This was one of the findings of our study on startup/corporate collaboration.
But what are the top three key factors that both parties need to consider before initiating these interactions, to ensure their success?
Define your priorities before engaging
Nearly 45% of our respondents in our study cited strategic fit as the most important factor in their startup/corporate relationship. However, both parties ideas of what strategic fit is might vary. For Roberta Ortega, head of digital innovation, Caterpillar, this meant identifying the best opportunities for both parties to get the best out of their partnership. He explains it thus: We try to meet each startup on equal footing, looking for win-win relationships to help us both achieve our goals.
Suelin Chen, founder and CEO, Cake, goes further by identifying those specific opportunities. She says: We realized that our product offers a clear value-add or complementary service to many corporations, so we explored distribution partnerships.
Both Ortega and Chen identified and defined their business priorities before engaging with their respective startup/corporate partners, hence they were able to maximize the full benefits of the relationship.
2. Ways to manage the early stage interactions
While interest from a large company is flattering for a startup, they should still do their research. If the large company is inexperienced with dealing with startups, they might have unrealistic expectations of what they hope to gain from the relationship and how their working relationship should be like. As theyre usually under-resourced, most startups use agile methodology to provide creative solutions to problems. However, a company inexperienced with working with startups might find what seems like the lack of process or accountability on the part of the startup too unstructured, and thus have doubts about their partnership.
The current trend to work with startups has created a somewhat unrealistic expectation of what can be achieved from these interactions. Suddenly, startups are seen as the solution to the big companys problems. Our advice to large companies: know what you need, before you engage. Large companies should also make themselves attractive before approaching the startup. Simple things like having one main contact point for the startup will keep the communication channels open and go a long way towards managing these interactions.
3. Get an innovation team
Arguably, the best way for corporates to get the full benefits of these early stage interactions is by having a fully-empowered innovation team in place. These teams can act as brand ambassadors for the company and crucially, ensure that the companys innovation agenda remains a priority as they navigate their interactions with startups.
There is no doubt that there are huge benefits to be gained by startups and corporates from having early stage interactions. However, both parties need to ensure that they have manageable and clear expectations of what these benefits are and how they can realized.
Download our report, The State of Startup/Corporate Collaboration 2016, to find out more.