Innovation Blog

Corporates and Startups: Why its No Longer Us Vs Them


Thats why 67% of corporates are targeting early stage startups for partnerships, according to our new study with Imaginatik, The State of Startup/Corporate Collaboration 2016. The main reason is to explore new business models and technologies, to see what new transformative products and ideas they can bring to the market together.

Why cant corporates innovate on their own? And why would startups work with corporates to bring their innovations to market?

Here are a few reasons why startup/corporate partnerships work:

Friends with benefits

Corporates can be victims of their own success. The fact that they have scale also means that they lack the flexibility and speed needed to innovate and bring new products to market. Startups have no such restrictions. With limited resources and essentially, nothing to lose, they are by nature more willing to experiment and be bold with their innovations. At the same time, by partnering with corporations, they get access to the full range of resources needed to develop their products and even work together on joint projects. In this vein, its easier to think of the partnership as friends with benefits; theyre equal partners in the innovation game.

Corporates get insights into the latest technology

If theres anything that corporates have learned in the last few years, it is this: that they have to adapt to new ways of innovating.

Many corporates have chosen to adapt, by setting up their own innovation hubs which serve as idea incubators for staff – and startups – to develop and bring products to markets in a collaborative environment. They have also realized that if they wait until a startup is big enough to be a threat or an acquisition target, it may be too late already. Thats why they are beginning to work on pilot projects with early-stage startups, and seek out the hottest startups to be the first one there.   

Startups see corporates as mentors

Startups realize that far from viewing corporates as the competition, they can leverage the corporates industry experience and resources to develop their own products, bring it to market faster, and also open up commercial opportunities. Sherry Coutu, on our global board of advisors, called working with corporates a startups best growth hack. In fact, startups voiced over and over in our report that they wanted to learn from and work with corporates in a mentor-mentee relationship.

Its a partnership – not a charity case

The last few years has seen a rise in a number of alternative funding options, and other market opportunities for startups, so they can – and are – more selective – about whom they choose to partner with. They also know that corporates need them and their ideas. This mindset has helped them to think about corporates as equals. Corporates, on the other hand, should take this to heart and make sure to treat startups as partners rather than a charity case – corporates arent just doing them a favor, they need startups, so make sure to respect them in the process.

In conclusion, startups and corporates need each other

The rise of industry disruptors may have changed the innovation game, but its also opened up exciting opportunities for startups and corporates to work together collaboratively, as partners, in full appreciation of each others strengths. To learn more, read our report on startup/corporate collaboration


New to MassChallenge?

Visit the Join section of our site to learn more about the organization and how you may benefit by getting involved.

Upcoming events