Brands and start-ups told to collaborate as ‘you are both in the survival business’
Established brands and start-ups have been urged to collaborate more closely after being told that such partnerships could ensure the survival of both.
Joseph Jaffe, chief executive and co-founder of business matchmaker Evolution, insisted the marketing professionalism of brands and the creative minds of start-ups should join forces.
Too often start-ups are left to flounder with no access to cash when they could provide the answer to a brand’s creative problems, he said.
“Start-ups are full of ideas but they have got no money. The brand, you have money, but you have no ideas and you guys are looking for ideas to cut through the clutter,” Jaffe told marketers at the Association of Data Driven Marketing and Advertising Global Forum in Sydney.
“Early stage start-ups have the engineers, the designers, the developers, the coders, but they don’t have the marketing talent that you guys have, ” he added. “You have the marketing professionalism.
“You both need each other. You are both in the survival business.”
Brands should not only collaborate with start-ups but even consider acquiring them, he added, with such a move the possible difference between failure and survival.
“What if Kodak had acquired Instagram. Might they have survived?” Jaffe asked.
Jaffe revealed that of half a million start-ups which launch in the US every month, 97 per cent “never get beyond the valley of death” and fail because they can’t get funding.
Delegates heard that with marketing budgets under pressure, companies need to innovate – which is where start-ups come into their own.
“Our budgets aren’t growing, they are stagnating or getting cut. We need to produce more with less and more from less, that is the reality of our business so we have got to become more creative and innovative and be able to create new approaches. We have to do things differently to get a result.”
He continued: “There are those sceptics who say there are no new ideas. But I reject that. I honestly believe that technology can solve any business problem. You come to me with a marketing challenge, a business problem, a consumer insight, technology can solve the problem. And at the heart of this technology based innovation is the start up.”
Earlier, Jaffe told the conference that marketers should stop worrying about what “the next big thing” may be.
“As we keep trying to figure out what comes next we get more and more desperate and more and more clueless,” he said.
Steve Jones
Thing about big brand vs startup is they have a far longer process to even start ideas or get them off the ground. I know because I worked on Enterprise level digital projects for over 6 years in the Australian market. Here is a normal big brand process to get a project off the ground, the more complex the brand the longer the process is drawn out – http://m.c.lnkd.licdn.com/mpr/.....6dff42.jpg
I think the example where they split the marketing budget and give 10% to startups is a good idea to set a side project for branding, yet full integration into a big brand is VERY complex.
User ID not verified.
Brands and agencies do need to be working closer with startups – but it’s a massively harder thing to do than say.
There’s many reasons for this – timescales, access, and alignment of strategies being the main ones. And Jaffe fell for the biggest reason I see with marketers and agencies wanting to work with startups – a misunderstanding of what it actually is that the startups do.
Startups don’t solve problems, they find them. If agencies and brands (and keynote speakers) don’t get this, everything else is trivial.
There are a few agencies and clients that understand and work well with startups. There are many who just want to be seen to be working with them. Thankfully we’re slowly seeing more of the latter, but there’s still a an order of magnitude more talk than action.
User ID not verified.
The advantages of co-branding in advertising extends past start ups. Virgin Mobile have joined with Oz Harvest in their new “making mobile better” campaigns
User ID not verified.