting, if it is determined that there is an opportunity for both parties, it would then probably be explored with a broader group from MMI, which would include subject matter experts, distribution or any other relevant players.
Once the agreement of opportunity has been agreed (sic), MMI would then consider doing a proof of concept or discovery. Our methodology is to keep this short with very specific hypotheses to be tested. Based on these outcomes, a decision to continue to move forward and commercialise would then be made.
VB: In general, how can startups improve the way they deal with corporates? Are there certain things that make them look more professional?
CA: They should be succinct in their actual solution, clear on what they’re solving for, have a refined business model and be capable of interacting at multiple levels within a corporate — not only at an executive level, but also at a communications and operations level.
VB: What are some common mistakes from startups that want to sell tech products or services to Momentum?
CA: A common mistake startups make is when they try to get integration based only on ideation. It is preferred that they test the environment themselves prior to approaching a corporate.
Another common mistake they make is to pivot their business to accommodate the corporate in such a way that changes their focus, causing them to lose sight of the values and qualities that they intended to represent — what made their offering unique to begin with.
VB: How many pitches do you currently get from startups per month on average and what kinds of services and products are they usually pitching?
CA: Over the last year we have probably had around 11 pitches per month to our disruptive innovations unit, Exponential. The solutions have been varied from engagement solutions, Internet of Things (IoT) solutions, new age insurance products and alternative distribution opportunities.
VB: What kinds of (innovative) services and products is Momentum looking for?
CA: We have a penchant for solutions that will enhance the financial wellness of people, their communities and their businesses. We also continue to try to address some of our challenges and opportunities through startup integration, helping to move the MMI dial forward.
VB: What is your view on tech startups and the role that they can play in helping corporates and, secondly, the role they can play in developing South Africa?
CA: Startups play a substantial role in helping the industry become more client-centric, generally solving problems in a different way thereby complimenting rather than competing within our value chain. They not only solve things in a different way they also do not have the legacy systems to hold them back, so we find they are nimble and agile in their development cycles and offerings.
VB: What are two or three really big trends that you reckon startups should be onto in coming years in your particular sector — ones that represent new business opportunities for startups?
CA: IoT (Internet of Things), AI (artificial intelligence) and blockchains.
Read Ventureburn’s series of Q&As below on pitching to corporates