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Why startups and corporates should partner

Collaboration Community Crowdfunding Global challenges Innovation Startups

Partnerships are just one potential way for a companies to achieve value. Corporates have the distribution, the customers and the brand, and startups need that. But there is a serious warning to executives. At the current churn rate, 75% of the S&P 500 will be replaced by 2027.

What would it be for the rest of the world? To survive and thrive, leaders of industry must “create, operate and trade” their business units without losing control of their company. Governments do not face the problem of losing their company or grip, but that itself is already a great reason for them to partner with startups. Because that ‘sense of invincibility’ is an apparent weakness in creating value.

A sense of invincibility is bad for business, if that is your business
The Dutch have long been traders and entrepreneurs, creating a legacy of global companies among others Philips, Unilever, Shell, Heineken, ING and DSM. And relatively new ones like TomTom, Endemol, Booking.com, and ID&T. The Netherlands is also country where startups sprout, according to the report, “CITIE: City Initiatives for Technology, Innovation and Entrepreneurship”, the top five cities rank the Dutch capital. Amsterdam is obviously benefiting from a rich university and ‘close city neighbours’ environment in the Netherlands

How can I partner in the best way?

To accomplish and set up a fruitful partnerships. The most important question is: Why would you even want to partner with these companies? There’s plenty corporations and governments do wel. Understand they have the power, the customers and the brand. As a startup you’re in the progress of needing all that, either now or in the future. To align it with your mission is important, this way it makes sense you want to knock on a conglomerate organizations door to create a win win situation.

A startup’s time and resources are increasingly limited, the end of runway is always approaching, this makes you agile, focused and this is your strength.

Be clear about the why and consider if you need to partner with a company which is different from yours.

First, two notable examples

Here’s big The Hague based automative company, strategically investing €2 million in a peer to peer car sharing service from Utrecht. I can see why this works, do you? The Netherlands is so compact that it does not matter they are from different cities in this startup nation.

autobinck signs with snappcar

In another example you can see where a big company is lacking in service, so they fill the gaps with giving a startup an opportunity to solve that problem. IKEA approached GoGet for the initial deal. Even for a customer it’s clear why this works. This example also points out the collaboration does not need to be speficially in collaboration with the company headquarters.

So how can government and/or corporations work more with the challenging underdog companies (startups) and people to harness local community and create value?

Rules of engagement, as a startup

  1. Be clear and straight forward what the win win is. Do your research. Check the other partnerships they’ve signed and see if it’s something they do often or would like to. It’s crucial to check n the individual employee level, and on the (global) brand level if this can be a match.
  2. Spread your chances. All your eggs in one basket is probably not a good idea. Divert your time and resources only to the companies that are willing enough, and can invest the equal amount of time you put in.
  3. Talk to the right people in the organization, it kills spirit to do three meetings and found out you’re talking with the wrong people. You need the people that can pull the switch. Find the winner, who is credible within the organization. This should be a well-regarded person, willing to stick his or her neck out for you. There’s an intro at every corner, great employees tend to flock events and everywhere on the web.
  4. These are one of these things that work hard setting up while remotely. It’s key if you want to cook up a partnership, go to the place where you need to be with a deadline and the people in the organization you partner with see you are serious.
  5. Think in basic principles. We need this and we offer this, and the other way around. Corporate slang can be vague and stagnating, be as concrete as possible. This helps in the conversation with the company but also with the users/customers. They should understand in a split second why something is helpful. Make it work simply.
  6. Corporates are precious with their brand and image (within hierarchies even more). So it’s important to partner in alignment of the goals with the brand. Do not step on each others toes, enhance both experiences in a smooth way. Be aware you as a startup are more agile, and the corporate is less agile, that’s not particularly a bad thing, just understand changes are easier for you to make.
  7. Show your social proof, meaning your validation in the marketplace. No corporate executive is going to gamble their brand and resources on merely an idea. You should have some traction and evidence somewhere in the world with the right kinds of user/customers. Your startup doesn’t need to be ‘a unicorn’ valued at multiple billions, but get your facts and data straight.

Start optimistic, but be realistic.

If all this does not work there’s always room for ‘disruption’. Being the underdog is exciting and if you can show you’re doing your small part in the world then have a go, failure is always an option (or try again to partner in the future).

As corporation or government

  1. The speed at which a startup can operate can be of value to you. Setting up a small team yourself to achieve something is possible, but they are still employees, they fight a different battle than startups. Startups are empowered by the right goals: their own. But as a startup team is separate company it can be great to have an agile team working on solutions to your (global) challenges.
  2. Check out AngelList, gust and Product Hunt for the hottest startups and teams in town to partner with. Talk to them on Twitter or LinkedIn (or even Facebook), be clear about what your goals are, invite them over for coffee and talk them over any details you have, you’ll learn a lot from them from doing this alone.
  3. NDA’s and contracts scare people in a way that you’re saying “I don’t trust you”. As if you know something they don’t, I think you can better assume the opposite, you know less than they do. Be humble, straight forward but it goes without saying sensitive information to your company should handled with care (they’ll understand).
  4. Doing it stealthy is always an option. You have some cash to play around and you need to test something, hire a startup ‘under the table’ to test the waters. They often know best, and they can work under their flag so your brand will not be touched. If you are ready and if everything is stable, launch together.
  5. Partnerships can also be the test a relationship that can lead to an acquisition. The hunger and agile of the professional world are the most attractive ones. Next to your employees learning from hackers and founders they can be a great fit to build the future of your company.
  6. Stimulate your employees to go and attend meetups, conferences and product launches/demo’s at universities and accelerators. Check out Lanyrd and Meetup and don’t be shy to host interesting sessions and get togethers (or hackathons) yourself in your canteen or a centered place. This way you surround yourself with the eager people from your industry.
  7. Partner and work with universities, incubators and/or accelerators, or create your own! Offering programs can attract talent and can make your company look cool and attractive for everyone. A place to discover these catalysts is F6s, and go talk to your local universities.

Understand you’re big, but not the particularly ‘cool’.

Talking with the hottest startups is not enough, working with them shows you’re made for collaboration and can handle calculated risks like launching something new and exciting.

One more thing

how startups and corporates are introduced define the relationship. If the first connection is warm and at a relatively senior level, that’s best. First base can be informal or formal, just understand we are all human and the companies we sweat away at each day align with our personal goals (well, I hope so… or else quite your job right now!). Humans keep both parties accountable, responsive, and prevent from doing anything weird.

To close up with a nice little bonus ‘inside-info-fun-fact’. Corporates and governments love to have meetings. They are meeting craving people, cramping up agendas with conferences and face to face time. Does this work? Aren’t we support to work more and meet less? To make a case against that, studies show virtual brainstorming actually works better than putting your heads together at one physical location. Meetings are important, but to that effect, the loudest or the most popular people in the room always tend to win this ‘game’. And these people often might not be the smartest in the room. That said, meetings are great, only make them practical so they work best.

It can really benefit companies to partner, keep the why in mind and you have that projected (upwards) hockeystick curve in no time! Check out the Impact map we made here on Impact City to have a closer look at the interesting companies around.

By Milan van den Bovenkamp