According to a report published by McKinsey in 2020, 75 percent of startups surveyed consider collaboration with corporates very important. However, only 27 percent were satisfied with their relationships.
The report also revealed that many top executives in the DACH region consider partnerships to be important, but they too admit that cultivating a successful partnership can be a challenge.
In our previous article, we highlighted how corporates and startups can benefit from collaborating. On the other hand, partnerships are only meaningful when they are effective.
Today, we draw focus on the key factors essential to successful collaboration between corporates and startups.
1. Commitment and Mutual Trust from Both Sides
One of the biggest barriers to successful collaboration between corporates and startups is a lack of mutual trust and respect.
Startups often feel neglected or not taken seriously if, for instance, their main point of contact is a mid-level department head. Ideally, senior leaders from both organisations should be fully engaged and committed to the partnership.
Furthermore, corporates should be careful not to shackle startups with corporate processes, and startups should understand that corporates can’t move at the same speed due to a large number of resources and structures.
2. Embrace Investor Outlooks
Collaborations between corporates and startups can benefit from the same critical investor approach practised by private equity and venture capital firms.
What this does is aggressively align both parties towards achieving outlined objectives and milestones in addition to formalising responsibilities and decision rights, and providing better risk management.
Examples include establishing clear investment guidelines, signing contracts outlining key responsibilities and decisions rights as well as installing active governance and fast course correction capabilities.
3. Identify Opportunities to Enhance Core Business
Most startups are driven by a need to get a leg up over their competitors. Corporates can support their startup partner by offering a variety of benefits that purely financial investors can find difficult to match such as data, technology, facilities and more.
To attract startups, corporations should identify which of their internal capabilities is capable of providing startups with a competitive edge. In doing so, the startups can grow and corporates benefit from not having to hire or fund them as a service provider.
4. Build Shared Grounds and Shared Vision for the Collaboration
Any collaboration between corporates and startups should begin with a clear and articulated objective and rationale for the partnership.
A set of rules should be established on how both parties intend to deliver on expectations as well as the agreement for resource and expertise sharing. This helps ensure the long-term vision for both sides evolves in the right direction.
Ready to Collaborate?
Collaboration is built into the Scaler8 DNA; this has enabled us to help many corporates and startups in creating successful partnerships. We have a network of partners and mentors with extensive knowledge of international markets and experience scaling businesses.
Join Scaler8’s new cross-border initiative: Scaler8 Open Innovation.
This initiative will match startups to established German corporates who are looking for innovative solutions to their high-priority problem statements. Scaler8 will help participants collaborate effectively in a fast-tracked, low-risk and cost-effective manner.
Submit your interest now here.