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Andrius Milinavicius: The Corporate World Is Immune to New Ideas

Andrius Milinavicius has taken on the difficult role of bridging the gap between traditional business and startups. As the key player in both LiMA (Lithuanian Marketing Association) and startup accelerator Baltic Sandbox, Andrius gives us an overview of the dynamics between the old and the new.

For many years, startups have been reluctant to work with traditional marketing agencies. For them, marketing is embedded into the product. Startups have ambition and money, agencies have branding and marketing knowledge, but the two are not talking to each other. How could we build a bridge between them?

I founded an accelerator called Baltic Sandbox and we are testing out several approaches to tackle this issue. I think it starts from early relationships. Baltic Sandbox invites agencies to mentor startups in their early stages. They have agreed to withhold from selling their services and instead showcase the possibilities an agency can offer. At this point, startups are unable to pay any bills and as we are all aware – agencies are marvellous at billing. If the relationship hasn’t been built, there is no mutual understanding, I don’t really see a point for them to cooperate.

Coming together at an early stage is the best way to adapt the startup mindset: test fast, fail fast, adapt, pivot. Agencies get a lot of very valuable knowledge. I’ve had agency owners come back to me with much more profound understanding of how the startup ecosystem actually works. That is the basis for them to cooperate into later stages of the business.

There are many ways to cooperate. One can mentor for free, mentor for equity or future income. I’ve seen examples of partnerships where the agency invests a certain amount of money into the startup and is later paid or given equity in return. The problem is that agencies still struggle to understand the way startups grow. They write contracts with numbers that look good on the paper (the same goes for angel investors), say it’s 20% or 30%. Actually, even 2% of equity can be a lot of money in a couple of years.

The agility and speed of startups is also a hurdle for traditional agencies – they are not used to working this way.

There are agencies that are process-oriented and agencies that are goal-oriented. Even today, I see agencies working with clients based on revenue share and this model works well with startups as well. With this strategy in mind, the agency is actually focusing on results rather than the process. You have a lot of people on the payroll when working with a big client and you need a stable stream of revenue. Everything needs to happen very fast in the startup world, because ideas are easily copied.

Do you see traditional companies implementing the startup-ish growth mindset in marketing and product development?

Our Business Angel School was launched two years ago because we understood there a lot of high net worth individuals coming from traditional business, who feel like they are missing out on the startup craze. Our school gathers them around the table and explains how this world works.

We also get increasing interest from C-level managers from the corporate-side. However, there are problems to be solved before they can apply the startup mindset. Every corporation has an immunity of sort, where every foreign idea is regarded as a virus to be killed. Why? Because it doesn’t fit the norm. Many are unable to apply this approach and it’s easier for them to buy the startup of interest. Even then, they have to merge it into their company or leave it be and regard it just as a source of income. We have younger generations coming into the corporate world now so maybe things will change.

What type of skills or understanding are lacking on the market today?

There are many, but we at LiMA see an overall issue with competences not being aligned. Even on an HR level, there is very little understanding of the differences between a marketing manager, marketing specialist, marketing communications specialist and a marketing director for example. All of them come with different skillsets. That’s why we launched LiMA Certification courses, to bring some clarity on all levels.

Our next focus is on owners and general managers. Everybody should understand that marketing stands as the key competence for the company to evolve. COVID was a reality check for many. The ones who came out on top, were the companies with a very marketing driven approach, who made quick decisions to reinvest their sales channels. We can no longer look at marketing as an expense – it’s the cost for survival.

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