Marriage between big corporations and startups is not a new thing. Companies like Microsoft, Yahoo and Google have cooperated with numerous of startups through its existence. Nowadays, we see a lot of non-tech players like Coca Cola, Nike and even New York Times launching their own startup initiatives. Whether they are organizing hackatons or competitions, launching their own incubators, or dedicating serious budget for venture deals, large corporations are more and more present in the startup world. There could be many reasons why they find startups interesting. Some of them want to bring new products and services faster to the market. Other ones want to be up to date with the latest innovations and some of them are even using startups as a PR stunt.
Find a suitable partner
Whatever the reason is, startups should not ignore this opportunity. Having big brother next to you, could skyrocket your startup. Established corporations have means which startups cannot afford. Resources like access to a broad market, negotiation power or capital reserves are among few which startups could and should tap into. Something that means a world to a startup, like development cost, is peanuts for corporations. Therefore, if approached correctly, you can use corporations to remove obstacles in front of you and meet your higher goals.
Speedboats vs tankers
Even though there is a clear interest and benefit for both startups and corporations to work together, many times this marriage fails. Reasons for that could be many, but usually their common nominator is that startups and corporations do not live in the same world. Startups are like speedboats, they live in the fast paced world, full of shortcuts, quick turns and no looking back. On the other hand, corporations are big tankers. Their complex processes, many decision levels and even corporate politics make sure that once they are in motion, they are almost unstoppable.
To avoid mentioned pitfalls, and have serious gains from corporations, startups have to answer these 5 questions:
- What are your core values and how not to lose them?
- How willing are you to make compromises?
- Does this organization have what you need to skyrocket your startup?
- How to hustle your way in?
- You are in, now what?
Large organizations are usually closed systems or they are used to work with their peers. After some time, they forget that there are other companies which are not as structured as they are. That’s why answering on these questions should be the first step corporations should do, if they want to understand startups:
- What do you want to achieve with startup program?
- How can you set up your organization to keep up with startup's pace?
- Do you have what it takes to build your program around startups, not around yourself?
- How will you make sure that your organization is not pressuring startups with short-term goals?
- Are you able to manage the clash of different cultures?
Talking from experience
Without asking yourself at least these 5 or 10 questions, both startups and corporations would find themselves in deep waters. Missing the opportunity for cooperation is one thing, but making a swing and having the ball hits you in the face is all different game. It could cost you millions, reputation and can even damage your company. In the upcoming series of articles, I will show, to both startups and corporations, where are the hidden traps. Furthermore, I will bring you stories of many experienced entrepreneurs who went through this “marriage”. They will tell you, from the firsthand experience, what did or did not work for them and which road to take. As well, if you subscribe to the newsletter, you will find some useful advice from various business developers within large organizations. They will tell you how to approach them, what they look for in startups and what mistakes you shouldn’t make.
Where do you see the biggest challenges in cooperation? What are your top burning questions? With your assistance, we will ease a life of many people and answer these 10 and many other burning questions in upcoming series. Share your good or bad experiences with us in the comments below.