The future of corporate start-up
When we asked corporates if they expected a change in future start-up collaborations, 55 percent said they expected collaboration to increase. Corporates affirm that they want:
- better structures and increased professionalism in collaborations; and
- increased opportunities to measure the outcomes.
Corporates also put some pressure on themselves. They want to take the lead in:
- implementing a clearer strategy for Open Innovation; and
- improving the processes concerning start-up collaborations.
Their objectives for future collaboration are largely the same as today:
- access to entrepreneurial talent and energy;
- access to unique products and services; and
- the possibility to explore new technology and business models.
The future of collaboration - what do start-ups think?
Start-ups look for increased transparency and openness to build more trust. To obtain better collaboration, they pinpoint that corporates should:
- be more willing to take risks;
- collaborate with new partners/suppliers;
- make quicker decisions; and
- make sure they have better knowledge about the start-up’s motivation.
Corporates should share risk and revenue in win-win setups to enable a platform for mutual trust.
Better future collaboration requires homework for both parties
To spur further collaboration, both parties must overcome some obstacles. Start-ups express quite clearly that corporates must:
- be willing to pay for PoCs and MVPs;
- have an internal setup on how to collaborate and enable successful collaborations;
- prioritise clear communication towards start-ups;
- understand the cultural differences between start-ups and corporates.
Hierarchy and silos slow down the process
According to start-ups, hierarchy and silos in corporate enterprises slow down the processes.
There are also missing links, for example no internal ambassadors, between the innovation project and the rest of the organisation. These obstacles are apparent when you scale from a PoC or MVP to a sales/licence agreement. Finally, start-ups also experience that corporates are reluctant to fail when they experiment.
Corporates highlight budget constraints and lack of top management focus
30 percent of corporates mention budget constraints as an obstacle. This may explain the risk aversion and fear of failing that start-ups pinpointed.
Corporates also identify these hurdles:
- an absence of strategic focus from top management on start-up collaboration;
- the lack of a “growth mindset” internally;
- cumbersome public procurement processes;
- scarce resources in the form of time and capacity; and
- the existing organisation culture.
Corporates also say that they sometimes lack the competence to run start-up collaborations and generally have a low appetite to take risk, because corporate culture does not always tolerate failure.
Also mentioned is the fact that some start-ups have unrealistic expectations and lack trust in corporates, and that corporates find it hard to gain access and choose the right start-ups to collaborate with.
Corporates feel unprepared when they first try to collaborate with start-ups
Corporates that have no start-up collaboration experience consider themselves to be slow, large and old-fashioned, focusing too much on existing business.
They express that they are:
- not ready or mature enough to enter a start-up collaboration;
- do not know how start-ups can help them;
- do not have any tradition of Open Innovation.
Some say that until now they have focused on using internal resources for innovation.
What do corporates hope to achieve?
Corporates hope to achieve the following from collaborating with start-ups:
- be able to quickly adapt to changing needs and improve their own services through access to new technology;
- get inspiration from agile start-ups to help modernise and digitise their own company;
- achieve external influence that can drive the innovation of new products, markets and business models; and
- spur an innovative mindset in their own employees.