A new report from the Unilever Foundry indicates that more corporations and startups will be working side by side by 2025. Already, private equity firm Salient Partners is teaming up with Quid, makers of an AI-driven textual analysis platform, to better understand market shifts, while biotech drug developer Moderna Therapeutics is working with pharma giants Merck and AstraZeneca to bring its RNA-based treatments to market faster. The clear benefit of combining entrepreneurial innovation with abundant corporate resources means that more and more startups will be considering such partnerships.
The opportunity here is so great that Aline Santos, Unilever's EVP for global marketing, described it as a "a strategic imperative" for corporations due to the degree of innovation that comes from the startup space. And collaborations can certainly benefit startups, too.
Is a partnership right for you?
Potential benefits for startups are obvious: greater market access, resources, credibility, and runway. However, the report reveals that 75 percent of startups consider difficulty navigating large organizations as an obstacle to partnership success, and 66 percent struggle with the bureaucracies of large corporations. For these and other reasons, it's important to assess whether a partnership with a corporation is right for your startup.
While scrappy startups might be eager to share resources, not every partnership promises benefits for both sides. I've worked with lots of partners over my entrepreneurial experience, and I know that they don't always work out.
One of the challenges is cultural mismatch. Startups tend to work in the "fail fast" mode, while corporations generally plan defensively and conservatively.
On the other hand, if you do them well, partnerships can be great accelerators for your startup. To find that balance, it's important to understand what factors point to success in these deals. Here are a few things to keep in mind.
1. Beware the corporate tourists.
Make sure your values and incentives are aligned with those of your prospective partner. This is critical, because mismatched values can harm your brand image. One way things can go wrong is through "innovation tourism," in which corporations superficially engage with the startup world, drumming up a little temporary enthusiasm but no real commitment.
Travis Sheridan, president of the Venture Café Global Institute, which has built six innovation communities around the world, describes the phenomenon as often little more than "allotting a reward for the best new idea" or "dedicating a small corner of the main corporate campus as an 'innovation lab' -- fully outfitted with at least one brightly colored wall and a whiteboard." Beware of such token efforts and look for corporations that are dedicated to going the distance with a startup partner--not tourists but rather dual citizens in the corporate and startup worlds.
2. Pioneer beyond point solutions.
Too often, companies are interested in solving a short-term pain point and may use startups as a means to a quick end, fixing their issue and then discarding the partnership. That leaves startups high and dry.
You'll instead want to partner with corporations that see collaboration as an enhancement of their capabilities--not just as a point solution. Unilever Foundry is actually one good example of this way of thinking. Launched by Unilever in 2014, the innovation platform solicits Shark Tank-style startup pitches in search of new programs to pilot. It's already produced a promising partnership between Hellman's, the mayonnaise maker, and Quiqup, an on-demand delivery startup.
3. Cash in on audience interest.
Of course, one of the best ways to make sure you have good alignment with your prospective partner is to work with a company whose customer base really needs your product. There's no better way of finding engaged customers--and a built-in audience that would be expensive to reach on your own.
Talkdesk, a call center software provider, leveraged this principle early in its growth when partnering with customer relationship platform Salesforce. It was a win-win for the pair, and Talkdesk's resulting rapid success ultimately prompted Salesforce Ventures to fund it.
Partnerships can turbo-boost your startup into the stratosphere, but finding the right one takes patience and strategy. With these tips to help steer your course, your startup can find a winning collaboration that benefits not just you and your corporate partner, but also your customers.