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.
Dual-Persona Smartphones Not a BYOD Panacea
After two-year hiatus, EFF accepts bitcoin donations again
CIOs struggle to deliver timely mobile business apps: survey
Spiceworks' free management software gets integrated MDM
Opinion: Why national e-health is not for everyone
Pathways Advanced ICT Leadership Development Program Course Outline and Big 6 2013
Developed by the CIO executive Council in conjunction with Rob Livingstone Advisory, Pathways Advanced is a 12-month CIO delivered, small group, mentor based professional leadership development program. Pathways Advanced brings together best practice, thought leadership and business insights for today’s most promising ICT professionals
Accelerate Cloud and Composite Application Delivery
Are your requirements the need for faster release cycles, you have reduced budgets required to run and manage a complex test environment, and you want to decrease your third party expenses? HP Service Virtualisation, designed to enable your teams to create, develop and test against virtual services that simulate real service behaviour with no constraints, available anytime.
Moving to a Private Cloud? Infrastructure Really Matters!
The Cloud isn’t about locality. It is about quality of service delivery, cost, and whether the services consumed satisfy our objectives. For the enterprise, you need to select the right QoS to mitigate the inherent risks or you face the problem of losing data and the ability to execute operationally. Read on.