How a Large Customer Can Kill a Startup
The problem is not having large customers. Large customers are great, the biggest sign that you&#x27;ve actually made it. Large customers have deep pockets, it&#x27;s like the business version of rich friends. They don&#x27;t mind paying extra, even multiple times as much for you to go out of your way even a little. Rich people, and big companies, usually understand the value of your time and have the money to compensate you well.<p>The key is dealing with them properly, which this article implies is impossible. It may well be impossible for a start-up without employees who have dealt with these relationships before, but it&#x27;s business as usual is the corporate world.<p>The most important thing to remember is the distinction between a product company and a consulting company. When dealing with large customers you need to draw the line and stay firm. As a start-up, you&#x27;re almost certainly a product company, and you should not customize your core product for anyone under any circumstances. If they want something customized &quot;that bad&quot; offer to sell yourself to them. Walk away with a bunch of money to start your next adventure and a corporate friend that&#x27;s probably willing to do you some favors.<p>That said, if they&#x27;re going to throw money at you, might as well find a way to take it. This is when you build a stellar API, or even better, build your whole product on top of an API and offer blessed access... For a price. Your best bet here is to either partner with a consulting company or divide your company into two parts, one that makes the core product and the other that makes customizations.<p>The rest of my advice is a few general things for dealing with big companies that startup land might not know.<p>Number one is to make sure you&#x27;re charging enough money. I worked at a rapidly growing consulting agency once and we had the problem of too much work. We simply could not hire and train fast enough to keep up with our sales pipeline. We could have done the naive thing and paused our sales pipeline. Instead, we charged more money. Twice as much per hour at first, then almost 3x. Any new work coming in had to be at a vastly increased rate or we simply didn&#x27;t take it. Our reasoning? We were honest, we had too much work and the premium was to pay for overtime to get your project finished. We ended up vastly more profitable, we could offer more for the job positions, we could hire more experienced devs that didn&#x27;t need training, and afford even more marketing. It&#x27;s been less than 2 years and that single dev shop is now ten full time devs and still growing rapidly. A side benefit, we started working with bigger companies with deeper pockets because they were the only ones that could afford us. Not sure if there&#x27;s an economic theory on this but it seems like the middle market is where all the competition is. If you&#x27;re either at the bottom or the top it&#x27;s a lot easier to make money. Remember this when making you&#x27;re SaaS. Serve the bottom with your boilerplate product and the top by building stuff on the side for the big dogs. It&#x27;s much harder to lose this way.<p>The other thing about big companies is that sales are more personal, not less. Large companies are more stratified, more organized. At a big company the decision of whether to buy your product likely rests with one person. Make sure this person likes you, a lot. When meeting with them send the guy he likes the most even if it&#x27;s the janitor. At big companies the chance that the person buying your product is the one who will use it is minimal. While the quality of your offering still matters the most important thing is whether the guy buying it is going to enjoy dealing with you for the next ten years.<p>This ended up a long diatribe but I disagree in practice that having big customers is a bad thing at all, and argue that it&#x27;s actually the exact opposite as long as you know how the handle them. I have worked at small companies with big clients and the name value alone (if they like you enough to allow you to use them as a reference) is enough to open most doors. Nobody questions your product or team if one of the largest most prestigious companies in the world is your client. It&#x27;s the business version of getting a 4.0 at Harvard.