Why Goliath should work with David

A lot of the start-up blogs that I read talk about how small businesses can beat big ones by being ‘disruptive’ and more ‘agile’ than the incumbent market leader. Whilst this may be true in some cases, it’s not always healthy to pit one against the other as sworn enemies and there can be huge value in big and small businesses working together to mutual benefit.

One of the biggest problems that start-ups have is a lack of money. Meanwhile, big businesses may have the money but not enough time to experiment, innovate and take risks on developing new products in-house as they’re so busy servicing their existing customers with products that are already a proven success.

So, there is a definite win-win if big and small can work together on new projects. For example Sage (the company I work for) is the UK’s biggest business software company, and with a background in working with start-ups, one of the things that pleased me the most when I first joined was to see just how many small (and local) businesses we use as suppliers, providing them with much-needed finance in return for expertise and creativity that comes from looking at a problem from a different perspective, from the outside in.

The important and wide-ranging support that big businesses can provide small ones through their supply chain is something that I feel deserves more recognition in the UK, especially if big businesses make a commitment to pay their suppliers quickly. This is something that small business champion Tony Robinson OBE has been campaigning for over the past few months, asking all corporates to pay their suppliers within 30 days instead of 60 days or more which some of them are guilty of doing.

In addition to using small businesses as suppliers, big businesses are sponsoring incubator and accelerator programmes around the world to provide them with new insights and ideas and bring them closer to their customers and target audiences. For example, in the June 2014 edition of Wired magazine, Liam Casey (PCH International) said: “More and more, every corporate will need an incubator or an accelerator. Otherwise you don’t hear what’s going on in the market. With our accelerator business, we have eight CEOs that call us all the time, that shout at us, that tell us we’re crazy, useless. I tell our guys, just listen. The accelerator is our gym: it challenges us, it hurts, it forces us to think different, but it’s making us far more nimble as an organisation.”

Not only that, but incubators and accelerators can provide big businesses with a ready-made testing ground where they can try out new products and services, gain feedback and potentially first option on new technologies that they may wish to buy or invest into.

It’s early days but we (Sage) recently announced sponsorship of ‘Campus North’ – a new 10,000 sq ft co-working and events space in Newcastle upon Tyne which will be used by up to 150 start-ups, developers and freelancers who our low-cost, cloud-based Sage One accounts and payroll service has been created for. Our involvement with Campus North will therefore enable us to work with these people to make our service better, involve them in the development process whilst providing them with the tools and expertise to make their own business a success.

From a personal point of view, I also find enormous benefit in spending time with start-ups and entrepreneurs and the mentoring I have been doing for the ignite100 tech accelerator programme is where my involvement with Campus North began.

What do you think? How can big businesses do more to support small businesses in the UK? Please leave your suggestions in the comments box below.