Startups and corporates are frequently compared to David and Goliath, the small against the big, two totally opposite enemies. Except that today fighting is no longer relevant. Make room for collaboration !
And this cooperation is becoming a hot topic. All the CAC40 groups have engaged with many startups. Who could blame them ? Since, according to a recent French study by Bain & Company, a collaboration with a big company can have a very positive impact for startups (93% of the cases). That is what open innovation is all about. But if Goliath comes out ahead, what are the benefits for startups ?
Multiple and high-level contacts
Gaining access to the right people is a time-consuming activity especially for a structure that has the word “rapidity” as a motto. Big businesses carefully open their address book. This way, startups have a direct and privileged contact with top managers and can grow their business quickly.
Fast access to new and global markets
As I was saying, the clock is always ticking for startups. They have limited time and resources to prove the robustness and viability of their business model. Startups have to manage their time as efficiently as possible. A real fast internationalization dictates the survival of a startup even though it lacks the necessary resources for such an approach. This way, big companies who already have settled abroad, have a better field experience and can be a great opportunity for startups.
Access to previously unrecoverable resources
This type of partnership can also allow start-ups to access certain resources that are usually inaccessible to small companies. Through these alliances, the start-up can access unique and considerable resources to grow their business such as business expertise, laboratories, patents, partnership. Large companies also can open up their database and offer a wide range of possibilities for logistics.
Poke the POC
Large companies can assist and gain access to startups’ prowess at creating proof of concepts via early-stage funding and later-stage M&A. The use of the POC allows startups to test their project and reduce their time to market. Thus, they can benefit from the expertise and historical know-how of large groups, who act as a true beta tester. For your startup, it is a good way to evaluate the potential of your project.
Credibility AND visibility
In the business world, reputations are paramount. If you surround yourself with people who have credibility, you gain credibility yourself. Introduce your company to a potential partner, investor, or bank, using the large company as an argument, it will create a deep positive effect on your credibility.
Last but not least, visibility must be the most important thing for startups. So many times we hear “what does visibility have to offer me ?”. Well, it has to offer a lot ! Gaining visibility is gaining credibility, then appointments and customers ! At UMI’s for instance, we offer startups the possibility to be referred to the platform via an innovation card. In that way you are visible to professionals and potential partners and all you have to do is to capitalize on the business opportunities.
Also, these big businesses can be seen as established marketing channels for gaining presence in new markets. Acting with the biggest brands will allow you to advertise to millions of users worldwide.
Such combinations allow startups to face uncertainty in a very unstable environment. Much more than a trend, this collaboration with large companies illustrates the emergence of a new management model. In other words, the problem of entrepreneurship is no longer reserved for startups only.
To be continued…