Ok – Investors want certainty of their investment and what better way than to get another large company to validate your company by signing up to become an OEM or Reseller. Sure you can trace this kind of relationship from reseller to acquisition but for what kind of multiple. We all have heard the stories of little company “x” getting into a relationship with big company “y” and having company “y” re-engineer your ideas and then kick the crap out of company “X” –yep, they don’t play nice and they don’t care if they bury your dreams.
The key – you must out-dance the Gorilla. Remember you have something that they do not. It is your intellectual property that they want to license on the cheap…sure you can have access to their salesforce...a salesforce that has no real interest in selling your product. A salesforce that you will not be able to hold accountable at the end of a quarter.
Hey – if you want to go big, you have to be willing to “go big or go home”. Take your bet – get your product to market and determine if there is a way for you to build an independent channel. If there is a way or a glimmer of a way – go for it. Put on your iron underwear and go find a battle that you can win.
Every time we said no to an OEM deal our senior management team would come together and ask the question…do you want to go to war with company “x”…the answer was we are already at war with them…they just did not know it. The entire reason they want to OEM our stuff is that we were starting to win…clients were asking the established vendors for a product like ours…Some of the scariest moments in the company history were saying no to OEM deals…and when the OEM introduced competitive product from another company – it took courage, but it also took the knowledge that to do the deal was to admit defeat before we had a chance to fight.
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