Startup/Corporate Collaboration: The New Face of Innovation

Today, a growing proportion of those interactions are taking place at a much earlier stage, with both parties looking to share the risks and rewards of such connections.

At MassChallenge, we see this trend as highly significant. Our team has not only had front row seats to this trend - we’ve been actively driving it through our work with over 100 partners from top corporates and governmental organizations. We sought to explore the dynamics of this emerging working relationship and what it meant for the future of startup/corporate collaboration.

The result is the first-of-its-kind research study, which was conducted in partnership with Imaginatik, an innovation and software consulting firm. The outcome is our new report: The State of Startup/Corporate Collaboration 2016.

Here are the report’s five key findings:

1. Interactions are moving more early stage

In the past, most startup/corporate interactions tended to occur at the negotiation table, when the startup had acquired enough value and stability for acquisition by the corporation. This has changed. Now, these interactions take place much earlier. Our study shows that 67% of corporations prefer working with startups at earlier stages, primarily “to explore new technologies and business models”.

2. Interactions with startups are becoming “mission critical”

Corporations now prioritize those interactions with startups. An overwhelming 82% viewed the interactions from “somewhat critical” to “very important”, signaling the growth and evolution of this new model of collaboration. Importantly, 23% surveyed viewed those interactions as “mission critical”.

3. Corporate innovation models are still in their infancy

While a large number of organizations (86%) view innovation as crucial to future growth, their attempts to work with startups to advance those efforts are still largely underfunded and lacking focus. In fact, 25% of those surveyed were unsure how much they are actually spending on innovation.

4. Strategic fit is paramount, but the underlying goals vary

Both startups and corporations agree that “strategic fit” is their main criterion for working together, cited by 44% of corporations and an even higher 65% of startups. Definitions and interpretations of “strategic fit,” however, can vary widely. This can create a ‘lost in translation’ problem leading to misunderstandings and missed opportunities. More work needs to be done on both sides to realise the full benefits of their partnership.

5. No longer “us” vs. “them”

Startups are no longer seeing corporations solely as potential acquirers. Founders are beginning to realize that corporations have the experience and resources that they can leverage, but at the same time, they also realize that they can be selective about the corporations they work with.

The future of startup/corporate collaboration

Startups and corporates are different, but the balance of power between the two is changing. Both sides are seeing the value in working together long-term, in more nuanced partnerships in which both parties are evolving to find that perfect strategic fit for their innovation agenda.  

Download your FREE copy of The State of Startup/Corporate Collaboration 2016.