Top Tips for Easy Collaboration Between Startups and Corporations
Over the past few blogs, we’ve spoken of the benefits to both startup and corporation on working together. UBI Global has forged many business incubation/acceleration partnerships over the years and our experience has brought major success over many different countries and industries.
Big growth and big opportunities come with challenges and obstacles, no question. Let’s focus on what we’ve observed as far as hurdles that may arise and how to overcome them.
Innovation type, does it meet the hype?
Corporations aren’t always welcome to the type of innovation that startups bring to the organization. Startup innovations can be disruptive to the incumbent technology that the company employs and render their existing processes and goals obsolete. It’s not unusual or out of line for a corporation to prefer slow and steady growth to rapid change that a startup can bring. In fact, 85-90 percent of company innovations are of an incremental nature. Profits, however, are shown to be larger with the dynamic growth phase that a startup can offer.
Method to the madness?
The method of innovation required to work with a startup is perceived as high risk by the corporation, also a reasonable concern. Opening the company to external innovation can involve higher cost and new risks to the internal structure plus the return on investment is sometimes intangible or long term. Corporations may also fear their reputations if the collaboration goes sour.
Startups can be slow to collaborate
Some startup companies that turned down the offer of company collaboration did so because they didn’t want to be involved in a process that might stifle their creativity. A majority, however, just didn’t know how to forge the relationship or couldn’t find any interest in investment in their new idea.
Marathon not sprint
All the hurdles and barriers are understandable on both sides. Fortunately, our experience tells us that these can be overcome once any asymmetry between the corporation and the startup is lessened. For example, over the years the geographical challenge of two companies collaborating when they were located on different continents has lessened to the extent that it’s barely mentioned. Digital sharing of information is almost taken for granted these days.
Differences in company structure and culture, however, are a real concern as is the disruptive energy that collaboration with a new partner can bring. UBI Global recognizes this from both sides and works to outline how the collaboration will work on both sides, building a foundation of trust and a common set of goals. A solid outline of information, expectations, terms and conditions help speed up the decision making process and eliminate any power imbalances between the two parties.
Collaboration between startups and corporations is increasingly important for innovation and new revenue creation. UBI Global’s message here is that, although collaboration isn’t always easy, it is worth it to minimize the risk of your competition doing all the innovation and ignoring the opportunity for yourself. As for the startups, understanding the corporate concerns and working to address them can provide a path to success that is much smoother than going it alone. Let us find you the right collaborator to launch your startup right.
Source: Scaling Together: overcoming barriers in corporate-startup collaborations
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