Using Supply Chains to Grow Your Business

Entrepreneurial opportunity isn’t exclusive to the Apples and eBays of the world. The vast majority of successfully scaled ventures aren’t mythical unicorns with billion-dollar paper values; they’re workhorses that plug along, steadily producing results year after year, says entrepreneurship and innovation expert Daniel Isenberg. One of their secrets to growth? Supply chains.

Sure, sassy Silicon Valley startup sounds sexier than nose-to-the-grindstone supplier, but consider this: which has the better potential to scale-up and create long-term value for customers, owners, investors and employees? It’s a question – and answer – Isenberg and co-author Timothy Coates from IBM dissect in their recently published Harvard Business Review article. Small businesses that enter the supply chains of big corporations consistently report revenue growth of more than 250 percent in the first two years after their first sale.

“The idea of embedding yourself into a vigorous supply chain may not seem exciting,” says Isenberg, the founding executive director of the Babson Entrepreneurship Ecosystem Project. “But if done well, it can be a powerful way to scale-up for success.”

Author of “Worthless, Impossible and Stupid: How Contrarian Entrepreneurs Create and Capture Extraordinary Value” (Harvard Business Review Press, 2013), Isenberg is well known and highly regarded for encouraging entrepreneurs to challenge the status quo and find innovative approaches to building business.

In “Using Supply Chains to Grow Your Business,” he shares several stories from courageous entrepreneurs who have done it well and offers six pieces of related advice on how to effectively scale-up by tapping into supply chains.

  1. Reveal more than is comfortable.
  2. Manage culture by setting expectations appropriately.
  3. Manage the arduously long sales cycle.
  4. If you have one big customer, enlist them to help you grow your customer base.
  5. Treat procurement as a partner, not an adversary.
  6. Innovate and invest, even when it hurts.

Isenberg acknowledges this path isn’t a cake walk. Corporate procurement processes are opaque, secretive, and can be influenced by political pull as well as pure performance. But for hungry entrepreneurs, know-how and energy will work in your favor.

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