Startup Business surely has the overflowing entrepreneurial passion and drive to create new services and products that disrupt markets, but usually lack the relevant resources and experience to turn their creative ideas into a reality.
Because of that, big companies are likely to be fundamental regarding with the growth plans of startup business, with the latest statistics report revealing 70% of startup business feel big corporates are vital to their success.
Behind Startup Businesses
The major reason behind why startup businesses want to collaborate in the corporate world is because corporations can be the primary consumer for the service or product they offer.
Through working together, they can be able to make sales opportunities in an immediate manner, which can greatly help in building credibility and funds or obtain feedback and insights to rework their approach when it comes to selling to big companies in the future.
Furthermore, even if a certain company has a solid innovation practice, still, there could be multiple individuals with varying remits, and they’re most likely to be inundated with approaches that are unsolicited.
Finding the right contact as well as getting that first step can only be achieved by finding dedicated networking events and accelerators that are specific to every industry, for startups and corporates to meet. It is at this point that startups can be able to build connections and foundations to help inspire one another.
However, prior to this instigating and networking conversations with the big companies, startups should carefully research each corporate they are primarily interested in before pursuing a business relationship with them.
Even if it means talking to current or former partners, it is very crucial to know firsthand what it’s like to work with the large companies. Asking related questions like “Has the company worked with startup businesses before? Were they successful? How did it go?” will help you set more realistic expectations in the long run.
Make Sure Your Intentions are Aligned
Even though there is no doubt that big companies in the corporate world are becoming increasingly inclined on the need for greater innovation, it is still essential for startup business to make sure that they are totally confident in how the corporate-startup relationship should work them too.
Therefore, it is important for both companies to share common values, aside from the fact that the objectives for their business should be complementary. It is because anything less can be a hindrance to a successful business partnership.
An expert stressed the importance of this by saying that it is hard for startup business to get used to giant corporates, most specifically with their ways of working and agendas. He added that any startup cooperation has to make sense even from the start with a clear use of focus.
Most large companies in the corporate world even say that they do not have any problem finding startup business. However, their challenge is how to find the relevant startups that can be able to support their business objectives as well as get the balance right.
In fact, with every corporate-startup relationship there are many challenges, they usually include expectations, vocabulary, or scaling issue, but having the most appropriate strategic fit with a large company in the corporate world can make it much easier to overcome all these obstacles.
Through aligning objectives and intentions, corporates and startups can learn too much from each other. The big ones can learn to be leaner and more agile, while the startup businesses can be able to learn more about running a profitable and stable business in the long run.
Factor in a Slower Pace
A highly experienced startup business will completely understand the importance of working with giant corporations but will also be able to appreciate the involved difficulty in making these certain business relationships work. In addition, even those more innovative corporations can be a bit slower, difficult to approach as well as hard to read.
This is typically because a large corporation experiences in the long steady process of approvals and decision making that can usually take months. This data is demonstrated with around half (48%) of those startup businesses that have collaborated with giant corporations spent over 6 months trying to have a deal closed with them.
Obviously, this hesitation and slow pace can really be frustrating for an entrepreneur that is otherwise fast moving. However, instead of walking away, startup businesses must think about the most ideal ways to handle this challenge by factor in the longer timing into improving their business plans to make sure that their expectations are stay aligned and deadlines are not missed.