Over the past decade, we've seen a seismic shift in the way large businesses and start-ups work together. From viewing a start-up as a competitor or potential acquisition target to the emergence of corporate incubators and year-on- year growth in investments backed by corporate budgets, more and more industry-leading organisations are looking to partner with start-ups to advance their businesses.
In a recent study, we found that not only are corporations more eager to work with start-ups but that a quarter of those companies surveyed view start-up collaboration as “mission critical.” By partnering with a start-up, these businesses tap into new technologies and game-changing solutions, enhance their internal innovation strategy, and grow the entrepreneurial spirit within an organisation – all essential attributes of a truly 21st century business.
Sounds great, right? Well, it’s easier said than done. In fact, many large businesses struggle with working with start-ups. While 86% of large organisations view innovation as crucial to their future goals, most of their attempts to work with start-ups aren’t strategic, don’t have organisational support and tend to be underfunded. In fact, 25% of corporations aren’t even sure how much they’re spending.
Over MassChallenge's 10 years of experience connecting our global network of start-ups with corporate partners, we’ve seen first-hand the ups and downs of start-up/corporate collaboration. Collaborating with start-ups can be an extremely high-impact activity for large businesses, but these partnerships must have a solid foundation to flourish. We see the following as the cornerstones of any strong start-up/corporate relationship:
Internal readiness: The organisation is committed to becoming more innovative and are fostering other entrepreneurial initiatives. The organisation has clearly outlined what it can do to support the start-up’s business, has assigned an internal champion, and is ready to provide the start-up with access to technology, internal resources and shortcuts to internal processes. The organisation understands its pain points and motivators for working with a start-up and is committed to building a “win-win relationship” in which both parties’ benefit.
Risk tolerance: The organisation understands its risk tolerance and has built its start-up engagement or investment strategy with its risk tolerance in mind. Organisations can adjust for risk in their strategy that factors in volume (reviewing and working with more companies on smaller projects) and time (giving the start-up a runway to demonstrate return). The organisation also knows what stage of start-up best fits that strategy and has developed strong criteria for vetting start-ups. For example, in our experience, organisations that understand the benefits of working with early-stage start-ups (e.g. emerging solutions/technology, market knowledge, talent and early investment opportunities) outweigh the costs (e.g. the organisation’s time, money and people) and can make the most of these early relationships.
Strategic fit: The organisation knows how the start-up will fit into its business. The organisation and the start-up have a shared vision for the partnership, which is supported by clearly defined objectives and deliverables. For example, the organisation may want to engage in a more flexible, upstream partnership with a later-stage start-up, in which both sides take risks and share in rewards.
Internal innovation team: The organisation has a strong internal innovation team that deeply understands the risks, challenges, and opportunities of working with start-ups. The innovation team works to streamline processes that might slow down start-up impact, connects start-ups to the right stakeholders both internally and externally, and communicates progress. The organisation’s C-suite supports the innovation team and its decision-making and understands that the innovation strategy is an essential element of the business.
If an organisation is well-organised, deliberate and strategic about engaging with start-ups, a partnership with a start-up can add incredible value. In turn, the start-up can access the organisation’s industry expertise, resources and connections that enable the emerging business to reach scale.
To help the world’s top B2B technology start-ups accelerate their go-to-market strategies, Ingram Micro partnered with Mass Challenge on the Comet Competition, which has helped start-ups purpose-build for an indirect distribution channel, powering them to new revenue heights.
The Comet Competition was launched at Microsoft Inspire 2019, held in Las Vegas. The winners of the competition will be announced at Cloud Summit 2020, held in Miami. With the opportunity for companies to compete for over $5M in go-to market (GTM) funds and cash, while building a lasting business relationship with Ingram Micro Cloud, the Comet Challenge aims to accelerate the success of the most promising start-ups under the stars. The UK will be awarding one winner of the competition, who will also be invited to Miami to present to the global team, as well as three runner up prizes.
Join us to see the top finalists showcase their solutions and discover which start-up will be awarded the top financial prizes. Find out more about the Comet Competition here: https://www.ingrammicrocloud.com/lp/comet/