Nearly a decade ago, we saw a significant rise in the number of leading global corporations who sought to collaborate with emerging companies to drive innovation and growth. But a noisy startup ecosystem filled with thousands of companies makes it hard for corporations to know which emerging players to engage with (and vice versa).
Connections are everything, even in this digital age, so bridging the connectivity gap is critical.
The Benefits of Corporate-Startup Collaborations
The startup economy is worth over $3 trillion, and the idea of not pairing these existing solutions to the right problems leaves this massive market untapped. From this vantage point, it seems almost silly not to pursue these kinds of collaborations. But the benefits extend way beyond.
Corporates have continued to grow, and sustain leading positions, for as long as they have because of their ability to focus on their core business and circles of competency. Partnering with startups allows corporates the ability to look over the horizon, not only to understand where things are headed, but to be able to take action on key initiatives in the near term without being distracted from their core business.
For example, corporates can enter new markets or tap into new customer bases by partnering with startups who have already cracked the code within these realms. Beyond solving consumers’ problems of today, corporations can also find inspiration from the bold innovations startups are responsible for, and imagine the problems they should be focused on in three, five, and even ten years to capture the hearts and wallets of customers.
Then there’s the ability to accelerate innovation. By their very nature, startups are more innovative, nimble, and risk-loving than their corporate counterparts. When you’re a large, multinational organization and have to respond to and address stakeholder and shareholder demands, you might not have the ability to quickly pivot, whereas startups can because they’re smaller and have more streamlined decision-making processes. By collaborating with startups, corporates can tap into their innovation, bring new products and services to the market faster, and reduce their risks by allowing them to test new ideas and technologies without having to invest heavily in them upfront.
Talent also comes into play. Without innovating, many corporates are unable to attract top talent who may be more skilled in some of these newer areas like generative AI, quantum computing, and other emerging technologies. Partnering with startups allows corporates to tap into a broad talent pool.
On the other side of the equation, corporates have the experience, boundless resources, and the scale to make or break an emerging organization. For startups looking to solve existing problems, corporates can help them get to market faster and scale more quickly. Startups also
benefit from their corporate experience, both on a tactical and a talent-based level. Why recreate the wheel when you can tap into the knowledge base of a corporation who’s been in business 50 or more years? Why not partner with them and get up to speed more quickly?
And then, there are the exit opportunities. More practically speaking, startups that partner early on with corporates have the ability to build those relationships into a pathway for a fruitful exit.
What is the Connectivity Gap?
In today’s digital age, we have more opportunities than ever to connect with business leaders and founders from all around the world. So, why is there a connectivity gap in the startup ecosystem? From a corporate-startup collaboration standpoint, it boils down to a misunderstanding of how each operates. Corporates have a different way of operating. They also have different motivators. They’re driven by distinctive factors and opportunities that might seem out of reach or foreign to startups. Startups move at a rapid pace, while corporates tend to be more methodical and careful with how they proceed and exploit some of these opportunities.
The gap often extends to the corporations too. For startups, there’s not always a clear understanding of who to talk to or who the right contact person might be for pursuing collaborations with these large organizations. It’s not uncommon for startups to reach out to tens of different people within a corporation and never receive a response. Or, they might chat with a corporate for a number of months, but still remain unsure if they’re speaking with the right person. Startups need to understand how to navigate within these organizations and answer: Who is the right person to engage? Is now the right time? At Silicon Foundry, we help emerging companies find their way through the corporate maze and make the right connections. We connect business-critical problems to game-changing solutions.
Startups must also take into consideration the tradeoffs when engaging with corporations given the often-long sales cycles and lower appetite to make over-the-horizon bets. Startups operate with limited resources and a shortened window of opportunity. Even once a pilot is landed, a startup needs to account for possible delays, changes to the desired use case, and turnover in teams at the partner corporation. If the pilot is deemed successful, it’s possible startups may be caught off guard by the speed and size at which the corporation will want to scale, and will need to communicate realistic dependencies to achieve the desired outcomes. Again, connections come into play when looking for partners, vendors, and investors that will support the path to growth.
How to Make Connections in a Chaotic World
There is extreme power in having corporates participate in and actually influence many of the solutions being generated within the startup ecosystem. But it’s critical for corporates and startups to understand how to engage within this ecosystem. Of course, having boots on the ground makes a world of difference when we think about connections. Face-to-face
communication is invaluable. Nothing compares to being in the same room with another person and feeling a strong connection.
Stronger connections can be made when each side leads with empathy, which is prevalent within the innovation ecosystem. Within this space, people think long term versus transactionally. They go into conversations ready to listen because they care about what’s keeping the other person up at night. What problems or challenges need to be solved and why? How can we tackle these issues together?
Another approach to making connections is using an intermediary. Intermediaries can help build bridges between corporations, startups, investors, and industry advisors by connecting the dots and delivering highly-targeted introductions and customized engagement experiences. These opportunities offer bi-directional value to the players across various ecosystems by bringing together visionary people who are creating new technologies, platforms, or paradigms of thought that will fundamentally change the way we live, work, and play. Intermediaries can assist founders in identifying and building meaningful relationships with C-suite decision makers—at the right times and level—for impactful customer, partnership, investment, or exit opportunities. Finding a trusted resource can help a startup or corporate navigate these relationships and address the “gap” in connectivity.
Connectivity Leads to Fruitful Multinational Endeavors
Again, one of the key benefits of connectivity is the ability to enter into new markets. For example, a startup might approach a corporate because they want to enter into APAC and they don’t have the experience or understanding of the culture and how they need to modify their product so that it meets the needs of consumers in that region. Using a partnership and the partner’s distribution channels, can help a startup (or a corporate) engage in a new region.
With the expanse of exploring multinational endeavors, using an intermediary comes into valuable play. An example of the outcomes possible is when our team at Silicon Foundry acted as a facilitator for a leading food and beverage company operating in 20 countries in the Middle East and North Africa. The company sought to expand their international brand footprint, and tapping into the startup ecosystem became an integral component. We supported a board-level mandate to diversify the company’s portfolio by exploring new brands within the Coffee, Sandwich, and Indulgence segments. As part of our work, we identified, qualified, and bridged founder introductions in the last mile delivery space which resulted in a partnership between one of the company’s largest brands and an Israeli delivery management platform solution.
In the corporate space, individuals often fall victim to groupthink. Many corporates are in their own echo chambers. They need to seek an outside perspective, so they can better understand what’s happening across industries, regions, and different roles, like connecting a supply chain officer with a manager in marketing. Connectivity can prevent us from being trapped in these different echo chambers.