The study was the first to interview both startups and corporations on their views about their interactions. The firms surveyed 233 startups and 112 corporate respondents from March 30th to April 24th, 2016. Corporate respondents included Microsoft, Pfizer, KLM, Cisco, Xerox, and IBM, among many other leading companies.
Among other insights, the study uncovered five key learnings:
- Startup/Corporate interactions are moving earlier stage
Corporations are increasingly interacting with startups at earlier stages, with 67% of corporate respondents saying that they prefer working with startups at earlier stages, mainly to explore new technologies and business models.
- Corporate interactions with startups are becoming mission critical
At an overwhelming 82%, corporations now view interactions with startups as at least somewhat important, and a significant 23% indicated that these interactions were mission critical.
- Corporate innovation models are still in their infancy
Despite this shift in thinking, corporate innovation models are still in their infancy. For most of the corporations surveyed, current attempts to work with startups are more often than not underfunded, and scattershot such that 25% of corporations responded that they did not know how much is spent on innovation per year.
- Entrepreneurs and corporates agree that strategic fit is paramount, but underlying goals vary
Both startups and corporations agree that strategic fit is by far the primary criterion for working together. 44% percent of corporate respondents cited strategic fit as the most important factor in success or failure of a given startup relationship. A slightly higher proportion of startups 65% saw corporations as potential strategic partners.
- No longer Us vs. Them for startups and corporations
A fundamental mindset shift has occurred. Startup/corporate relationships are becoming longer-term and more nuanced. Acquisitions and investments are lower on the priority list for both startups and corporates, while collaboration is high. A striking majority of startups 99% expressed at least some desire to work with corporates, with 67% saying that its mission critical to work together.
More and more corporations are entering the brave new world of engaging with very young startups, said MassChallenge President Mike LaRhette. ?Because the startup/corporate relationship is starting much earlier than it had previously, entrepreneurs are finding that they can uncover much more strategic value.
Both MassChallenge and Imaginatik are leaders in corporate-startup innovation. MassChallenge has been connecting startups with corporations since MassChallenge incorporated in 2009, and Imaginatik has has been working with corporates to innovate for over 20 years.
Corporate executives see enormous potential to innovate by working with early stage ventures, said Imaginatik Chief Marketing Officer Chris Townsend. The exact approaches are evolving constantly, but the trend is clear: startup/corporate collaboration is becoming critical.
For a complete copy of the report, please visit more.masschallenge.org/report1.
MassChallenge is the most startup-friendly accelerator on the planet. No equity and not-for-profit, we are obsessed with helping entrepreneurs across all industries. We also reward the highest-impact startups through a competition to win a portion of several million dollars in equity-free cash awards. Through our global network of accelerators in Boston, the UK, Israel, Switzerland, and Mexico, and unrivaled access to our corporate partners, we can have a massive impact - driving growth and creating value the world over. To date, 835 MassChallenge alumni have raised over $1.4 billion, generated over $575 million in revenue, and created over 8,500 jobs. For more information, please visit masschallenge.org.
Top MassChallenge corporate partners include: Cisco, EMC, IBM, Fidelity, Microsoft, PTC, Nestle?, Pepsico, Pfizer, UPS, and Verizon.
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Imaginatik is the worlds first full-service innovation firm. We are an advisory, software, and analytics provider devoted to making innovation a sustainable practice within the modern enterprise. Weve been named a World Economic Forum Technology Pioneer, and Forrester Research has cited our Innovation Central software platform as a Leader in Innovation Management Solutions in both 2013 and 2016. Our client list includes Cargill, Chubb, Dow Chemical, Exelon, ExxonMobil, Goodyear, John Deere, Mayo Clinic, TD Bank, and The World Bank.
Imaginatik was founded in 1996, with dual headquarters in Boston, USA and Fareham, UK. Weve spent 20 years helping the worlds largest and most respected companies innovate.
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