The No-Cost Option
Big companies that deal with startups on a regular basis seem to have become very good at acquiring no-cost options as customers. For example, it seems that even in this depressed environment, the financial behemoths love enterprise software, the networking giants are excited about ultra-high-speed technologies, and Intel is a big fan of anything that lets Intel sell more chips (duh!). At this point, when a startup comes back with excited quotes from its potential marquee customers, I have to take it all with a healthy degree of skepticism. These large companies realize that an ecosystem of small companies building products for them, on other people's nickel, can only be a good thing, so they are very good at getting enthusiastic about things that they will probably never end up shelling out much money for.
This can be a serious problem for entrepreneurs looking for validation -- such customer feedback can be misleading, and often fails to convince potential investors anyway. I've done numerous reference calls where a reference promised as "positively giddy" turns out to be quite equivocal, once the referencer realizes that they're talking to a VC with whom they'll want to have a relationship in the future.
The solution to The No-Cost Option is to impose a cost, thereby demonstrating commitment, but it's hard for startups with no product to get money from the big potential customer. However, other dedicated resources, such as people on their side to test the product, or resources internally to evangelize and support it are almost as good. Strong interest by multiple people across departments, and not just a former colleague who happened to land at the big company is helpful too... Finally, sometimes a reference that not only validates your approach, but is willing to go out on a limb and critique competing approaches, is at least making some hard tradeoffs. It might be exhilirating to think that The Big Investment Bank loves your software and can't wait to roll it out, but just ask them for a list of all of the projects in the pipeline before yours.
