Startup/Corporations Collaboration Schemes
Collaboration between startups and large corporations is increasingly spoken about as mindsets have changed and potential synergies and mutual benefits are gaining greater recognition. Whilst at the core they are very different entities, and at times it can seem as if they are speaking different languages and are from distant planets, there is more room for positive relationships than might first meet the eye.
It is should not be a case of ‘Us’ versus ‘Them’ with interactions purely in terms of ‘competitors’ or ‘acquirers’ (either of the businesses, of talent as ‘aqui-hires’ or both). Nor should larger companies purely look at startups as accelerating and looming threats in their rear-view mirrors and startups should not merely see established firms as juicy targets that are ripe to take on. So much can be achieved if they work together and ultimately this leads to more benefits for consumers, markets and wider society as a whole. It is promising that this is being recognised on all sides and collaboration between startups and large corporations is improving. These linkages are something we want to build upon and contribute to developing further.
Benefits of ‘open innovation’ for both sides include
For corporates
Gain an invaluable shot of startup DNA to instil a more entrepreneurial mindset internally amongst staff and reinvigorate corporate cultures to encourage creative thinking, challenging of the status quo bias and less risk aversion
Solve existing business problems and improve your core business by accessing innovative solutions and approaches that can help improve efficiency, reduce costs and raise margins. Startups by their nature are nimble and seek to be cost efficient and many of the most novel methodologies have come from new businesses
Access and leverage the power of cutting edge technologies and capabilities to help you expand into new markets, products/services and channels to stay competitive in a world driven by innovation. Gain a key advantage
Strategically look at trends and work towards being ahead of the game when it comes to industry shifts and the creation of disruptive new opportunities. This helps you avoid being too late to the game, and minimises the risk of having to look at expensive acquisitions of startup competitors later down the line, when they will have scaled to become a serious threat
Recast your company brand in an increasingly digital age to stay modern. Associate your name with innovation to attract new potential customers and talent
Reach and source talent that might not exist in your organisation but can help innovate your business and existing practises
For startups
Benefit commercially by gaining major customers - corporates can be crucial customers themselves and open doors to other companies who can also become clients. Corporates can also have the benefit of the startup customising products and offerings around their needs - all without the cost of developing it themselves
Access to established marketing channels to give you presence in new markets faster. Whether it is through licensing, partnerships or co-branding arrangements, the ability to leverage the marketing reach and branding power of large companies can be invaluable for startups
Forge strategic partnerships around co-development and use existing distribution networks to get your innovations out there more quickly and on a larger scale. Rather than merely seeing corporates as competition you can work with them to grow faster
Benefit from the recognition and credibility that comes with partnering with a large established company. Leverage the increased visibility and publicity. This can help you get a strong foothold and work with other partners that might have been more sceptical or reticent initially
Leverage the extensive expertise of established businesses and learn from them. They have a wealth of experience and market knowledge built up over the years that they can share. They all began somewhere so have made the journey from early stage to a fully-fledged company and the advice and guidance they can provide based on their own journeys and battle scars is invaluable
Access to potential further investment and wider support from marketing, research, management etc. teams. Large companies can also be potential exit routes as acquirers in the future
Engagement
We believe that every corporation (from the very largest enterprises to more middling sized businesses) should have an interest in startups. This is because in this day and age, we live in a world where innovation is key to long-term commercial success and in every possible industry innovation today is increasingly being pushed forward and led by startups.
The leading startups are nimble and are seeking to disrupt established players, industries and ways of doing things. They are dynamic and able to adapt and pivot quickly – they are not lumbered with bureaucratic processes, legacy systems and extensive infrastructure that need navigating. Across the globe entrepreneurs are rethinking each sector and each market, building entirely new ones and looking to change the world and shape the future. More than anyone else, they are best placed to harness the power of transformative technologies, and improve existing business models and markets or invent completely new ones. Whilst they may be young, the very best have reached large valuations including billion dollar ones in an amazingly short period of time, and have become world leaders. They are not to be dismissed, but at the same time, large corporations should not sit in fear of the ground falling beneath them and should not just wait for their space to be disrupted by new young players. For sure, the best startups and founding teams can be seen as an existential threat but all is not lost and rather than taking an antagonistic or combative approach, corporations should seek to partner and work with them. This is precisely what large companies are waking up to and beginning to do, as they seek to move beyond business as usual, and encourage disruptive innovation. However, whilst almost every corporation says they want to do ‘something’ with startups, they often do not know what the best approach and direction is, and in some cases even where to begin.
Various methods have been tried from the creation of internal innovation competitions, discussion/brainstorming sessions and even dedicated teams to the development of corporate accelerators, the opening of co-working spaces, internal hackathons and the sponsoring and support of external ones and other events, competitions and workshops, to the setting up of corporate venture funds and incubators. However, one size does not fit all and these have had varying levels of success. Innovation is not something you ‘do’ for an afternoon each week but needs to be part of the culture so everyone in the company can contribute towards it, even in the smallest ways. The solution is not as easy as simply opening your doors and putting up a sign saying ‘startups welcome to work with us’. The approach requires more sophistication and the array of possible options both internally and externally can be confusing. We are here to help and believe that embracing the importance of ‘open innovation’, as many organisations are increasingly doing, is the best approach. Through the development of mutually beneficial partnerships, startups and corporates can create enormous opportunities for each other and simultaneously great value for their customers and the wider market. The potential positives outweigh any negatives by far and if done correctly, the collaborations can be very fruitful, leading to win-win solutions for both parties, something we consider to be very worthwhile.
How we broker relationships
Where to start and which startups to work with is often a large obstacle for corporates. It is a well known fact that most startups fail, and of those that survive, only a few will go on to become global leaders. We have developed a platform that allows corporates with an appetite for innovation to access the most promising startups and for startups to reach the most appropriate corporate partners that can take them to the next level faster. We act as the broker that assists in building partnerships with the best strategic fit for both parties, so that they both win and gain the most added value. Each relationship is bespoke as one size does not fit all both for startups and for corporates.
We have unique and extensive access to both the most promising startup businesses and entrepreneurial ecosystems, and to the most powerful and influential corporations in the world. In addition to startups, corporates can access to most exciting research and development coming out of universities and research institutions. If you are an innovation hungry company or technology buyer we can give you access to the most cutting edge IP and technologies being developed on campuses globally. If you are looking to develop new businesses we can build them with you. We source ideas from our corporate partners and develop them in our incubator. This is often far more effective than committing huge amounts of resources and spending large sums of money and time on internal innovation teams or in-house accelerators that can often be very inefficient.
For corporates we seek to help you avoid the dreaded ‘Kodak moment’ and can consult you on the best approaches and practices and design programmes and models with you. Doing it all on your own in-house can be a large drain on resources as you try different options to get it right. Often you may fall short of achieving your desired results with significant costs and time loss. In the worst cases all this can lead to reputational damage. We help you avoid making the mistakes of creating environments that generate little results beyond just good brand association, that attract the wrong companies or too few at all and that do not provide the tailored support required for startups to succeed. We have a great wealth of experience in brokering the relationships between both sides, designing programmes and initiatives that add value and are high quality. We understand what to look for, where the pitfalls are, and what often works and what does not. We often find that the hardest part is at the earlier stage with issues around lack of internal buy-in, the levels of resources and investment required and the desired impact. We work with corporates to understand their desired goals and realistic expectations from collaboration and then come up with a plan for the best courses of action and success metrics. We do the same for startups. For each partner, any collaboration can be ruined from the beginning if they do not understand what the other side is looking for, and so we help them understand each other’s perspectives and goals, so that the relationship can be a mutually beneficial one. We give both sides the time, attention and sensitivity required for successful collaborations between innovation-seeking companies and ambitious startups.
