More corporates are turning to startups to stay relevant, whether it’s to strengthen their existing innovation strategies, or to seek fresh ideas that can solve their problems in a faster and more cost-effective manner.
If you’re a startup looking to take your product to the next level, entering a mutually beneficial partnership with a corporate could just be your answer.
Startups are speedy innovators, but corporates hold the advantage when it comes to scaling a solution quickly. They also often possess robust resources and stable revenue to support the co-development of your product or service.
It appears to be a win-win situation, but the ride isn’t always smooth-sailing. Innovation in a corporate can be bogged down by bureaucracy, skepticism, or overly dictated by results and bottom lines.
Here are five tips on how your startup can build a successful corporate partnership:
1. Have honest conversations on the benefits of the partnership
Failed partnerships are often due to a misunderstanding between what the corporate is looking for and what the startup can actually offer.
If your corporate partner comes to you with a problem statement, ask them whether they are looking to solve a technical, financial or scalability issue. Elaborate on your product’s technical specifications and find out how they intend to incorporate your technology into their programmes.
It is important for startups to have honest conversations with the corporate’s senior management and innovation leaders. This is so they can get a feel of how receptive the corporate is to changes, and if they are ready to receive new ideas.
2. Set clearly defined KPIs
Corporates are obsessed with key performance indicators (KPIs), which guide them in their decision-making process. Startups should have a clearly defined proposal that goes into detail on the value they can offer to the corporate.
Do your research, outline what pain points you are addressing with your product, and pin down the exact KPIs you plan to accomplish over a one to three months period.
Ask yourselves: Are you saving them money? Are you generating money for them? Or is it a combination of both?
3. Validate your product and stick to your guns
Startups, especially early-stage companies, often face skepticism due to their lack of a track record. Therefore, you need to quickly validate your technology and prove that it is relevant to the corporate’s needs.
The best way to reduce skepticism is to show results. My advice to startups is for them to get a few successful pilot tests in so that they can earn credibility. Focus on the relevant experiments, rather than agreeing to a barrage of unrelated tests.
Large corporates may bombard with you with results-oriented questions, such as how much revenue your product can generate for their organisation, or how much fundraising your startup has achieved.
To avoid getting sucked into a “black hole” of endless interrogation, bring the focus back onto how your product works and why you are the right partner for the corporate.
4. Put together an “A” team
Team infighting is the last thing that corporates want in their partnerships with startups – it is not their job to worry about your dynamics or to intervene in team conflicts.
You don’t necessarily need a team that has all the answers. What’s more crucial is having a team that is resilient and flexible enough to pull through obstacles – this is key to winning the corporate’s trust. It gives confidence to a corporate when they know you can find a way around a critical issue, and that this will not break your team.
5. Manage expectations on both sides
Large enterprises turn to startups for quicker and cheaper execution of new products and services outside of the corporate framework.
However, both parties should align expectations. Startups and corporates tend to operate at separate paces and will need to navigate through different working styles.
Startups like to move fast and iterate quickly, which is almost the exact opposite of most corporates. But they also need to adhere to the structure and procedures of large organisations.
The most successful startups that partner corporates are the ones who have balanced between both of these things.