Let’s Talk: Startup/corporate collaborations
Collaborations between startups and corporates can be a fantastic way for the former to build brand credibility and gain scale and for the latter to innovate quickly. Of course, not all collaborations are guaranteed to bear fruit.
For this week’s “Let’s Talk…” feature, we asked nearly two dozen thought leaders to identify the key ingredients for a successful, win-win collaboration. Responses included cultural alignment, mutual benefits, open communication, knowledge sharing, trust, clearly defined expectations including desired outcomes, patience, a commitment from each party to work shoulder-to-shoulder towards a common purpose, and freedom for both to ‘be themselves’.
Read on for further insights from this week’s lineup of commentators…
“What is the key to a successful startup/corporate collaboration?”
Michael Caggiano, Chief Commercial Officer with ONTHEGO (OTG): “The key to a successful partnership between a startup and a corporate is for both parties to let each other be themselves. Both parties need to recognise that each entity has its strengths, values, and ways of operating that can contribute to mutual success. Both parties should embrace those values and not look to always change each other. Each type of organisation is at a different stage of its evolution, and maturity, and all parties should recognise that and look to embrace the qualities that underpin the reasons they have collaborated together in the first place. A corporate may be looking for a new nimble way of doing business while a startup could be looking for the scale, a captive audience, or validation in the market that a corporate can provide. Challenging each other to be better or different is always healthy, but understanding what success look like for both parties from the outset helps frame the partnership.”
Mel Gollan, Founder and CEO of RIP Global, and 2018 SBE Australia Springboard Enterprises Accelerator Program participant: “The key to a successful collaboration between a startup and corporate is having a great partnership. Each party must have a clear vision of the value of the partnership and what the other brings to the relationship. For startups, the benefit of collaborating with a corporate is speed of delivery and leveraging a corporate’s power and reach. For corporates, startups help them innovate and become more agile. It’s a win-win.”
Emma Lo Russo, CEO of Digivizer: “Collaboration means person-to-person all the way in your own company – and in partnerships externally, company-to-company. Collaborations work best when everyone works towards a common purpose – and you want partners who believe in your vision and see strength in working shoulder-to-shoulder towards that common purpose. You want a win for the end customer, for the person or organisation you are serving, a win for the collaborator, and a win for yourself. When these are aligned, real magic happens. Right now, we’re rolling out the closed beta version of a new digital performance measurement platform with our customers, explicitly collaborating with them to ensure we deliver value. Who else would be as well-qualified to provide us with feedback?”
Andrew Joyce, Co-founder of Found Careers: “The number-one driver of collaboration is trust. The opposite is also true: a lack of trust will completely kill any ability to work together. Each side needs to be honest and upfront with each-other and ensure they’re very clear when communicating what they’re looking to both give and take from the relationship.”
Rebecca James, CMEO of Prospa: “When it comes to picking partners – startup or corporate – the most important thing is to be sure you have enough in common. The differences in operating models and organisational structures can be vast, and when it comes to collaboration, success ultimately relies on your similarities. While partners will bring different perspectives and skills to the table, a strong foundation of cultural alignment is a must.
“When it comes to Prospa’s partnership with Reckon Loans, for example, our shared customer-centric values have meant small business owners are at the centre of everything we do together. Teams that are genuinely in sync, who communicate often and clearly, and have complementary and shared priorities are the ones that will generate incredible results.”
Maria Bellissimo-Magrin, CEO of Belgrin: “Don’t be afraid to share! As business owners, we often find ways to generate more revenue – this is normal. In the early days, we’re everything to everyone and try and manage it all on our own. The reality is, if we share and call in experts and collaborate, the outcome is far more successful, the client is happier (usually) and for the most part, objectives are achieved. There is plenty of business to go around, and far more so if we collaborate. Research and ask for introductions to partnering businesses and trust your gut. Do they share the same values as you? Do they produce good work? Don’t be afraid to ask questions. Your name and reputation are on the line after all.”
Tony Ward, Country Manager at Dropbox: “Collaboration and knowledge sharing are the key pillars upon which great ideas and businesses are built, so in that sense collaboration is a key driver of innovation. Collaboration enables diverse and cross-functional teams – internal, external, local and global – to come together to find new, creative ways to solve complex challenges in real time. Instead of working in silos detached from each other, businesses can leverage technology to break down barriers, creating opportunities to not only drive efficiency and productivity but to create ‘collisions’ of ideas – this is when creativity happens. Businesses are also using collaboration as a way to increase the speed and quality of decision making. Speed is the new currency of business and organisations that can iterate and innovate quickly will be more successful.”
Chris Chang, Program Manager with Techstars Adelaide: “How do startups and corporates, seemingly on opposite ends of the business spectrum, play nice…and win? A mutual realisation needs to occur: corporates need to acknowledge they’re clunky and fraught with bureaucracy. Startups must realise that they have (in many cases) adopted poor process in order to move quickly. Corporates have something startups desperately need: networks and money.
“Once these realisations are made, the mutually beneficial outcomes of collaboration are realised. Then, expectations must be set. What can and cannot be achieved? Objectives and key results must be mapped out and agreed upon by both parties to even the playing field and create a definition of success. Finally, accessibility and communication must be prioritised. Slow sales cycles and process can often strangle small businesses, and updates from overloaded founders can be difficult to obtain. Access to direct channels and people can make the difference between closing a deal and burning very valuable startup runway.”
Barbara Sharp, Founder and CEO of Pax Republic, and 2018 SBE Australia Springboard Enterprises Accelerator Program participant: “The key to a successful collaboration is having a mutually beneficial relationship. If big companies can assess the risks of working with a small company and then set up fast-track procurement processes that manage those risk, then that is mutually beneficial for both parties. The best partners go shoulder to shoulder and transfer knowledge in the partnership. For startups, collaborating with a corporate brings speed and cash, which is important for facilitating growth. While corporates benefit from the speed and agility startups can bring them.”
Tim Bos, co-founder of ShareRing: “A successful startup-corporate collaboration involves cultivating a strong, cross-cultural relationship. You have two fundamentally different cultures coming together so there is a need to recognise potential cultural clashes and build some grace in the relationship for flexibility and forgiveness on both sides. For example, startups often have a strong, ‘innovation’ imperative in their DNA, while corporates tend to have a strong ‘reliability/performance’ imperative in theirs. Essentially, the key is to manage expectations fluently: expose them, find points of agreement and regularly check in to see if things have shifted.”
Karen Cohen, operations manager, Blockchain Centre: “Despite the mismatch in culture, startup and larger organisations rely on each other. Startups are agile in their pursuit of future success – they are not afraid to make mistakes and keep trying new ways of doing things. However, they can always benefit from the large, established investors who have the financial backing to turn an idea into reality. When looking for investment, startups need to clearly articulate their value to the corporates and understand the market needs.
“Larger, more established companies don’t always have the time and money for R&D, but they can partner with a startup and launch a new idea quickly. At the Blockchain Centre, we facilitate startup and corporate collaboration through various initiatives we run, such Block Engine, Melbourne’s first blockchain incubation program. We have an ongoing commitment to connecting startups with technology partners, investors and services such as legal, accounting and recruitment.”
Georgie Drury, Founder and CEO of Springday, and 2018 SBE Australia Springboard Enterprises Accelerator Program participant: “A truly successful startup-corporate collaboration should be three things: paid, manageable and accountable. First, a paid partnership recognises the startup’s expertise. This could include paid workshops or roundtables to plan the project. Second, the partnership needs to be manageable. It is best to start small, see what works and get some wins, then scale up. Third, there needs to be accountability. Each side should have formal KPIs with timeframes and exit arrangements in place if things don’t work out.”
Chris Ball, Head of Partnerships at BlueChilli: “I’m not sure there’s ‘one key’ to successful startup/corporate collaboration. But starting at the beginning with the basics, both startups and corporates must be clear on what they want and what they can deliver. Furthermore, what they can deliver must be communicated such that it makes obvious the massive value on offer for the other party. It sounds simple and it should be, but failure to communicate clearly and compellingly is all too common and it goes both ways.
Mark Fletcher, CEO of Cohort Go: “Startups and large companies bring each other immense opportunities through collaborations that, if harnessed correctly, create win–win situations for both. The key to establishing a good startup-corporate collaboration lies in relationship building through open communication and trust. It takes time for startups and corporates to establish solid relationships. Although it may involve some late nights, startups should aim to overachieve on corporate projects. Producing exceptional results helps build these valuable business relationships and create brand credibility, which leads to further opportunities.”
Ruth Hatherley, Founder and CEO of Moneycatcha: “It’s important to blend the startup qualities of agile, nimble and fast with corporate values of professionalism and risk/security management for any collaboration between the two to be successful. They should also treat each other with respect but consistently push the boundaries on both sides in areas such as innovation. Corporates must be prepared to experiment by investing in pilots – this includes trialling new technologies and testing traditional organisational thinking and processes.
“Startups must be able to calculate and articulate the specific value they will drive and deliver to the institution in both a pilot and full-scale engagement. They must understand how to build a business case for the corporate to engage with them and offer to provide evidence or assistance in that being created. Startups should engage the corporate team members in the creation of the project documents/timelines etc, so they buy into the project early and help deliver it successfully. It is imperative that star-ups have in-house domain expertise. They should learn and use the right taxonomy/language and be part of the project leadership onsite to keep driving projects forward at the right pace.”
Jonathan Jeffries, Co-founder of Think & Grow: “For a startup-corporate collaboration to work it’s important for both parties to agree on a working framework and to set milestones and deadlines to keep each other in check. Startups should clearly identify the needs of the corporate and obtain sign off from the corporate’s C-level execs as early as possible in the engagement cycle. Ensure that the appropriate users and purchasers of the startup product are in the room when doing any demos. Startups must be certain they can actually scale according to the corporate’s pace (in terms of technology). Learn fast and if there are road blocks, move on quickly and don’t let it drag.”
Claire Morris, Founder and CEO of Prezzee, and 2018 SBE Australia Springboard Enterprises Accelerator Program participant: “The success of any successful startup-corporate collaboration is making sure there is value for both parties. Corporates are key to giving new brands and startups visibility and trust when entering a market. Corporates validate a product or service announcing to the world that a startup has genuine product market fit. This is great for any new business trying to forge the way forward.
“On the flip side, corporates get to leverage new and emerging technologies. Startups will have their own USP which corporates can use to add value to a solution they may need. In our case, Prezzee is a platform to send digital Gift Cards in both B2B and B2C markets. We now have over 500 leading Australian businesses using Prezzee Business to send eGift Cards. Part of our success has been through early partnerships both with corporates and our retail partners.”
Vu Tran, Co-founder of GO1 .com: “For me, the key word in this question is collaboration. I am reminded of Stephen Covey’s 7 Habits of Highly Effective People and the idea of ‘Begin with the end in mind’. The ideal end outcome of any successful collaboration is one which creates value for both parties involve. A win-win for all.
“In the circumstance of a startup-corporate collaboration, clearly and openly defining the desired outcomes for everyone involved right from the start is the key to any success. This will not only ensure that successful relationships are built in the short term but increase the likelihood of a meaningful partnership being created in the long term.”
Peter Harris, CEO of Digital Stack: “To drive a successful partnership, understand what drives each other, and then deliver on it. A startup-corporate collaboration delivers unique perspectives and benefits. Corporates can expect agile, responsive startups that over-service them. We’ve had BMW Motorrad actually tell us they want partners where they are the biggest client as their experience with larger names left them feeling undervalued and unlikely to achieve great outcomes. While startups strongly value the access to networks and relationships, as well as working with dependable partners/clients.”
Tim Walmsley, CEO of BenchOn: “The key to collaborative success is: Expectation Management. This applies to all levels of interaction both external between each organisation and internal. The reason for this is that the business operations of enterprises could not be more different to how startups need to operate and both will expect different outcomes for the activities discussed. For example, corporates due to their sheer size have multiple layers of bureaucracy and siloed business departments. That means that any stakeholder buy-in required within the corporate will take time. A lot of time. Startups should be aware of this lead time because many startups have failed while waiting on decisions from corporates.
“At the beginning of any startup/corporate business relationship, both parties must take the time to explain how their organisation operates, who their key stakeholders are, what specific processes will be involved and what are their expected outcomes. Then both parties need to find out where expectations do not align and compromise on the agreed terms. This will align all parties and prevent frustrating interactions as the collaboration moves forward.”
Danielle Own Whitford, Founder of Pioneera: Startups and corporates aren’t as different as they think they are. Until I founded Pioneera, my entire career had been in large corporates. If you want to collaborate with corporates, I think there are three key things to focus on:
- THEIR problem and THEIR organisation. Your business needs to solve a true problem. Ask questions, understand how they describe things, so you can use that language and help them feel comfortable with you.
- Be patient!! Where corporates and startups differ is the speed to decision making. There are layers of decision makers in corporates, so start early, be prepared to have lots of discussions with lots of people that don’t know your or your startup. Ask for introductions and remember to keep people updated, so they can advocate for you.
- The best partnerships are when you’re both getting benefit. Understand and be transparent about how you can add value to your partner, as they do for you. This might be expertise, profile, technology or even contacts in a different industry. Be generous.
Emma Perera, Co-founder and Director of WellBeing GROW: “WellBeing GROW is a great example of startup-corporate collaboration as we began as a simple brand extension of the media brand GROW published by Universal Media Co. This gave us the benefits of mentorship, commercialisation, legal and financial services, marketing, creative services, digital support and other services to create a faster path to growth. One of the keys to fully realising the benefits of such a relationship is to maintain your independence so you can still move fast when needed and make autonomous decisions to change strategy or direction if needed, as startups often need to do, while corporates do not by nature. It is also key to work with a corporate that shares your startup’s passion and purpose.”
About “Let’s Talk…”
This exciting new, weekly initiative provides entrepreneurs and industry experts with a forum to share rapid-fire views on a range of issues that matter to start-ups and SMEs. Every Wednesday, we pose a themed question to a line-up of knowledgable industry figures, with a view to picking their brains for valuable insights to share with you, our readers.