5 things corporates can offer startups
Key reasons to consider working collaboratively and ultimately toward mutual goals.
There’s a lot on the internet on what startups can offer corporates and why it is key to driving businesses forward. But what exactly can corporates offer startups? First and most important to note is that a collaboration between a startup and a corporate is mutually beneficial for both. The partnership helps corporates to enter and create new markets, while startups have the power to develop their products and to scale.
The ‘dinosaur’ term in reference to traditional corporates is well-known in startup circles. And although sometimes true, we need only to take a look at corporates that failed to adapt and innovate, such as BlackBerry. BlackBerry, having at one point over 80 million users, with everyone wanting to know your pin, ignored touch screen technology until it was too late and announced earlier this year the discontinuation of their Android smartphones as of August 2020.
However, the importance of innovation is not lost on most corporates. Corporates are a lot more aware of the need to drive forward-thinking ideas that most startups would like to believe. They have exceptional knowledge based off of an established backbone and this should not be ignored.
Collaboration between tech startups and large corporates is key to driving innovation. Not only can they build on their strategic goals together but they can both generate a significant amount of revenue. However, startups and corporates often struggle to see each other as building blocks. Corporates see startups as a threat, whereas startups tend to view corporates as ripe for disruption. The benefits of collaborating also frequently outweighed with the pitfalls. There are certainly risks when it comes to collaborating. There is a clash of working cultures, processes and also two very different digestive systems for risk.
So, why would startups want to partner with corporates? Here are 5 reasons to seriously consider.
1. Funding
The first and most obvious, the moola. Startups are renowned for being pioneers in the industry but do not have the established financial backing that corporates have. Corporates can invest a considerable amount of money, freeing startups from the task of seeking out external investments.
Corporates can also invest in the long-term, which, again, not only frees them of their financial burdens but allows them to focus on building sustainable growth in their business model.
2. The ability to grow
Corporates not only have the budget but they have the connections, the clients and the existing database to grow the product faster than a startup could even do on their own. ‘The key success factor for a start-up is most importantly money but also access to a distribution network,’ said Carsten Thoma, President, SAP Hybris.
Corporates have been in the game for a while and have excess to data that would be super valuable to startups. Data that would take ages for startups to build on their own. In long-standing tech, it takes years to develop products and even longer to roll them out so having the backing and resources of a reputable corporate can see significant long-term results on your business model.
3. The rep
Large corporations come with big reputations. They are recognised leaders in their industry and could give the startup the weight it needs to carry the product into the spotlight. Even if the collaboration is temporary, it allows for an exceptional case study for future sales and potential investors.
Having a big corporate back your idea and your startup could be the make or break for your next venture. ‘Successful tests of our software with renowned enterprises was the trigger for European VC’s to invest in our company,’ said Vishal Rai, Co-Founder & CEO of Acellere.
4. Stable, yet exciting, working environment
While startups can teach corporates to be more agile and flexible in their work ethic, there’s no denying that the stability of a corporate is enticing. It’s a win-win for startups. Not only can they still continue to work in the same innovative and collaborative startup environment but the financial risk within a large corporation is substantially mitigated.
The steady flow of revenue the corporate can provide can stabilise a startup, allowing for more freedom to develop, refine and optimise their product even further.
5. Market knowledge
Startups can also tap into the valuable knowledge of corporate players. These companies have been in the game for a while and can offer insightful and humbling knowledge for the startup entrepreneur. There is a lot of market knowledge that can be shared and a lot of mentoring that can be done.
In order for a truly effective and successful corporate and startup partnership, both partners need to develop a proper understanding of collaboration and change their mindsets in order to reap the benefits. There is no room for a ‘we know best’ mentality. Corporates can secure a future competitive edge while startups can disrupt with guidance and assistance from the corporate. ‘Starting and growing a business is as much about the innovation, drive and determination of the people who do it as it is about the product they sell.’ — Elon Musk.
At The Delta, we work with both corporates and entrepreneurs to develop and design ventures and products to help grow your business. Master the corporate and startup collaboration with idea validation, impactful design and product experiences. If you’re keen to kickstart your venture, get in touch.
