A summary of obvious points
When dealing with third-party companies, smaller companies can move faster and larger companies can generate more value. As startups are pressed for mostly every resource they have, picking different size engagements to tailor how the world interacts with you can be quite a powerful tool.
The portfolio approach
Typically when you make an investment, you invest in a portfolio of funds that create the long term growth and short term gains you desire. It would be ill-advised to simply invest in one fund.
I think engagements should be viewed in a similar way.
Partnering and piloting with smaller companies provides proof of commercial interest and often you can be in direct contact with the key decision-makers. This means that plans can rapidly progress and outcomes be delivered in shorter timeframes. The downside is that as small entities, they are unlikely to create large orders and high customer lifetime values by themselves.
Partnering and piloting with larger companies creates the potential for large future orders and a mutually beneficial integration/leveraging of the companies infrastructure. If you get one large company interested, you may not need any other companies for your first few months or even years of operation. The problem with companies of this size, is that they move slowly and often hit internal roadblocks causing delays. Because they are internal, unblocking them is often impossible, leaving you at the mercy of their timelines. This can be expensive in terms of time you may not have.
By establishing small company pilots to prove aspects such as commercial interest and product usability, you can control your timeline, and generate positive secondary effects. These effects can help raise finance, awareness, technology readiness, etc, enabling steady and timely progress.
Establishing large company pilots, creates longer-term opportunities and a backdrop to your shorter-term goals. As the timings of these larger engagements are now partially insulated from your immediate goals, delays can be accommodated and an efficient amount of effort used to maintain their progress.
This portfolio approach to different size engagements does require a larger bandwidth, but I believe that the extra effort and complexity is worth it. It greatly enhances the resilience and adjustability of your overall engagement plan by allowing for finer control over the plan’s constituent parts.
When next planning who to partner with, plan it as if it was a portfolio savings fund, you might be able to save yourself some time and a considerable amount of effort.