Collaboration is essential in a world led by a constant quest for innovation. Large enterprises and startups need each other to survive and thrive in this rapidly changing digital landscape. Their strengths, weaknesses and differences, when brought together, create a win-win situation.
Many large enterprises are tapping into the startup ecosystem, which is evident by the rapidly increasing number of startup accelerators, incubators, and corporate venture arms of large enterprises.
Strength of startups lies in agility and innovation, and that of large enterprise, in its brand equity, stability, and maturity in handling business. By design, startups are small and tend to be agile in decision-making. They rely on innovation, and do not hesitate to pivot and quickly change their course if required. Large enterprises have well-defined organizational policies on every aspect of business operations, be it sales, operations, finance, and last but not the least, culture.
Onboarding the agility of a startup into the regular functioning of a large enterprise is not a straightforward task, given the different mindsets of the involved stakeholders.
Some large enterprises are successful in onboarding startup innovation into their regular operations with great outcomes for both parties. In this article, we look at some of the critical enablers for successful partnership between startups and corporates.
Enablers of successful corporate-startup partnership
Building trust between stakeholders is a key success factor. Startups tend to be suspicious about the motives of large enterprises and apprehensive about outcomes. Transparency and clear communication on how and why a particular startup solution is being explored should be made clear by both parties, of course, after ensuring proper legal protection to the conversations through execution of mutual Non-Disclosure Agreements. Increasingly, large enterprises are designing appropriate joint operating models and right contracts that sufficiently address the concerns of a startup.
Plan beyond the proof of concept
Any innovation solving a pain point may instantly get the attention of enterprise stakeholders. Proof of concept becomes an immediate next step for both parties to estimate the benefit generated. Successful relationships have a clear plan on how to operate post PoC. Some of the questions worth answering at this stage are:
- What should be the joint go-to-market strategy?
- How to enable awareness about the newly found joint capability within the large enterprise?
- What time frame is apt for setting milestone-based sales cycle common to their industry?
- What will be the operational steps like legal and risk clearances, vendor onboarding, and joint marketing collateral creation?
Human relationships get better with frequent meaningful connects and respecting the differences. Startup-corporate partnerships that have already passed the two factors -- Trust and Plan beyond PoC -- need a good governance mechanism to enhance collaboration.
The governance mechanism should be based on the underlying strengths of both parties and harness the abilities generated when these strengths are effectively combined
Large alliances require attention from the senior most leadership of startups -- at least in the initial stages. Also, monthly connect between both parties should be good to start with in the initial stages. As joint business takes off, more frequent connects (weekly, biweekly) becomes inevitable to enable smooth operations.
An informal channel between both parties to connect on-demand helps significantly in the initial stages as this is the time both parties are learning about each other.
Capability and capacity building
Anything new involves training and capacity building. A clear quarterly plan on how to train identified people in both organizations on the new capability building, certification programs and recognition of new achievements is vital for organic growth of joint relationship.
In the process of relationship going from ‘zero to one’, some disputes on how to conduct joint business may arise. A clear plan to recognize sources of dispute early and have remediation mechanism with appropriate escalation matrices in both organizations is key in handling tough situations.
Winning with collaboration
Several interdependent factors make a startup-corporate partnership successful. It would take 2 to 3 quarters in getting all factors in place. However, once enabled, both organizations maximize growth opportunities and share great benefits.
Using the experience built over years in working with the global startup ecosystem, Wipro can help build successful outcomes through effective partnerships between innovative startups and large corporates. For more information, kindly reach us at firstname.lastname@example.org