Best Practices of Startup Partnerships for Corporates

December 15, 2021

With corporate innovation becoming an absolute necessity for big corporations, the need to address the elephant in the room is becoming inevitable. Working with startups isn’t always the easiest task for established, strong-cultured companies. The sense of time, the amount of paperwork and bureaucracy required, access to resources, and even perspectives are entirely different. Using the following methods can help ease the struggles of seeing eye to eye:

Make a clear statement of the problem.

Corporations can have a more productive experience by defining the problem and telling startups their aims and reasons. Even if a business is unsure of its particular aims, saying "We would want to learn about your product" can help promote a more effective meeting. With this method, startups can make their pitch more informational and customized per the corporation's goals.

On the other hand, if a firm has a specific need, entrepreneurs can be more explicit in demonstrating how their goods or solutions would solve that need. This will allow both parties to have in-depth discussions about whether the company genuinely meets the corporation’s needs. Furthermore, this provides the startup with helpful input on the merits and limitations of their solution.

Consider Startup Fit

Corporations also conducted trials with startups to be seen as innovative. This harmed entrepreneurs because they wasted significant time and effort operating a pilot with a firm that had no intention of moving on to a commercial arrangement with the startup. Companies would conduct pilots only to discover that the startup did not fit within the company culture because different departments or teams divided on whether or not to proceed with the startup. Thus, before agreeing to a partnership, companies must examine whether a startup would be a suitable fit within their organization. Before committing to a POC or pilot, they need feedback and input from critical business units and decision-makers.

Provide Right Connections to Startups

Navigating the bureaucracies and structures of huge businesses can be difficult, but this process is made more difficult by innovation team members who cannot appropriately assist startups. Startups frequently encountered innovation team members who offered to talk to executives on their behalf but could not get the startup in front of corporate decision-makers. To prevent your company from failing in partnership processes with startups, members of the innovation team must connect startups with the resources they need to advance their ideas within the organization. They must put the startup in front of a decision-maker who has the authority to help the startup advance or make a decision about their implementation and partnership.

Make Post-Pilot Framework Clear

When companies complete a successful pilot with a startup, they frequently encounter difficulties integrating the startup's solution into the critical giant corporation because the product was novel to the organization. This occurs because the corporation does not know how to embed a new system within the company. It doesn’t have an existing framework or product to replace, so it takes longer to implement the startup's solution. Key elements such as the commercial budget and implementation timeline must be determined to avoid becoming stuck in the aftermath.

The corporation must decide how to proceed with the startup's solution so that the startup's future within the organization is not in jeopardy. While following a detailed plan for post-pilot implementation may be difficult, laying out a basic framework for proceeding after the pilot will result in a smoother innovation process for the startup and corporation.

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