The Startup Advantage

The number of startups I’m seeing is almost unprecedented and, while we are seeing consolidation in the partner base, there are thousands of new solution provider organizations being formed as part of this revolution.

For solution providers young and old, I believe there is a unique opportunity to gauge the new supplier base and capitalize on the need by those vendors to build channel relationships and sales.

Within a stone’s throw from my own headquarters in Framingham, Mass., there are seemingly hundreds of storage startups. Increasingly, these companies are seeking the services of UBM Channel to identify, sign and manage the right partner base. I’m also seeing and getting calls from many other types of startups every week that are looking for advice on how to build a channel.

Some of these companies already have built a brand and a following among small businesses and are trying to move up to midsize accounts as well as the enterprise.

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The reason I bring all this up is that creative destruction is a fact of life in high-tech, and many of these startups are exploiting a weakness among the larger players. It’s the reason we see so many of them being acquired by the big brands that face “The Innovator’s Dilemma” described so well by Clayton Christensen in his book of the same title.

Startups are the lifeblood of this industry and are the reason why technology continues to get pushed forward so quickly. Over the past decade, a lot of that innovation was stifled by a tendency to sell the companies rather than take them public. But the tide is shifting, and we are seeing more companies wanting to get to the public market rather than merely be swallowed up by the big players.

Solution providers can benefit by taking on newer suppliers that fill a unique niche. I’m a believer that solution providers of all sizes need to find some time to seek out and vet these potential new suppliers. The reality is it will result in few new additions, but those that are brought on can be very important for growth. In addition, it’s important for no other reason than to stay current with what’s happening in the market and be able to talk intelligently about the latest trends with customers.

One way to approach this is to look at areas of competency today and look to add complementary products. For instance, if your business has a strong physical infrastructure storage practice, can you add a cloud element by evaluating a newer player? If you’ve concentrated on server virtualization, can you move more into virtual desktops with additional products?

One of the advantages of working with a smaller startup-type company is that your large established big-name suppliers tend to dismiss them and, as a result, don’t get as nervous about your efforts there. That means less tendency by them to put the pressure on you to pull back your efforts.

One of the downsides to working with a startup, however, is that you are going to have to carry the ball, as it may not have the resources to support you in the way you’ve been supported in the past. You also need to watch the health of any startup to be sure you are not putting your customers at risk with a company that may not be around in the long term.

But it’s an exciting time in the world of startups, and it’s a world you should think seriously about how to participate in.

BACKTALK: Make something happen. Robert Faletra is CEO of UBM Channel. You can contact him via e-mail at [email protected].