As exciting as it is to start a business, it can also be quite stressful addressing the problems that unfold with starting a new business.
These problems could range from lack of funds to no strong leadership skills to lead the business to greater heights.
One major problem that is faced by the well-established corporation and startups is the need to form a very constructive engagement which would yield benefits for both parties.
The problem starts from the moment corporation seek out startups which they can form engagements with and continues all the way to the process in which an engagement is founded on.
Subsequently, the engagement crashes and both parties leave with a sour taste in their mouths.
But were there signs before that you missed?
For starters, the rate at which startups and corporations fail to form an engagement with each other is quite alarming.
Isn't everyone excited?
Many reasons abound as to why this is the case frequently, but the majority of the blame goes to the slower moving organization of the two -- and rarely is that the startup.
However, startups get a large share of the blame in other areas. Some of the following reasons which could lead to failure of an engagement process between the two parties. Some of this reasons include;
1. Vague assumptions by startups
Most startups today are into technological advancement and how it can be used to promote their business.
Sometimes, they may even claim to have this technology which could spur the corporation into action only to discover that this was simply an assumption and perhaps the only thing they have is a concept on how this can be made possible.
This is one major reason why most corporations pull the plug on the engagement arrangement.
In enable to fix this problem or issue, it would be advisable for corporations to assess the level of technology a startup claims to have before forming an engagement with them.
This will boost the chances of such an engagement lasting and could prove to be long lasting.
2. Not identifying goals and objectives
Most corporations get carried away with the endless possibilities that may come with having a form of engagement with a startup.
The engagement promises to add a lot of things to a corporation and has the potential to grow substantially over a few years. This excitement could be the downfall of the engagement.
This is due to the fact that the excitement could lead to confusion on what type of innovation is necessary for the partnership. It can eventually lead to a ruined engagement which was caused by excitement.
Therefore, it is necessary that the corporation does not get ahead of themselves and become overwhelmed by that number of options or innovations which are opened to them.
When a corporation takes their time to come up with an innovation thesis or plan, it would ensure that the future of the engagement is mapped out and secure and will not be destroyed from lack of plans and objectives.
3. Working with an unsuitable startup
When corporations get into an engagement without knowing if the startup has a set of values which will add value to their business in the long run, this could spell doom for the engagement before it ever really kicks off.
Therefore, it is important to pick the startups which directly affects the core of your business -- but how do corporations source, find and select the right startups from day 1?
This can be done by finding what aspect of business the startups focused on.
- What are their values and their limitations?
- What are their goals?
- How do they measure success?
- What stage at they in?
- How much money do they have in the bank?
- What can they provide the corporation?
- (and about 500 more questions)
All of these questions must be answered in order to give corporations a clear view of what they are going for before jumping into an engagement with a startup.
Utilizing a great diligence process such as Gearbox will ensure that the engagement or partnership does not fizzle out like most partnership these days.
4. No defined type of engagement
Expectations can run high when an engagement is in its infancy.
For this reason, it is advisable then that the type of partnership be decided upon as early as possible to avoid unbalanced expectations between the two partners.
When this is not handled properly, it can lead to one partnership that the partnership would bring a certain set of changes which may never have crossed the minds of the other partner.
This is why it is important for both partners to reach an agreement on what expectation they would have for their partnership and try to align their expectations to be one and the same.
Find a problem that needs to be fixed.
A challenge that can be resolved.
An innovation gap that can be filled.
By doing this, both parties are ensuring that the partnership does not die before anything can be established because of differences in expectation levels.
5. No clear paths of communication
Communication in every relationship whether on the family or in the business world is key. It helps you to make informed decisions knowing that you have communicated with all who is to be affected and they are in support.
When corporations do not effectively communicate through a sure source of communication to the startups, this is bound to cause a lot of problems.
Sometimes, corporations and startups could have muddy channels of communication due to cultural differences which may see one partner speaking a completely different language when compared to the language of his partner.
This is one of the pitfalls of partnerships between corporations and startups.
If there are language limitation, it might be best to get an interpreter in order to get the information that is been passed down by your partner to you.
By taking these steps, communication would no longer be a problem for you.
Making an engagement work is far from easy.
It takes a lot of dedication and hard work to make it work for both partners.
However, making it work is not impossible.
Therefore, both the corporations and startups should try to analyze the following reasons why a failure happens and how they can remedy the situation in expectation of future engagement with potential startups.
Taking time to make sure you are ready for an engagement is bound to make it much more successful than you would ever imagine.
Look for the signs in the beginning that let you know there is a misalignment -- and often there are plenty of them.
About the Author: Simon Hitchens is a startup enthusiast, columnist, researcher and educator living in Chicago, IL. He dreams of someday living somewhere warm and writing a novel -- in ink.
About Gearbox: Gearbox Enterprise Academy provides the leading corporate-startup engagement solutions designed to help innovation leaders, corporate development professionals, and strategic partnership executives master the art and science identifying and aligning with what's next. Through a unique combination of a membership community, AI-driven software, and cutting-edge expertise, Gearbox is focused helping corporations keep pace in an ever-changing digital world and providing startups with new avenues for growth. The result for modern innovators is unprecedented agility, risk management, and superior results. Headquartered in St. Louis, MO with offices in Denver, Chicago, and Los Angeles, Gearbox serves as a pivotal partner to large corporations and a champion to innovative startups.
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