Digitalization is THE new buzz word among the corporate world. It has forced companies to change the way they perform operations. A majority of companies now desire to collaborate with startups that bleed innovation and are capable of bringing a revolution in the world of technology. However, this unison is by no means a cure-all for the existing setbacks. Reason? Not all become a success. Here is my experience from over six years of working at the intersection of corporate and startup world.
10 points corporates should think of before working with startups
1. Every business is unique
Alike humans, businesses are also unique. They have their own distinct ways of carrying out operations which is the first thing that needs to be acknowledged when thinking about joining hands with a startup. The idea can be useful for the corporate looking to pitch events and large-scale formats. For others it might make more sense to open up gradually as they begin to build trust with the company.
2. Get support from TOP MANAGEMENT
Whatever be the case, it’s important to keep the top management involved. To ensure the entire company believes in the step you are gonna take, the top managers can play a key role. Involving them sets the motion and gives a snow-ball kinda effect. And if ever you get stuck in some issues, solutions can be easily discussed. It is in the nature of startups that only a few succeed, therefore, support from the top management will keep you on the safe side. Research shows that corporates, where innovation is at the top of the agenda are much more successful than corporates, that delegate the topic to middle management.
3. Maintain a win-win situation
When startups and corporations come together, it may be a feeling of starting afresh, a sort of real cultural shock. Startups do not have a finished product in their initial stage of operation. Therefore, it is all about devising a strategy that benefits both you and them. Corporate partner with startups with a hope to expedite their technological growth and receive access to it before their competitors do. Make sure to keep it a win-win.
4. Money alone cannot guarantee success
Money can buy everything but happiness. And, above all it cannot buy you success. Long-term rewards can only be expected when you dedicate your heart and mind towards what you wish to achieve. In a practice to buff up their image or gain wins quickly, some companies may sponsor startup accelerators, however, to stay along the course and remain competitive consistently, real commitment is a must. This means investing not just capital, processes, developing interfaces and hiring employees, but also developing a sustainable strategy that can be applied into completing the program. That’s one way to sort the wheat from the chaff.
5. Developing new standards
We often hear the phrase “devil is in the detail”. This is why it makes sense to develop new standards and strategies for a long-term co-operation that would also help accelerate internal processes and issues related to supply conditions, privacy policies and terms and conditions. These complications can further bring issues with co-operating over innovations. If you find yourself stuck in such a situation, a neutral partner familiar with similar processes and standardized contracts can help.
6. Speed Speed Speed
The speed of communication and decision-making abilities can really tell a difference between a startup and the corporate. Startups usually employ technology that is fast and comparatively advanced. Whereas for corporate, the wheels turn rather slowly. It is the same when it comes to making investments as well, as they do it with common consensus and through committees. Therefore, finding a middle ground and finding help with expectation management is essential. Communicating openly and transparently about problems and seeking to speed up processes is important.
7. Communicate responsibilities
The reason startups are unable to get direct answers towards happening of a partnership deal is that they are not able to communicate with the right person for the job. Communicating with the right person can be helpful as it will lead to connecting with the appropriate people within the organization and therefore the responses will be quicker. Designate one person within your organization for dealing with startups which should be visible on the homepage.
8. Many paths lead to rome
Taking one step at a time is a prudent exercise, they say. However, if you are looking to push innovation forward, concentrating on just one aspect is having a short-sighted outlook. In the competitive business environment, variety is the key to success. An accelerator for example, is the best way to approach innovative ideas and try your hand on new technologies. Building companies on the other hand, is the right kind of approach for those who wish to have full control on their technology. But, don’t forget to take care of your own employees. Just make sure you maintain a holistic approach that gives your employees an opportunity to participate in the speculative ventures. Internal innovation competitions can be implemented if you want to keep a balanced approach.
9. M&A isn’t meant to be all
If you are working with startups keeping a content perspective, you are likely to get results faster than most companies. According to a study, around 65% of startups, a strategic cooperation partnership with the corporate is of interest and for 67% of the corporate it is important to test new technologies and experiment new business models by working with startups. A surprisingly mere 25% of the corporate aim for acquisition and 14% of startup actually look for an exit. These statistics prove that M&A is not meant to be everything you should be doing.
10. Celebrate your startup heroes
Though last but not the least, plan on creating internal measures and opportunities to recognize employees who proved instrumental in working with startups. This won’t just motivate them, but will also prove an example and a source of motivation to others in your group. This will also help promote the internal culture of working with the startups. Again a win-win for you!