We live in a day and age when building something from nothing is increasingly possible and easier than ever. In fact, 400,000 new businesses are born each year in the U.S., according to data from the U.S. Census Bureau. But, while so many new businesses are being born, that same data shows that even more are dying -- 470,000 per year, to be exact.
The dynamic and increasingly competitive nature of today's global economy requires businesses young and old to enter into innovative partnerships. On their own, more established organizations need to fight to stay current, and existing startups have to fight just to survive. Together, however, large organizations and young startups can form valuable partnerships that propel business and innovation forward.
This meshing of two organizations in very different places in their business growth is the key to thriving and surviving in today's competitive business landscape.
Large organizations offer stability, distribution, and consistency, which aids startups in securing a stronger foothold within their market. While startups are a natural source of innovation -- innovation older companies need in order to remain competitive.
Here are three examples of partnerships between big name brands and companies just starting off and the benefits of each:
1. Walgreens and Pager
Walgreens, the largest drugstore chain in the U.S., was founded more than a century ago in 1901. To keep up with today's mobile trend, Walgreens and its Big Apple-based Duane Reade stores are stepping up their medical services with help from tech startup Pager.
Pager's high-tech mobile platform is designed to match up patients' ailments and locations with available doctors and nurses. What's more, Pager is also partnering with Evolution, an on-demand startup owned by EnVision, to expand its offerings to include 31,000 providers nationwide.
How they benefit: Using Pager's app and Evolution's network, Walgreen customers can easily be treated for common ailments (e.g. sore throats, sinus and ear infections, etc.), obtain doctor referrals, and even receive house calls from a Pager doctor.
2. IBM and Spare5
IBM recently announced three partnerships to develop applications that use its Watson technology to "ultimately transform the future of sports." Those partnerships include Spare5, 113 Industries, and Triax Technologies.
How they benefit: As a result of this recent partnership, Spare5 is building an app -- "Watson Golf Pro" -- that utilizes IBM's cognitive computing technology and natural language capabilities to provide advice to golfers. The idea behind the partnership is to combine IBM's Watson technology with Spare5's app-building knowledge to analyze golf swings and deliver advice anywhere, at any time.
3. Regions Financial and Fundation
Fintech startups are becoming something of a hot national topic. In light of such, Regions Financial Corporation, which was founded in 1971 and operates bank branches across 16 states, recently partnered with lending startup Fundation to better serve small businesses by providing online loans.
How they benefit: Through this partnership, small businesses will be able to expedite their loan applications for Regions' lending products or choose to apply for a Fundation loan. Joe DiNicolantonio, head of Regions Business Banking, explains in a release:
"Small businesses continue to drive growth throughout the economy, and in order to meet their ever-evolving needs and desire to utilize online and digital processes, the financial services industry must provide innovative solutions that offer flexibility, speed, and capital access in a responsible manner."
So, what do these partnerships mean for startups?
I recently chatted with Aaron Michel, co-founder and CEO at Bay Area HR tech startup PathSource, which recently partnered with a well-known brand in the education industry -- GED Testing Service -- to provide GED students with a free suite of career exploration tools. Here's what he has to say about partnerships between big brands and small companies and how they can be facilitated:
"These joint ventures present a unique opportunity for early-stage startups to get the most important thing they need -- distribution -- while doing what they do best: innovating," says Michel. "And it's that innovation which encourages large organizations to take a chance on lesser-known startups."
Michel suggests taking two routes when facilitating these relationships:
Organizational: Startups looking to partner with large organizations need to first understand the organization's goals and challenges and how to best appeal and contribute to its strategic objectives. You know why you need them, but why do they need you? What can you help them achieve?
In GED Testing Service's case, they were looking to help GED graduates connect their diploma with entry into the 21st century workforce. That's where my company, PathSource, came in.
By partnering with GED Testing Service, we were able to give GED students greater access to career exploration tools, enabling them to better explore, understand, and pursue the career pathways available to them after taking the test. This alignment and shared vision is what ultimately led to a successful partnership.
Individual: Facilitating a relationship on an organizational level is meaningless if you don't also form relationships on an individual level. In order for a partnership to take off, startups need to identify someone within the company that will champion the partnership internally. Often this is the leader of a business unit or a senior business development executive.
In the end, partnerships are what keep well-established organizations and young startups alive and kicking in today's competitive business landscape. The key is to find the right fit for both parties. Whatever route you take in facilitating these partnerships, the benefits are still the same: stronger relationships, fruitful ventures, and innovation for all. It's a win-win.
What are some other examples partnerships between big brands and young startups? Let me know in the comments.