Cooperation with startups has become a trend in Poland and not only. This trend started 3–4 years ago and it has led to the fact that almost every large organization has declared cooperation with young technology companies — for various reasons. From the real desire to change the organization, to the simplest (and saddest) purely image-related goal. When you observe the work of startups and corporations on a daily basis and compare it with the messages that appear in the media and during industry events, we decided to check how it really is. Do new, agile working methods introduced in large organizations help? What are the factors that have the greatest influence on the success of such a relationship? Which are the most important ones? How do human relations affect success? Who in the corporation (directly or indirectly) deals with the implementation of innovative projects and what is the role of the management board in this? To what extent are corporations operating in Poland ready locally to undertake (often risky) cooperation with startups? What if it fails? Following this lead, we asked representatives of selected companies dealing with innovations about their opinion and methods of operation. The result of these discussions is the report published in 2019, a part of which is this article. The report in Polish can be found at hugething.vc
The relationships between startups and corporations are different. However, we have identified several key factors that in our opinion significantly influence the effectiveness of the business relationship between these entities. First two of them we described in a brief form below.
The Purpose of cooperation
If an organization wants to look for startups in order to have a real benefit from such a cooperation, one of the most important issues to consider before beginning to do so is to define the purpose. The simplest distinction is whether you are looking for solutions that can complement the company’s offer or those that can improve processes. Our survey (qualitative research carried out in 2019 for the needs of the Corporations and Startups 2019 Report) shows that approximately 28% of the innovations implemented in large organizations are external one meaning ones related to the services and projects offered. 71% are innovations aimed at changing processes within the organization.
The next step is to identify specific business areas in which you are looking for technologies — it can be the company’s portfolio’s elements that are to be offered in a different way or specific product areas that can be extended. If you are looking for innovations that improve processes, it is worth determining where exactly the problem is and what would be worth redefining. It’s important to include here the heads of key departments responsible for the internal operation of the company, such as: administration, HR or the legal department. The more precisely the purpose is defined, the greater is the chance to achieve it.
One of the methods supporting the optimization needs’ recognition is the mapping innovation method developed by Greg Satell. The methodology is based on the innovation framework — a tool that allows to identify areas requiring the innovation implementation and select the best approach to their introduction. The method also helps to choose the best source of innovation. Conducting workshops with representatives of the main areas of the company’s operations, makes it possible to thoroughly understand the processes that should/can be optimized. As a result, the board of areas to be innovated is being created , along with step by step process information on how to make it done. It can also be filled with technological trends in specific areas.
Maturity of the solution
It is also important to know how to cooperate with mature startups. Are you ready to be the first organization to test the solution? Do you want to show positive results of a cooperation in a quick and certain way? For most of the large organizations, the key point of cooperation is the solution’s implementation . The development stage of startups is very important here. If you want to carry out the tests, the startup should be at least in the MVP phase, i.e. have a product in the simplest form that allows testing it in the organization. It all depends on what exactly the organization is looking for.
Unfortunately, due to the internal processes of the corporation — their length and complexity, teams searching for innovations are looking for solutions at the high level of development. There are teams that, due to the circumstances of the organizations they represent, exclude the possibility of cooperation with startups that are not “ready to go”. They are also more often looking for solutions that have already been implemented before. Therefore, it often happens that a startup has the product being ready, but cannot find the company willing to be the first one to try it and pay for it (this is the first obstacle). For startups operating in some countries, including Poland, this may be a challenge. We also know situations when a startup was unable to acquire its first corporate customer in the home country, but managed to establish a business cooperation with the same company abroad.
More about the key factors affecting the cooperation between corporations and startups you can find in the second part of this article.