Most of my entrepreneurial journey has involved developing either SME or products for consumers and corporates. Over the last few years with Dashmote, I have truly come to appreciate my relationships with corporate contacts. I have found that whether the contract be thick or thin, there is a lesson encompassed in each project. The purpose of this blog is to share the highlights and lowlights of my time spent collaborating with corporates.
Today’s world is forcing large corporations to drive innovation. The notion, “disrupt or be disrupted” is rooted in the corporate environment. To remedy the pressure for advancement, many corporations are turning to startups.
An overwhelming 82% of corporations now see interactions with startups to be “somewhat important,” and 70% of startups have successfully collaborated with a corporate at this point in time.
Collaborating with corporations is like a white-water rafting: You may get splashed in the face a few times, or perhaps even fall off the boat, but the experience can be truly rewarding if you are able to endure the ride. The thrill of corporate relationships stems from the risk involved. Although partnering with a startup offers huge potential for corporations, there is always a chance that the investment will not be recovered. With this in mind, collaborations between corporates and startups are often complicated. Corporations have conflicting concerns in the collaboration process: One is to protect the large-scale interests of their company, and the other is to invest resources in a startup’s success. The role of the startup is therefore difficult at times, as earning trust within a corporation is a demanding task. Despite the complexity of collaboration however, I have seen that startups and corporates can absolutely complement each other in the right setting.
Corporates offer a vast amount of data, distribution power, and customer networks to startups, while startups add value to corporations by building creative solutions and sidestepping long-legacy processes. Despite the advantages it presents, cooperation between corporates and startups is rarely ever seamless. With this in mind, there are a few tactics that I have found to be highly effective when working with corporates.
Connecting with Corporations
Establishing a common purpose is the best way for corporates and startups to connect. Collaboration works best when everyone is tackling the same challenge. Innovation departments are meant to cultivate innovation within a corporation, and although it is not necessarily in their job description to work with startups, innovation departments often include startups in their recipe for advancement. I recommend that startups first target the department of the end user (in our case, the marketing department) and secondly the innovation department, rather than engage in internal incubators, purchaser offices, corporate venture capital, and hackathons. Based on my experience, the most meaningful corporate relationships evolve from coming together with the end user to solve tangible problems.
Mentor relationships are another great way for startups and corporates to develop a strong connection. When it is mutually educational, collaboration is worthwhile for everyone. Dashmote’s relationship with PwC is a perfect example of this: We received valuable advice on data analytics in exchange for giving a workshop on the startup methodology of growth hacking.
Pilots are also a worthy endeavor for startups. They give corporates a quick, comprehensive explanation of how a concept works. Once companies have an idea of a startups capabilities, they can build a strategy from there. In addition, startups should not limit themselves to free pilots, as commitment fees can convey the time and attention put into a presentation.
Developing a Long-Lasting Relationship
It takes time for startups and corporates to establish solid relationships. On one hand, corporates must understand that a startup’s budget structure, decision chain, and capacity are quite limited. On the other hand, startups must realize that corporates don’t work with the same flexibility, and it may take months to get everyone in the same room for a quick 30 minute meeting. A shotgun approach is often the best way for startups to distribute information to corporates. That is, startups must take a dynamic, responsive approach in order to accommodate the corporate workflow.
Although it may involve late nights and extra shots of espresso, startups should aim to overachieve on corporate projects. Producing exceptional results helps build valuable business relationships. A startup’s prominence within the corporate community not only leads to second-time collaborations, but also opens the door to stakeholders of various business units. Especially with the professional world growing increasingly more interconnected, personal relationships are vital in boosting credibility in future business endeavors.
In addition, it is essential that startups have a clearly-formatted documentation method in order to spread and update their community. This allows followers to come along on the startup’s journey. Onlookers will further invest themselves in a startups endeavors if they are aware of recent happenings. Without active social media channels, startups can fall irrelevant within the outside world.
Collaboration in Action
Scaling the project is one of the most important steps in the collaboration process. The key to scaling is figuring out the balance between the KPI/deliverables and the pricing. Having direct conversations is essential in establishing a transparent relationship between companies. Startups shouldn’t be afraid to set the KPI, as this shows professionality from the startup. Moreover, collaboration can be scaled quicker if corporates have a proposed KPI to contemplate.
Regardless of how well-planned the collaboration process is, there will always be cultural clashes between corporates and startups. It is important that both sides attempt to understand the perspective of the other. It’s not that either business model is better, it’s that they’re just different. Startups can reduce strife by recognizing the way bureaucracy functions before engaging in corporate business. Corporate collaborations often involve unfortunate realities such as slow payment terms and an abundance of time-consuming meetings. Proactivity is the best way to combat these obstacles, allocating the adequate time and resources to the collaboration process.
Although collaboration may seem hectic at times, startups can find peace of mind in the inherent benefits of working with corporates. Engaging with corporates allows startups to bring their creativity into the limelight and validate new ideas with actual clients. Indeed, the cultural differences are taxing to deal with times, but these cultural differences are also the reason startups and corporates balance each other so seamlessly. From collecting insights for TUI to inspiring new products with Phillips, it is clear to me that startups and corporates have a lot to offer each other. After all, it isn’t so bad wearing sports coats to meetings every once in awhile...