How to Sell Collaborating With Startups to a Skeptic [Article]
and there are plenty of them
Despite the popularity of startup engagements, many conservative managers choose to maintain their classic way of governance.
They remain skeptical about the practicability of startups, especially in small and medium-sized companies.
While the large corporations seem faster to adjust to the changes and allow startup disruptions with long-term plans, some of the smaller businesses are not convinced yet.
These people assume that it is a passing thing and will not last the test of time.
The fact, however, is startups and corporates are destined together.
Here are some tips on how to sell collaborating with startups to a skeptic.
Corporates Cannot Innovate as Rapidly as Startups
Although both entities have the same skills when innovations are concerned, corporates cannot innovate radically as is the case with startups.
Startups give the opportunity to creative nerds to explore new ways to do the same things that corporates do.
The process is fast and simple enough for anyone to grasp.
Since corporations have liabilities and internal barriers that limit them, startups provide the freedom for agility in creativity.
Up to 40% of executives in companies admitted their industry was infiltrated with startups.
According to the study, the executives reported that the creative minds had an innovative advantage and made more risks.
The result is limited growth in conventional leadership.
Financing and innovating with startups is the way out to achieve better innovation and grow profits.
Startups can Leverage Assets and Resources of Corporates
Although startups are great at bringing new ideas, they do not have the capability compared to corporates.
For example, they do not have the manpower or the large-scale logistical and resource capabilities that corporates enjoy.
This means they are not able to fully achieve their proof of concept.
And one of the main reasons collaboration is a key part of the process.
Since they do not have the financial ability for capital, the startups rely on the teamwork with corporates to mutually share the benefits.
A recent example is General Motors, which funded the autonomous Cruise Automotive with $1 billion to help expand faster than it was doing. Prior to this, the startup was stranded due to capital limitations.
Since then, they've secured a $2.25 billion investment from Softbank and just recently another $2.75 billion from Honda.
Corporates Have Limited Visibility of Startups
Since corporates are huge and focusing on a wide variety of big issues, they hardly notice startups until they really hit the limelight.
Due to this, most corporates miss out on the up and coming datasets or consumer trends that could be useful to help them beat the competition in the evolving market.
Most corporates are not connected to ecosystems to easily learn their competition until it is too late.
By then, they will be unable to collaborate effectively with even the best startups, which have already grown too big to take down.
Unilever avoided the problem by creating ‘Unilever Foundry’ for a platform and ecosystem to allow it to collaborate and innovate with up and coming startups.
This idea gave Unilever firsthand information to keep an eye on the ecosystem while nurturing startups into propositions.
It was able to retain competitiveness while adding value to the core corporate business.
Corporates Need Entrepreneurs as Problem Solvers
The slow processes associated with corporates often leave them incapable of solving problems effectively.
This is another key reason for collaborating with startups because the entrepreneurs are armed with updated problem-solving skills that are not conventional but out-of-the box.
The most common collaboration between startups and corporates is via ‘hackathons’.
This is an effective problem-solving engagement occurring between corporates and creative minds to solve issues with the help of the public.
IBM gained a major boost when it ran the BlueMix Cloud Hackathon with the collaboration of entrepreneurial leaders.
With this; the company has promoted emerging technical and business solutions to develop fledging ideas into workable IBM products.
The Relevance for Skeptics? Change
Approaching the challenges today with the traditional linear and logic is no longer applicable.
In fact, it is becoming less and less relevant.
We have already experienced rapid innovation surges that bring exceptional levels in useful innovations.
The advancements are based on procedural thinking wanes as evidenced over last few decades. You will notice that the demand for creative thinking is growing exponentially.
We need more creative thinkers to solve the increasing challenges of modern technology, and corporations can't be everywhere innovation takes place at the same time.
The playful, creative, forward-thinking approach in business and technology has proven more reliable and useful. It answers the queries we face by making solutions exciting and achievable by the widest majority.
Throughout history, there has not been anytime when creative thinkers were allowed to lead the way to development.
This is the time for right-brainers and ‘out-of-the box’ thinkers.
They are set to make the most out of world solutions.
So how do you sell working with startups to a skeptic?
Tell them that ideas are happening outside the walls of the corporate castle.
Tell them these ideas are cheap, but only for now.
Tell them that once they're not cheap anymore, they're a threat.
Tell them that small threats in large quantities can kill companies as easily as large threats in small quantities.
Rinse and repeat.
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.AI provides the leading corporate-startup engagement solutions designed to help open 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 on 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, government organizations and a champion to innovative startups.
You may also enjoy:
The 10 Ways Corporations Can Engage With Startups
Corporate CEOs Have Failed to Engage With Startups
How Engaging With Startup Can Make You A Corporate Rockstar
Want content just like this sent to your inbox? Subscribe below. Opt-out anytime.
We just sent you an email. Please click the link in the email to confirm your subscription!