For a corporate – whether it is a small or mediums sized enterprise or a group – a cooperation with a start-up can have advantages for several business areas e.g. to develop a new product, integrate innovative technologies or re-think traditional processes. There are though several factors deciding whether a cooperation is useful for both sides.

Start-ups are innovation drivers

The great advantage of start-ups is without doubt their innovational power. To develop new solutions for the market and to rev up is their driving factor. In addition they work with brand-new technologies and evolve sustainable strategies to cope with future challenges. Start-ups are therefore not only idea-givers, but rather idea-drivers.

Developing new approaches, reacting to current challenges and to being on the tip of progress – are all aims, also corporates like tor reach. Start-ups though have here the advantage that they are not bound to a brand promise, costumer expectations or set processes. Besides, corporates are risk averse. Entering a new market could endanger at the same time the core business or damage the image. Especially failure is seen here as a no go.

 

“Start-ups are idea-givers and idea-drivers”

 

For start-ups on the other side to take a risk is necessary. Alone founding a new business is risky. Also developing market-ready products or services is time intensive and there is no guarantee for an expense covering revenue. Without a definite risk it is impossible to entry a market or be successful in it for a start-up. At the same time start-ups can due to their often smaller size react more flexible on changes and fully concentrate on one project only. Start-ups therefore can address innovations in much more targeted way.

Through a cooperation with a start-up corporates can therefore win a new ease and be again at the forefront of advancement. Before one start a cooperation, a corporate should first ask itself some of the following questions:

 

✔ Which new perspective do we get through the cooperation?

A collaboration can have the effect of an “outside disruption”. The start-up will offer the corporate an outside view on the corporate set-up and can thereby help to uncover and activate hidden potential. Here it is also important to ask oneself if one is really open to new perspectives in general or if there is a clear focus and with it a limitation.

 

✔ What are the aims of the cooperation?

Developing a new product or service, entering a new market, adapting to costumers needs or shifting risk – it does not matter which business areas or reasons the cooperation is focussing on. But what matters is that it should be made clear which aims the cooperation will have and also communicate them openly – internally and externally. Additionally, the formulation of the aims also decides if the cooperation is limited to one project only or on a long-term basis.

 

✔ Do we like to get back a more innovative perspective in general?

Through the cooperation there will be also an exchange between the two different companies and their culture. The more open mindset of the start-up culture can lead to a questioning the processes and structures. The question is therefore: are we open for internal critic or not?

Corporates as supporters

Not only corporates can benefit from a cooperation. Also start-ups can profit from the experience the corporate already gained in several business areas. The experience, entrepreneurial know-how and market knowledge of corporates can support start-ups in their own development and enhance their scale-up. Nevertheless, there are some aspects you should have in mind too:

 

✔ What kind of support we get through the co-operation?

Start-ups get often support in form of funding or access to other resources like office space, machines, laboratories, data or processes. The support can be thereby for one project only or be held more open to support innovation in general. Also the dependence on (other) venture capital can get reduced through the cooperation – by funding or revenues.

 

✔ Which resources we further get access to?

In line with the collaboration the start-ups get also often access to costumers and benefit from the experience and branch knowledge the corporate has to offer. The cooperation can be also a good reference for future projects. The actual accesses one get depends though on the kind of cooperation.

 

✔ Have there been already cooperations?

This is important to get an idea of the general set up of a cooperation with the corporate. E.g. what range of participation one might have? Is there a communication on one level or not? What are the legal settings of the cooperation?

 

✔ How will the cooperation influence us?

Through the experience of its cooperation partner the start-up can learn a lot of best practices in many areas and thereby plan better their own scale-up or internationalization. But a start-up should also ask itself the question, how it like to go on with its business after the cooperation ended.

 

Cultural fit as key factor

At the end there are also decisive factors like the branch, the culture and the personal set up which makes a cooperation useful. We from Talent Tree know that it is the “cultural fit” between the two companies which is actually the key factor for the decision to collaborate. Both sides are therefore asked to visualize their aims and values clearly and take them as a basis to find a suitable cooperation partner.

There are though several possibilities for a co-operation. In the next article you can read more on the “different kind of cooperations“. Stay tuned!