The 5 Factors for A Successful Couple of Start-Up and Big Company
Developing a partnership between a start-up and a large company can be akin to integrating an ice skater into a hockey team: both are comfortable on the ice, but they do not have the same goals or same culture, which makes the operation complicated. In sport, these two disciplines share the same playing field, the rink, but do not intersect. In contrast, in the industry, many companies seek to collaborate with start-ups to innovate. Three success factors characterize a successful partnership.
Start-up competitions are multiplying; incubators and innovation laboratories are created inside large companies to accommodate these young shoots. The purpose of these initiatives is to increase the contact between employees of these major groups and entrepreneurs, and to create an environment conducive to the establishment of partnerships.
However, in case of failure, the consequences are not the same for both stakeholders. The big company will have lost time and money and will adapt its strategy, by exploring developments internally or simply by stopping the project. For the start-up, the efforts and resources deployed strongly influence its limited cash flow. If no income is finally generated, this commitment can lead to bankruptcy. It is therefore wise to quickly qualify the potential for collaboration.
The collaboration between big companies and start-ups should focus on the first five success factors:
1. This is not a call for tenders
You cannot innovate with a start-up by treating the process as product development. The reflex of big companies is to adopt a position of prime contractor and impose their conditions. By appropriating the solution before it is delivered, big business kills innovation. Big business is the cause of need. The start-up is the solution. This requires modesty.
2. Ambition kills innovation
Bridging the gap between big business and start-ups must be seen for what they are – pilot projects. The temptation is great to see big and far to make projections over a year or two. By doing so, big companies diverge the approach of its objective, and they are going too fast for the start-up. It can be scary and withdraw. Or persevere and fail to support the demand. As for the employees of big business, they may feel rushed.
3. Start-up wants a playground, not money
Start-up companies that engage in this process have one goal: to test their product in the field, with real users. Do not see the first collaboration between a large company and a start-up as a call for tenders. This will not serve either of the two partners.
4. The start-up is strange animal that must be tamed
Big company must frame the process upstream and downstream. It is necessary to prepare the big companies to welcome and collaborate with the start-ups, just as it is necessary to prepare the start-ups to work with a large company.
5. Let’s be clear
Before you even think of collaborating on a start-up to innovate, every business has to answer two essential questions.
- The first: what are you open to?
- The second: how far are you willing to go?
All companies say they want to innovate. Dig a little, you’ll find something else. Culture and structure must be able to welcome and process innovation. We must not presume anything. Each organization has a different capacity to absorb innovation. Better to define a clear and realistic framework with those who will be involved in the collaborative project. And communicate it to the start-ups so they know what to expect.