It's easy to read this and agree, but quite a bit more difficult to then turn down discussions with Big Co once you've quoted them 1M ACV and they didn't flinch.
If you feel you must pursue such a deal against this advice, one way to counteract the negative effects is to bake in a break up fee in the evaluation/trial phase (don't call it that, though).
Most 'Big Deals' will come with such a trial / prototype phase. One way to structure a 'break up fee' is to say: the trial will cost 10% of the final annual contract value - if we close, this will be counted as a rebate against the final price, if we fail to close, startup will keep the 10% to cover their costs of the phase.
I think the advice in this article is good advice from a VC's perspective relative to that VC's returns in the companies he invests in. Is it just as good for the company founders? That depends on whether their true goals align.
The article is correct in that doing a deal with a big customer will largely make you beholden to that customer. You'll probably become what is basically a service company.
But if the price tag is high enough, and you're the majority owner, who cares? Maybe you end up selling your company to your customer a few years down the road for a sum that's small to a VC but big to you. We live long lives, if you enjoyed the journey you can then go start another company. Even if you don't get an exit, you can still make nice money just servicing the contract for years.
For a founder who'd be happy to have $1M or $10M in the bank and doesn't necessarily need to make $100M or $1B (yet....), doing a big deal (or preferably a few) and focusing your company on them is a lower risk strategy than trying to be the next Dropbox, and it can still yield great rewards.
If the only outcomes that will make you happy are a huge company or a huge exit, though, then Aaron's advice is right on the money. I also agree that you have to be very careful about the terms of the deal and have a way out if things go south. I don't think an inexperienced founder's first deal should be a big one--a scenario which worked out well for us was to do several smaller deals with bigger companies and then grow those relationships over the years. Once you have a solid internal champion at a company who owes part of their career success to you, they'll handle most of the politics.
If you feel you must pursue such a deal against this advice, one way to counteract the negative effects is to bake in a break up fee in the evaluation/trial phase (don't call it that, though).
Most 'Big Deals' will come with such a trial / prototype phase. One way to structure a 'break up fee' is to say: the trial will cost 10% of the final annual contract value - if we close, this will be counted as a rebate against the final price, if we fail to close, startup will keep the 10% to cover their costs of the phase.