Innovation continues to take an increasingly crucial role in corporate growth, with many different flavours and forms being employed worldwide. Open innovation – developing external partnerships – is a key component of a corporation’s toolset, as a rapid and effective method to achieving their goals.
Despite this, creating meaningful and enduring relationships between a corporation and a startup can be incredibly difficult. For many global businesses, collaborating with startups can be seen as a risky, ineffective, or small-scale exercise (read our Top 5 Tips for Partnering with a corporate here!). From the startup perspective, engaging with corporates can be an unnecessarily tortuous and torturous experience, if handled poorly.
To get the most out of your innovation strategy, it is essential to leverage the power of startups that are building solutions faster and potentially better. At The Bakery, we fundamentally believe that if you have a problem worth solving, then someone, somewhere has already solved it (or at least an aspect of it!). So rather than build in-house, why not partner with these startups? To cultivate effective partnerships with startups, it is essential to have the right building blocks for this relationship in place. Don’t know where to start? Well, we’re here to help! Read on for our top tips…
Tip 1: Know Yourself
The common factor in any partnership is always you, your business, your quirks. If you don’t know yourself, how can you expect them to?
- Work out why you’re doing this. Anyone can spend a year playing with startups, but if you don’t know what you’re trying to achieve, no matter how vaguely, that’s all it will be. You need to start with a goal / a customer need / a business challenge and the roughest idea of what it could be worth to you.
- Understand what makes you tick (as a business). Who will you need onboard to test, evaluate and grow a new innovation, outside just you and your immediate team? Do you typically need more senior sponsorship? Do you have any relationships in Compliance, Procurement or InfoSec you can call on for support? Before you speak to a startup, even if you can’t get a streamlined on-boarding process in place, make sure you know who and what you’ll need to get them over the line.
Tip 2: Communication Makes the World go Round
Partners come in many shapes and sizes. Some are strong and silent, others are not. Regardless, you’ll still need to understand each other to actually get anywhere.
- Get to know each other. Assumptions, on either side, lead to delays and blockers down the road. It’s vital to ask the right questions, even (sometimes especially) if they seem obvious. Beyond the grandiose vision they paint, it is important to consider what the startup can actually deliver for you now, how fast do they expect you to move, and what assumptions have they made about your internal tech?
- See them for who they truly are. A startup will be culturally and structurally different to your organisation. They won’t have limitless internal resources and they will operate on fundamentally different timelines to you; “quick” for them may be an afternoon, not a month. Stay mindful of, and don’t get spooked by, these differences; you won’t get frustrated when they’re confused why procurement is taking 2 months, or inadvertently overload them with a 300-page contract. They can grow with you if you let them.
Tip 3: Relationships go Both Ways
We know, who’d have thought…
- Split the bill. While hungry startups may be happy to do more for less when first working with you, don’t take advantage of this. You’re looking for a partner, not a fling. Don’t ask for free work, at least cover their costs; a rounding error for you could be hugely significant for them.
Tip 4: Keep it Fresh
Making quick and clear decisions will not only get things done, but shows you respect their efforts.
- Don’t “ghost” or lead them on. Time is a precious resource for all startups. If something isn’t right, be direct in your communication with them and either call it quits or find a new way forwards. 4 weeks may zoom by in a large organisation, but for startups, that time could be a large part of their runway. Given they don’t have unlimited time and resources, make sure you don’t leave them on the side of your desk for months with no clarity.
Tip 5: Plan Your Future Together
As with any partnership, you’ll need to start as you mean to go on.
- Think big, start small. Before things get too serious, it is imperative that you evaluate how your working relationship may look in the long-term. By running iterative projects, you will be able to establish if a startup can solve your problem and if they are a good fit for your business. Most importantly, you’ll be able to gauge what your future working relationship could look like.
- Know where you stand. You have your goals in mind, and they have theirs. Managing each other’s expectations and having the important conversations early on (e.g. setting aside budgets) is key. By keeping in mind what you’re there to achieve and knowing what they’re looking for to grow, you can plan a path forward that delivers for all sides.
While every partnership will have its nuances, we think that these tips are a great place to start. As we’ve always advocated, to be truly effective, your corporate innovation journey hinges upon bridging the cultural divide between your organisation and a startup’s. Fostering and cultivating a fruitful partnership with a startup will make your innovation process more nimble. So let us know, which of these top tips speak to you the most? And do you have any tips of your own? We’d love to get your feedback, so get in touch!