History of Startup Programs

It all began with Softlayer, the public cloud computing platform that specialized in hosting workloads for gaming companies and startups.

The success of Softlayer’s program inspired others to follow suit, and in 2010, Sendgrid launched its own startup program with a team that included members who had previously worked at Softlayer. 

Over the course of the next decade, startup programs proliferated across a wide range of organizations, from tech giants to financial institutions and consulting firms. These programs provided a range of services to startups, including access to funding, mentorship, and discounted resources.

Why Startup Programs Work

Startup programs were originally formed to help startups grow whilst generating early-stage brand loyalty with the products offered to them. The model has always been simple; giving products to startups through perks can be beneficial for both startups and corporations. 

For startups, receiving free products can be a significant advantage as it can help them save on costs and allow them to focus on other areas of their business. This can be especially helpful for early-stage startups trying to get off the ground and may not have the resources to make large purchases.

By using specific products for free, startups can get a better understanding of how they work and how they might be able to integrate them into their operations. This can help startups make informed decisions about whether or not to continue using the products, potentially leading to them becoming long-term enterprise customers.

For the corporation, providing products to startups for free can be a way to build brand awareness and loyalty among a group of early adopters. This can be especially valuable if the startups are successful and go on to become influential players in their respective industries. In addition, giving products away to startups can be a way to gather valuable feedback and insights that can be used to improve the products and make them more appealing to a broader audience.

Giving specific products away to startups creates a win-win situation as it can help startups save on costs and allow them to focus on growing their businesses while also providing the corporation with valuable insights, the opportunity to build brand loyalty, and early access to long-term enterprise customers.

Where Startup Programs Stand Today

Many of the first organizations to create startup programs have found it difficult to sustain their efforts over the long term. This is because startup programs can be difficult assets to carry on a company’s balance sheet. They are often community-based and don’t necessarily lead to direct short-term revenue. They may require a lot of external support and resources that are outside a company’s core competencies.

In recent years, we have seen a shift towards startup programs focused on generating short-term revenue. These teams are often housed within sales organizations and are motivated by the goal of achieving a return on investment. This approach can be problematic because it can create incentives that are not directly aligned with the success of the startup. If a startup is inundated with subscription fees and has too much overhead, it loses its ability to scale quickly. If an organization’s startup program is too focused on net new revenue from the startups they work with, they will miss out on the opportunity to participate in the upside of startups scaling successfully.

Today, there are over 300 startup perks pages available online, and it can be overwhelming for startups to navigate this landscape. Many of the same perks are listed on multiple pages, which can make the “perk” aspect irrelevant. The proliferation of perks pages and the sales-oriented approach of some startup programs is changing the nature of these programs.

Where Startup Programs are Heading

The future of startup programs within organizations will focus on a low entry point community that allows startups to access continued resources as they grow. Creating a community where startups can join at the ideation phase, and scale with an organization’s products and services allows startup programs to offer the right resources at the right time.

Supplementing the resources by creating an extensive partnership network will allow startup programs to convene resources necessary for startups at their respective stages. No single company should have its own mentor network, investor network, or resource library.

In the next five years, startup programs will include partnerships that include; 

• Complimentary service offerings
• Corporate innovation programs
• Startup events and conferences
• VCs

The startup programs of the future will be free to join and application based to ensure a relevant long-tail pipeline. Startup programs will lead with resources and follow with relevant products when they are necessary for the startup’s growth. Startup programs that create communities around the problems founders face will see high success rates from founders and ensure the scalability of the startups these founders create.