Why Tech Startups Partner With Companies In Industries They Want to Disrupt
- 30 January, 2013 14:36
Part of what fuels entrepreneurs is the belief that they're doing something different than what's been done before. But those inventive scrappers also need other forms of fuel to launch a company, including money, influence and experience.
Often those tools come from partnerships with established companies in the very industry that the startup wants to disrupt. (For much more, see " CIOs Can Help Their Companies Survive Industry Disruption.")
Recyclebank uses sensors and GPS technology to track how much plastic, paper and other material people recycle, then gives them points to redeem at 4,000 businesses.
The young company says the gamification of recycling encourages individuals and towns to change their behavior--once they sign up. Convincing them to join can be slow going, says Javier Flaim, chief sales and marketing officer at Recyclebank, and wading through municipal bureaucracies and contracting procedures can take years.
But a relationship with the $13.2 billion Waste Management gives Recyclebank access to the giant's 20 million customers. Recyclebank also gains inroads into regions across the country where Waste Management is already established, as well as an undisclosed financial investment. Waste Management gets a ready-made, consumer-friendly mobile app and website to boost its recycling reputation.
The symbiotic relationship doesn't threaten Recyclebank's independence, Flaim says. Waste Management's marketing team and Recyclebank's IT team work closely together to make sure customer data and reward points are accurate and shared, he says.
Upstarts in other industries, however, aren't so friendly with established players. A financial services company called Simple launched in May, offering real-time Web and mobile monitoring tools to give customers frequent updates about their personal finances. With Simple's website and mobile apps, customers receive alerts about account balances and spending levels.
They can also attach photos and notes to transactions records, allowing them to more readily understand their financial behaviors. A "Safe to Spend" figure shows not just an account balance snapshot but how much money is actually available after factoring in pending transactions, scheduled payments and personalized goals, such as saving for vacation.
A customer who is kept apprised about his money will use it more carefully, says founder and CEO Josh Reich, but traditional banks don't encourage that behavior. Simple's customers transfer their funds to Simple's commercial bank partner, Bancorp, which has no branches and serves as the regulatory and compliance back end to Simple's customer experience front end.
Reich relishes disrupting the banking business. Banking should be like an easy-to-use utility integrated into your life, he says, not "an adversarial struggle."
Read more about it strategy in CIO's IT strategy Drilldown.
Join the CIO Australia group on LinkedIn. The group is open to CIOs, IT Directors, COOs, CTOs and senior IT managers.
Call Centers Suffer From Big Data Overload
CIO 100: Carsales wins top gong for innovation
How to secure passwords and other critical numbers
Australian National University streamlines IT
Scientists create mega quantum system cluster
Complexity Ate My Budget
It’s high time we tamed the monster we created! Against a backdrop of sustained and uncontrollable data growth, most of today’s operational problems revolve around backup and recovery. Understanding the hidden costs and implications for data protection strategies is critical, but the complexity of the nebulous and amorphous cloud can make everything hazy. This white paper breaks it down to different dimensions of virtualisation and how to deliver the productivity and flexibility it promises.
Customer Experience: Empowering People. Powering Brands
The new rules of customer engagement have had major implications on the way your customers do business with you. Historically, the B2B selling process has been very fragmented with the use of highly customized and siloed applications, however today B2B buyers today can leverage multiple sources to find out more about your products or services. In this executive strategy brief, we will explore customer experiences throughout the selling process and ways to improve sales performance.
Top 10 Mistakes in Data Centre Operations: Operating Efficient and Effective Data Centres
How can you avoid making major mistakes when operating and maintaining your data centre(s)? The key lies in the methodology behind your operations and maintenance program. This whitepaper explores the top ten mistakes in data centre operations. Read now.