As companies like Uber and Amazoncontinue to transform old industries, the term "disruption" is slowly becoming less of a buzzword, and more of the standard.
These days, giant corporations are embracing disruption. Rather than waiting for the next Whatsapp or AirBnB to fall through their fingers, they are making an active effort to build relationships with early stage companies--from investing in startups directly to welcoming them into company-owned accelerators.
The partnership makes a lot of sense for both parties; corporations have tremendous resources and distribution, but are prone to moving slowly. Start-ups are rapidly building and testing new products, but have a hard time gaining credibility and scale. Think David working with Goliath.
Why does this matter? If the partnership works, then fewer startups will fail while they wait to acquire customers, and fewer corporations will live in fear of becoming yesterday's news. You'll see fewer mass layoffs, more collaboration, and a quicker path to market for new companies. Intrigued? Here's what it actually takes to start bringing David and Goliath together:
Goliath Brings David Over to Meet the Family
Sprint started an accelerator program to bring its mobile technology to healthcare startups, and the first step was getting everyone in the room together. Kevin McGinnis is leading this initiative for Sprint, and recalls a monumental shift in the company's attitude once executives started engaging directly with the startups.
Kevin points out, "The entrepreneurs did not understand corporate processes or why they exist, which turned out to be a great asset. They absolutely energized our team at Sprint and inspired us to find new ways to speed up our operations so we could help them grow."
David Gets Over His Trust Issues
Although startups are often wary of sharing their product early on, rapidly growing mobile healthcare Wellframe decided to take an open approach to building partnerships and visited the Janssen Labs, Johnson & Johnson's research innovation center.
Wellframe co-founder Archit Bhise explains, "We stay focused on building the best possible product to improve patient care, that's why we continue to draw attention of industry influencers. When you're going after a complex sector, like healthcare, the faster you can work together with an already established company, and add mutual value, the sooner you can scale your impact."
Janssen's Global Head of Innovation, Diego Miralles, echoes the idea that "the playing field is leveling between big companies and young entrepreneurs. We are continuing to find ways to stay in the forefront, which includes aligning interests with startups early on."
Goliath and David Get a Quick Win
Music streaming platform Spotify serves as a great example of a disruptive company creating a mutually beneficial partnership with a big corporation, Universal Music Group. Universal came in as an early investor, offering their entire music catalogue not just capital.
Early alliances with labels and publishers meant that they could take the product to market and scale quickly. Imagine the implications when this mindset starts to permeate sectors like education or healthcare.
Goliath and David Host a Party
Once key decision makers are on board, trust is established, and there is proof that the partnership can work, the collaboration can turn into a long-lasting advantage.
Enterprise collaboration startup Hive won an "innovation challenge" that sent them to Cisco headquarters to meet with the heads of billion-dollar business units. Hive founder River Tamoor Baig was "surprised at how many of the executives were seasoned entrepreneurs. The expertise and guidance we received was an accelerator in itself."
From the other end of the partnership, "Cisco's leaders now view startup partnerships as a core part of our business. Next, the key will be to turn the relationships into a regular interaction of feedback and ideation that lead to bigger product partnerships," explained Tom Yoritaka, Managing Director of the Entrepreneur in Residence program.
Keeping the Door Open
This collaboration between a David and a Goliath will require a balance of short-term opportunism, and long-term commitment.
While a partnership between a startup and a Fortune 500 company may make sense on paper, in practice it requires incredibly dedicated people getting in the trenches and genuinely caring about creating value for both sides. I certainly hope to see people continuing to step up and lead us into a new era of collaboration.