You’d think the biggest corporations in the world would have no trouble acquiring top-of-the-line mapping technology – but think again. More and more, mega corporations are leaning on startups to supply the best technology, especially when it comes to mapping and imaging.
For now, this is a very symbiotic relationship. Startups are getting major contracts while making a name for themselves, and corporations are getting the support they need at a relatively affordable price. What could go wrong?
Well, a lot for the corporations. There will come a time when everyone realizes the startups no longer need the corporations – but the corporations still need the startups. However, if corporations start following Facebook’s lead and buying every possible competitor or useful startup, they can still stay ahead. On the other hand, this might be the beginning of the startup golden era.
In June 2014, Google bought Skybox Imaging, a mapping startup, for the “modest” sum of $500 million – and they paid cash. Skybox is only five years old, and initially raised $94 million from a number of venture capitalists. However, in that short span of time, the small business managed to create applications with data analysis that blew Google Maps, well, off the map. However, Google isn’t the only corporation picking up bread crumbs. Here’s a great interview at Stanford with the Skybox founders.
General Motors is on the hunt to find a startup that can optimize the company’s mapping capabilities. So far, nothing has been found (officially), but GM Ventures is backing GeoDigital International, a small business with 3D technology that’s impressive to say the least. That technology is used to test self-driving cars and has secured a contract with a “major automaker,” but nobody is formally admitting to the partnership.
What this means for startups
Mapping technology is just one aspect that corporations are looking to fulfill with startups. Basically, if you own a startup and can deliver a product or service that corporations don’t have on their own – or you can offer the same faster or at a lower price – you’re in an excellent negotiating position. Maybe you don’t want to sell out, but when that price is half a billion in cold hard cash, that might change your tune. As corporations are showing more respect for entrepreneurs and small businesses, the playing fields are being leveled.
However, your competition is also getting fiercer, with startup hubs all around the country. Delivering something truly new under the sun is now a requirement in many industries, and it’s a bigger gamble than ever for startups. Knowing that between 80 and 90 percent of startups fail might give you pause, but it really just means you need to up your game:
• Research, research, research. Otherwise, you’ll be ill prepared, unknowledgeable, and might be re-inventing the wheel.
• Have a business plan in writing. Update it regularly. Don’t get too off course.
• Remember that diversity in a startup is the spice of it. Don’t hire based on friendships.
• Expect to lose money or (if you’re lucky) break even for several years – but never stop looking for investors.
Think you have what it takes to catch the eye of a corporation? It’s not so different from catching the eye of someone at a bar. You need to stand out in the right way, show off the goods but hold back a little, and don’t get distracted by the competition. If you know what you have to offer is great, use that as a foundation of confidence.