On the road to corporate startup collaboration

On the road to corporate startup collaboration

Collaboration between corporates and startups is mainly superficial. On the face of it, the worlds seem avidly engaged in sounding each other out. Yet closer observation reveals loads of window dressing, as collaboration is frequently sought in 'easy' territory only rather than as a way to crack major strategic problems.

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New Horizons 2015

New Horizons is the annual research project led by KPMG on the potential of collaboration between corporates and startups in the Netherlands.

In 2015, the study comprised an online survey of 137 startups that responded to questions on their successful and unsuccessful experiences regarding collaborations with large organisations. The purpose was to find the key success factors in building a fruitful startup-corporate collaboration.

We also conducted in-depth interviews with visionary players using the penta helix model to gain insights from different perspectives and viewpoints: corporates, startups, academia, investors and the state. The key findings are presented in this chapter.

Five recommendations for corporates

We found that almost 90 percent of corporates required startups to enable them to innovate. Here are five recommendations based on our experience from working intensively with large organisations and startups, a series of interviews and the startup survey:

  1. Make innovation part of the organisational DNA – changing the business, bringing new products to market and developing new business models require commitment from the organisation as a whole and must become part of the organisational culture to truly embrace innovation.
  2. Establish the connective tissue – a team (or individual) with a strong internal network, a deep understanding of the organisational challenges and the ability to apply startup solutions to problems that really ‘hurt’.
  3. Tell startups what you think – have open and clear discussions with startups and to give honest feedback, because startups are often initially greeted with enthusiasm, but may not receive the real feedback they need to validate their product and find the right market fit.
  4. Set up experiments and earmark a budget for pilots – Find the shortest route to a demo to experience the minimal viable product; only then can the potential solution be evaluated. Ideally, the large organisation and the startup should be able to find (and finance) a pilot quickly and judge the minimal viable product on its merits.
  5. Consider the documentation – Get the basics right (letter of intent, non-disclosure agreement and client-supplier terms for startups) to achieve a more efficient collaboration process.

Startups must play their part too

Startups must also do their bit. We have five recommendations based on
our research among startups and the interviews and experience.

  1. Get the basics right – Have your one-pager and company deck ready, know the sectors and people you would ideally like to contact, with your offering set out as simply as possible.
  2. Nice to have is not nearly enough – When engaging with a corporate, startups need to have a clear understanding of the problem they will be solving, which must be serious enough to embark on the project in the first place.
  3. Make sure there is a business rationale – When engaging with a corporate, startups need to have a clear understanding of the problem they will be solving. A considerable amount of change is required to use a product on a daily basis, so products that are merely ‘nice to have’ rarely succeed.
  4. Pull the plug if you have to – Enthusiasm may wane over time and startups may struggle to continue the partnership. This is when both parties must discuss and evaluate; either they propose changes and commit to a renewed effort for a limited period (with a clear set of KPIs) or it is time to part ways.
  5. A good collaboration agreement involves commitment on both sides.

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© 2016 KPMG Meijburg & Co., a Netherlands partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative. All rights reserved.

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