Updated: Jan 21, 2021
All too often we see corporates taking an almost-charitable mindset when it comes to partnering with startups. Corporates, the logic goes, are established and experienced powerhouses with more to offer startups than a group of hoodie-wielding misfits might ever offer in return.
This well-meaning mindset bleeds out from boardroom meetings into the types of partnership programmes corporates propose.
In my Unilever days, for example, we initially offered our startup partners mentorship from experienced marketers. It seemed logical: we were the world's second largest advertiser. But we quickly learned that the majority of startups were run by experienced professionals (the average age of a successful startup founder is 45). Our partners weren't in need of mentorship; they were in need of our business.
More interestingly, we learned that startups could typically teach us far more than we could ever hope to teach them.
What, we wondered, might happen if we ended our charitable mindset?
What startups can offer corporates
When corporates move away from charitable mindsets and start to think about what they can gain from startups, well, that’s when partnerships become far more exciting and prosperous – for both startups and corporates alike.
So, what can corporates gain from startups?
For corporates, innovating is tough. It’s expensive, it’s risky and it takes time. Startups, however, are already nurturing disruptive new ideas. In many ways, startups are self-contained innovation hubs free from restrictive corporate guidelines.
In a new era of growth, startups are becoming the answer to corporate innovation.
Going beyond innovation, there’s also a strong business case for partnering with startups. Unsurprisingly, when Co:cubed highlight potential relationships to our corporate clients, the conversation rarely veers far from financial return on investment. Payback from partnerships is typically weeks or months, rather than years. Startup technology generally delivers solutions to our corporate partners at half the cost of traditional ways of working and creates new growth opportunities, too.
The corporates benefiting from startup collaborations
As soon as forward-thinking innovation leaders remove their philanthropic coats, corporate-startup relationships morph. Instead of corporates handing out fatherly advice that startups nod along to then ignore, you get two true partners pedaling towards a unified goal.
Corporates get cost-effective and low-risk innovation. And startups get what they really want: a corporate customer that can help them scale.
Unilever, Diageo and Vodafone are among the corporates who have already switched to the new way of thinking – the latter securing partnerships with multiple startups following a series of workshops we ran with their top 250 leaders.
The Go-Ahead Group is another fine example. As part of a Co:cubed directed programme, the FTSE 250 public transport provider is currently sharing its business challenges with 10 startups, who are in turn customising their technologies and amending their product roadmaps with the intention of solving them. The relationship couldn't be more different than a traditional corporate accelerator yet, from both parties’ perspectives, it’s set to be more rewarding.
The power balance has shifted
While many corporates still view startups as underdeveloped and lacking in resource, research suggests startups are beginning to think otherwise. In a post-Uber, post-AirBnB world, startups know corporates aren’t necessarily essential to their success… and are already becoming selective about who they choose to work with. Startups naturally want to partner with companies where they can add the most value. Being vulnerable and open with your corporate challenges is the first step to fruitful collaboration.
By thinking about startup collaborations differently, corporates can unlock profitable opportunities and safeguard their businesses from disruption simultaneously. Which is precisely why corporates need to start thinking about what they can gain from startup collaborations, and not just what they can offer.
It’s time to put an end to startup charity.