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Backstitch’s Backstory Includes Corporate Support from Telecom Giant’s KC Accelerator


This story is part of a series that explores how Kansas City corporations are supporting entrepreneurship and why corporate engagement is important. For more, explore the new We Create Corporate Engagement report.

In 2016, the founders of a small Detroit-based startup called backstitch were rethinking the company’s signature product—a content curating platform—so it could serve corporate HR and communications departments.

Within just a year, co-founders Jordan and Stefanie Warzecha not only successfully modified the company’s original platform and its purpose in order to serve a larger, more lucrative customer base, it had also relocated its headquarters to Kansas City. And the Sprint Accelerator played an integral role in helping the Warzechas write that next chapter for backstitch.

Backstitch’s successful pivot is a story of how startups and corporations can work together in mutually beneficial ways.

The Backstory

Launched in 2012, backstitch originally offered a free content curating tool that allowed consumers to automatically aggregate and follow news around topics that mattered to them.

But some of the company’s users confided to the Warzechas they wished they had a similar platform at work to help them more easily follow information around their clients, competitors and developments in their industries in a more relevant and engaging way.

It didn’t take long for the Warzechas to begin asking themselves whether the platform they had already built could serve as the foundation for a new product they could offer to corporate communications and HR departments for just that purpose. They decided to investigate the possibility.

Through their research, they learned that employee disengagement with internal communications was high because of the outdated, nonpersonal and boring communication tools companies often use. Armed with this information, the Warzechas revamped their platform and started calling on corporations.

Strengthen Corporate Engagement in Kansas City

See how deeper collaborations among entrepreneurs, corporations and universities can help elevate Kansas City entrepreneurship and learn about the actionable steps we all can take.

Backstitch’s retooled software-as-a-service (SaaS) platform offers organizations a way to develop and deliver internal communications that are relevant to employees—containing the right information at the right time in the way each employee wants to consume it. The content can range from newsletters of aggregated external articles to messaging around employee benefits and training for jobs within an organization. Besides delivering content, the system can also track engagement, so companies know whether employees are receiving and responding to the messages.

Jordan said they essentially took the company’s original idea of curating and delivering very targeted and relevant content from the sources their consumer users wanted to hear from and applied it instead to internal company communications.

The gamble paid off. The company started growing. But, Jordan and Stefanie realized for backstitch to reach its full potential, they needed help creating infrastructure and processes that would allow the company—which at that time consisted of the founders and one employee—to sustainably scale.

“We were at a point in the pivot where we had early customers. We had gotten connections and pilots. But those were one-off, individual opportunities to work with a potential customer,” said Jordan. “We asked ourselves: How do we build a framework around that? How do we actually build an enterprise sales process? How do we think about customer success and managing these large corporate accounts that we deal with? We really didn't have the experience nor obviously the tools to build that framework to scale with enterprise-level customers.”

That’s when the Warzechas discovered the Sprint Accelerator in Kansas City.

Accelerating Connections and Innovation

The Sprint Accelerator is a hub for corporate innovation and entrepreneurial engagement, fully owned and operated by Sprint.

Tina Peterson, the Sprint Accelerator manager, said the purpose of the Sprint Accelerator is to encourage and create intentional, relevant collisions between Kansas City’s corporate and entrepreneurial communities.

She said the idea for the accelerator grew out of Sprint team members’ involvement with entrepreneurs in Kansas City. Peterson—a grassroots organizer in the entrepreneurial community who interacts frequently with founders—told colleagues she thought there was an opportunity for Sprint to engage with startups in ways that could potentially benefit both Sprint and the entrepreneurs.

“Early on, I was just trying to look at the landscape of how do we not only look for external innovators and engage them in working with the corporation but also how do we continue to engage from a corporate perspective with the community and in this space,” said Peterson.

So, Peterson started pitching the idea of corporate engagement in the entrepreneurial community to Sprint’s leadership.

“I was working from the premise of if we could unleash corporate resources into the ecosystem, we could help businesses grow, including our own,” Peterson said. “So, I do think corporate engagement, and specifically what we’re doing with the Sprint Accelerator, is mutually beneficial.”

Peterson said that Sprint executives were fully supportive of the idea of engaging in Kansas City’s entrepreneurial ecosystem. Initial support efforts consisted of small sponsorships, “many of them without even the Sprint brand,” Peterson said, for events like Startup Weekend.

“It was more about trying to understand the pulse of the community, what resources were available, what resources we had, and what could be built that would actually be supportive in a valuable way to the community,” Peterson said of Sprint’s efforts to understand where the company could have the most impact.

Peterson said that in conversations with entrepreneurs and entrepreneurial support organizations, she and her colleagues received feedback that allowed them to begin prioritizing their efforts. Among the suggestions they heard were the ability to tap the expertise in larger corporations, getting access to “first customer” opportunities with large companies, mentorship and gaining an understanding of how corporations work.

“So, we began building around that,” Peterson said.

The Sprint Accelerator’s three main programs—the 90-day Corporate Accelerator, the Mentor Network and Intentional Collisions—are designed to deliver on much of that early feedback and more.

Corporate Alignment Delivers ROI

Backstitch was part of the Sprint Accelerator’s 90-day program. Although the company was also selected as a finalist for another accelerator program in Boulder, Colorado, the Warzechas chose the Sprint Accelerator because they felt Sprint aligned with backstitch’s needs. For example, Sprint is a communications company at its core, said Jordan. And since Sprint is a large corporation, it had the same profile the Warzechas sought in potential clients.

“We actually felt like the Sprint Accelerator was the much better choice with corporate alignment,” said Jordan.

As a participant, backstitch received a $120,000 financial investment and office space. The Warzechas, one of 10 companies in the program, participated in daily peer-to-peer sessions in which members of the cohort listened, strategized and gave each other feedback. They also received valuable mentoring from corporate leaders across the country.

As a result of their Sprint Accelerator experience, the Warzechas developed a new product—a content creation tool called backstitch Studio—that has become core to their solution offering. In addition, they overhauled their business model to focus on working through partner channels rather than exclusively through direct sales to customers. In 2019, the partner channels accounted for half of backstitch’s business. Jordan predicts that in 2020 about 70% of backstitch’s business will come through partner channels.

Jordan noted a softer KPI that has resulted from the Sprint Accelerator program: learning how to build long-term relationships.

“Everyone thinks, ‘Oh, I know how to build and foster relationships.’ But when you’re selling to larger companies, especially something that gets integrated into their company and culture, then you’re building a relationship with your customer, their partners and their power users. I thought I knew that well, and I realized I didn’t have any clue until working with the Sprint Accelerator.”

Peterson noted that the ability to work with early-stage startups and tap into their technology, just as Pinsight Media—a former Sprint subsidiary did—is only one of the reasons Sprint continues to invest in the accelerator.

She said achieving scenarios in which there is a positive outcome on both sides is what it’s all about: “Whether that’s mentorship or proof of concept or signed business deals, those are all about trying to find the opportunities that help both sides grow and support each other,” she said

That’s especially true when it comes to discovering practical business uses for Sprint’s technologies such as the 5G network.

“It is about getting access to those innovations, finding new potential partners to work with and pushing technologies for Sprint, like our 5G network” and learning “how are we really going to use this from the standpoint of new businesses and services?”

Keeping KC’s Foot on the Accelerator

Although the backstitch story stands as a testament to what can be accomplished when corporations and startups work together, both Sprint and backstitch agree there’s more to be done to ensure these types of corporate-startup relationships are considered and, importantly, nurtured.

Jordan, for example, said that finding the point of entry to a corporation is still a major obstacle for many entrepreneurs. That gets further complicated when a corporation sends representatives out into the community without real knowledge of their corporation’s needs.

“I think what needs to happen is either 1) there needs to be a lot more dialogue between those innovation corporate development layers and their operational leaders and/or 2) instead of just having a designated innovation group to go work with startups, try to bring in their leaders,” encouraged Jordan. “Grab your operations and safety leaders. Bring in your training leaders, your marketing group, the actual operational divisional leaders in your business. Bring them to the startup matchmaking and innovation groups. Bringing the actual people who are in the day-to-day to those events helps to better identify and solve the challenges your groups have. Somebody in a corporate development role is not really going to know about all of them.”

And, he added, startups must be more specific about what they have to offer. Then they must educate their corporate contacts about the benefits of working with them rather than just assuming corporations are sitting on the sidelines with lots of money to invest.

“That's not the case whatsoever,” said Jordan. “You are going to have to be the one to lead them to water essentially. So, the startup really needs to have the mindset of ultimately educating and owning the process.”

Peterson said that corporations have many priorities and deliverables, and assuming corporations know what entrepreneurs need is a “myth.” She said it would be helpful to corporations to know the key pieces that Kansas City wants for corporate engagement so people like her can make the asks of our corporate leaders.

“What I would like to see is an even more direct ask from our founders. And then I think the corporations could find more opportunities to get involved,” she said.

From where she sits, Peterson sees Kansas City poised to replicate more successful collisions between small, emerging companies like backstitch and corporations like Sprint.

“When it comes to corporate engagement, I think there are a lot of things corporations are doing that may not be overtly public,” she said. “I think all the corporations in Kansas City that we've been able to work with at even a small level want to be part of the innovation that's happening here, especially for those headquartered in Kansas City. I believe there's a lot of commitment to this ecosystem. It’s just sometimes we don't know all the answers. I know our founders are trying to figure things out as they go as well. If we can come together and try and figure out ways that we can help each other, it's going to lead to a positive outcome for Kansas City overall—for small startup businesses and large corporations.”

 

Strengthen Corporate Engagement in Kansas City

See how deeper collaborations among entrepreneurs, corporations and universities can help elevate Kansas City entrepreneurship and learn about the actionable steps we all can take.

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