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Corporates And Startups — The Way To Win-Win

This might not end well.

Corporates and startups often have a love-hate relationship. Here are some ideas on how to make it work.

Why Work With Startups?

Let’s start with a caveat: there are more ideas outside any company than inside. And since industries are changing fast, established companies need to watch out for disruption.

Incumbents must look out for disruptors before it’s too late. A small company doubling revenue every year might be a tenth or your business one year, and triple your size 5 years later. For a traditional industry, five years is the blink of an eye.


With internet, sensors and “edge computing”, almost every industry is being reinvented.

Even the mining industry is using self-driving vehicles and scores of IoT devices (and this is not even new!). Rio Tinto’s trucks (made by Japan’s Komatsu) already drove millions of miles, and carried over a billion tons of ore.

What’s cooler than a self-driving truck? Many self-driving trucks. (Source: Rio Tinto)

Obviously there is no rogue cyclist or people crossing the road here so the technology is not as tricky. But still, you get the idea.

Some of these technologies will not all be used by incumbents but give birth to entirely new companies that will displace them.

In other words, be sure that if you’re in the horse carriage business, someone making cars will soon go into the transportation trade and will not sell you their cars. We already see this emerging with “service robot” companies, who do not sell nor rent out their robots to established players. They sell their service directly to end customers.

Corporations and startups are so complementary it would be a waste not to team up somehow.

How Can Corporations Work With Startups?

If you look for successful corporate incubators or accelerators, there doesn’t seem to be any (please let me know if I missed any?).

The problems are generally:

  • Lack of quality deal flow: Despite the brand notoriety, they fail at attracting the best deal flow.
  • Lack of know-how: Corporates know their industry, but rarely have the right people to work directly with startups.
  • Misalignment: Working directly with a corporate closes a lot of doors for startups, and means doom if the partnership doesn’t work out.
The problems corporates face when trying to attract startups or run an accelerator/incubator

Lost In Translation

Startups and corporations are so different that it is very difficult for them to engage directly. We found that having a “translator” in the middle helped tremendously.

Also, in the early years of HAX, we wanted to work with the top brands to provide more opportunities for our startups. After a few attempts with some of the best names, we came to realize it just didn’t work this way. To stand a chance, it had to come from them.

Inbound interest was only the first item on the list: few of our visitors had done prior research or due diligence on programs like ours, or had experience with startups.

We realized we needed to have a check-list to ensure the ongoing success of the cooperation. Here is our list today:

  • C-level decision: If the initiative is not supported at the highest level, it will be difficult to enlist the people who need to get involved.
  • In-house Champions: There has to be an in-house, ideally “bi-cultural” (corp/startup) person to lead the cooperation. A strong internal network is also critical for success.
  • Business Units Commitment: The cooperation should not stay within some “innovation department”, and rather have involvement from people managing P&L in business units.

The Learning Curve

Just like anything, there is a learning curve. You probably shouldn’t jump into acquisitions without any experience working with startups. The simplest way to start is to sponsor and assist startups, without direct expectation of returns — for the benefit of learning about them — and being exposed to innovation.

$$$ and Difficulty vary

Cooperations So Far

We keep expanding the number of partners as our investments are going into new fields. 2 years ago we barely had any health-related startups, it is 1/3 of our new investments now. Enterprise and Industry are not major verticals too.

With the approach mentioned above, we have cooperations established with several Fortune 500 companies around particular themes. To name a few themes: health (J&J), IoT (T-Mobile), automotive (Valeo), travel (Michelin) and more recently urban air mobility (Airbus).

Happening for real

Getting C-Level Support

For companies who haven’t been successful working with startups, it might be a difficult time. Sometimes big changes in the business landscape can prompt an awakening, but it’s often too little, too late. I like the saying “to change people… change people”, which means that people don’t change much, and the only way is often to find new people.

Surprisingly, we saw recently a number of French companies venture out, looking for cooperations. We’re not quite sure what happened there, but it is a good sign. U.S. companies seem to be focused only on Silicon Valley and are missing out on the groundswell of “the rest”.

A radical way to renew executives (apologies to my Korean friends for bad taste)

I hope this will provide some ideas on how corporations and startups can be friends. For some more, the presentation I gave on the topic recently is below.

Benjamin Joffe



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Benjamin Joffe

Benjamin Joffe


Partner @ SOSV — Deep Tech VC w/ $1B AUM | Digital Naturalist | Keynote Speaker | Angel Investor | Mediocre chess player, worse at Jiu-jitsu