Startup Collaboration – making it work in the long term.
Startups are a great source of external knowledge that corporates can widely benefit from. Mostly young enterprises bring new, fresh, and ground-breaking ideas to the table pushing the barriers of innovation and reshaping our understanding of existing markets. Corporates as such, value startups as a key piece for their innovation puzzle, it is estimated that 98% of European companies will have implemented some sort of innovation collaboration program with startups in the next two years.
Even though corporates are willing to work hands on with young enterprises, the reality is that only half of the collaboration programs are successful. Most of the times companies struggle to understand the culture and working methods of startups and vice versa, leading to frustration and failure. This is a recurring issue that causes great pain for innovation managers! To avoid these mistakes, we at acccoi have put together a list of the most common triggers for startup-corporate collaboration programs:
Setting an accelerator program outside of the corporate can be a successful marketing tool that will most likely fade as quickly as it came. To be able to achieve tangible results the group must be involved, including the relevant business units. By developing use cases internally, both the startup and the corporate can make full use of the resources available and thus benefit from the numerous advantages that this set up provides them with.
Young companies and large enterprises are known to have opposed dynamics and very different work ethics. Misfit in the organizational cultures can lead to a clash between the teams and result in loss of motivation and productivity. To be able to cooperate in the long-run and develop successful use cases companies need to examine if the opposing culture aligns with their expectations to prevent inefficiencies during the implementation.
Startups operate in a very dynamic manner, taking decisions quickly and implementing changes in the blink of an eye. Corporates on the other hand, have extensive approval processes in place that can delay a decision for months. This difference in decision making processes can lead to frustration and failure, as such it is important that both sides understand each other processes from the onset.
Early stage startups appeal with their dispruptiveness. However, finically speaking, they are very fragile. The reality is that only 1 in 10 startups succeed in the long run, making it a risky investment for corporate which usually work on a long-term outlook basis. In order to avoid misinvestment, it is recommended to go through a thorough evaluation process and get a true picture of the startups capabilities.
Startup collaboration programs are usually very effective in the short-run, use cases are developed and tested. However, companies often neglect the implementation phase, preventing those developments from entering the market at a later stage. As such corporates should maintain a long-term business objective for each use case.
Taking a step back during the set-up phase and examining each of the above-mentioned issues can help boost the success rate of the program. Making sure that both sides are aligned is key and should be a priority when implementing a startup collaboration program. Although some of the topics are straight forward, we underestimate the negative impact they have in the long term if they are not dealt with at an early stage.