Companies should actively seek to buy from startup vendors.
Large companies in particular do themselves a disservice by avoiding startups. Procurement departments often have vendor requirements that make selling to large companies a nearly impossible task for a startup.
Instead of de facto prohibitions on purchasing from startups, companies should actively seek out startups with innovative products and all-star teams.
Here are my top 4 reasons why you should actively seek out startups as vendors (as if those two weren't enough).
1) Startups Care More
I know. "Caring more" by itself is not enough. But look at what "caring more" means for you. It means that your problems, issues, and concerns become their mission. Just read this post from commercial real estate firm 42Floors, and you'll see why caring more makes them the only commercial real estate firm you'll ever use. They call it their home! If you're looking for office space, is there any other company that understands what you're going through more than 42Floors? Give them a call.
2) A Startup's Only Mission is to Create Value for Your Company
A startup's primary goal is to figure out how to deliver maximum value to you. Their success is inexorably linked to your success. By definition, they don't have a massive bureaucracy between their people and their customers. Here's how Cratejoy pushes bureaucracy aside to take care of their customers:
3) Startups Take Risks For You
At one point in their history, AirBnB literally helped people rent air mattresses on the floor of someone's home. Today they're one of the fastest growing travel companies in the world. I don't recommend you suggest air mattresses as a way to trim your corporate travel budget. But maybe you'd have happier teams if they stayed in a home instead of a hotel. Then be glad they took that risk so you didn't have to.
4) Startups Crush Established Pricing Structures
Stripe simplified credit card processing fees from a complex formula to a simple, transparent fee. Square gives away free credit card readers that turn an iPad into a cash register. Casetext offers a free alternative to otherwise very expensive legal data. Startups can very often provide better value to you because they don't surrender to the idea of, "that's just the way it works."
Large vendors succeed by executing to a known plan. Their size and momentum is their biggest strength but also a hurdle to innovation. Large vendors can't follow an idea just to see where it leads. Startup vendors bring innovation to you so you can succeed.