Although large, established enterprises and rising startups reside on opposite sides of the business spectrum, magic can happen when the two work together to merge innovation and resources. However, with many startups on shaky financial ground and big businesses often mired in red tape, collaboration can be a challenge.
We’ll explore the benefits of big and small players working together and share tips on overcoming collaboration challenges to form strategic partnerships.
Startups aren’t strangers to collaboration. They collaborate with business investors, customers, contractors and more to get operations running smoothly. Similarly, enterprises collaborate internally and externally to fuel business growth.
When rising startups and big companies combine resources, they can experience the best of both worlds in terms of innovation and clout, complementing each other’s strengths and weaknesses.
Here are some enterprise strengths and weaknesses:
The startup experience differs significantly:
When large and small players bring their complementary strengths to the table, they can fill in each other’s gaps to generate new ideas, create opportunities, and increase sales and revenue.
It’s not always smooth sailing when startups and enterprises decide to collaborate on ventures. Here are a few common challenges these partnerships face.
These barriers – some real, some based on misperceptions and fears – have kept too many potential partnerships at bay. To forge a successful collaboration, both sides must take the risk and dive into the relationship, trusting that the other party is working toward a mutually beneficial goal.
To safeguard their innovations, startups should avoid common intellectual property mistakes, including not setting up confidentiality protections and failing to run a trademark search.
As with any relationship, big companies and startups must spend quality time together – far beyond emails and phone calls – to establish trusting, genuine partnerships.
When on the lookout for collaborative relationships, startups and enterprises should consider attending industry events, such as conferences, hackathons, or competitions centered on a particular solution or market theme. Both sides can use these events to seek out companies that share their philosophies and passion for ideas, innovation and partnership.
Once you have formed a startup-enterprise partnership, strengthen the relationship with any of the following activities:
Let’s look at some real-world examples of startup and enterprise partnerships.
Cisco partnered with the Japanese Internet of Things (IoT) firm smart-FOA. Both parties recognized that the value of the partnership far outweighed the risks. smart-FOA, which stands for Flow Oriented Approach software, provides an information-sharing platform that can resolve problems and enable real-time decision-making. Because Japan is known for its ability to use data from manufacturing plants, FOA was a natural evolution.
From Cisco’s perspective, investing in smart-FOA would generate new value by bringing together goods, people, processes, and data. In doing this, it would significantly expand Japan’s IoT solutions across global markets. But to unearth this value, Cisco had to maintain open lines of clear communication, exhibit mutual respect and trust, and relish the quick and nimble pace of innovation that comes almost naturally to a startup.
During the COVID-19 pandemic, there was a mad rush to find a vaccine that would reduce how severe the virus was hitting the population. Pfizer collaborated with BioNTech to create a vaccine capable of fighting the highly contagious Delta variant.
This partnership actually started in 2018 when Pfizer wanted to access BioNTech’s research and development regarding mRNA vaccines designed to fight the flu. BioNTech had the technical knowledge, while Pfizer brought its experience in development and vaccine rollouts to make the partnership successful.
Toyota partnered with Aurora to delve into the self-driving car market. The two partnered with a third company, parts supplier Denso, to create a robotaxi. Their robotaxi hit the roads in 2021. This collaboration has led to a bigger partnership, with Toyota tapping Aurora to help automate Toyota’s fleet of consumer vehicles, starting with the Sierra minivan.
In this partnership, Toyota gets the innovation to add amazing new technology to its vehicles, while Aurora gets to tap into the largest vehicle manufacturer to grow its business.
Every relationship requires compromise, communication and a little faith. When combined in the business realm, these elements establish the trust needed to drive a mutually beneficial partnership, in which each side gains confidence by investing in the other. The result is faster innovation, greater market share, and ideally, the ability to magic together for many years to come.
Kimberlee Leonard contributed to the reporting and writing in this article.