You’re a technology-based startup who has finally landed that industry partnership—now what? Collaboration between a startup and a large firm can be rewarding and frustrating at the same time. Quite simply and obviously, the organizational structures and cultures reside on opposite spectrums. This is not to say that there isn’t a way for the two firms to work together, it means that there should be a level of consideration and understanding when it comes to the actual partnership.
Startups are fast paced and are often driven by achieving goals in shorter time periods than at large firms – some of this has to do with basic structure and consideration for scalability, but nonetheless it can be disheartening for an eager entrepreneur to work with. Below are four considerations for a startup to keep in mind when collaborating with an industry partner.
1. Understand the Potential Outcomes
When most startups enter partnerships with a large firm they are hoping to become integrated into that company’s product line, but there are other outcomes to consider.
- Startup’s technology can be integrated into existing corporate product;
- Startup’s technology can become a new product;
- Startup’s technology can be applied in a different area;
- Startup’s technology can be bought and restricted from competing with existing product.
With the exception of the last potential outcome, the first three are fairly positive from the perspective of the entrepreneur, assuming that the entrepreneur wants their technology to be used and not guarded. However, it can be difficult if a startup perceives a potential outcome but the reality changes because most people are somewhat uncomfortable with change.
What is important here is to understand and prepare for each outcome and create awareness for yourself and your employees by communicating effectively with the corporate team. One way to do this is to have a discussion with corporate R&D and business development about the possible outcomes and opportunities. Change is easier when you are prepared.
2. Come with a Plan
We have talked a little bit about what corporate tech scouts are looking for when they are evaluating a new technology. It is well worth your time to put thought into realistic assessments. Prepare the readiness of your technology with a discerning eye; understanding the tasks and costs associated with each development stage as well as the resources required. By doing this you are demonstrating that you understand the development process and open yourself up to your partner’s best practices to enhance your development tasks.
To understand where you fit with your corporate counterpart, consider asking them where they see you in their product or development roadmap. This will help you understand how your timeline and the corporate development timeline will work together and if it is a good fit for both parties.
3. Prepare for Culture Shock
It’s not exactly fair to the startups, but typically, the startup has to be the most adaptable when it comes to working with the culture of the corporation. There are things that your corporate counterpart can do to help you navigate and understand how to work with them most effectively.
- Talk about the communication structure up front; for example, will your startup have a team you work with or a single point of contact who can help you with the internal bureaucracy?
- Ask for some time with their team to learn more about the corporate culture.
- You can also find suppliers or other startups that have worked with the larger firm and ask about what the interactions were like
4. Agree to Communication Expectation
This is imperative to the success of a partnership agreement and while we are on the topic, important in general.
- Establish communication frequency;
- Document all interactions, these will be useful if team changes are made and/or if a dispute occurs;
- Be proactive;
- Communicate changes, problems, potential changes, successes, etc to your partner
- Ask your partner to do the same for you, and by setting the precedent in communication it will be easier to ask for this
- Have regular partnership reviews to discuss any changes in teams, progress, milestones, etc.
The bottom line is that both partners should understand the other’s position and be open to a team environment that will aid in the success of the project, but if you arm yourself with information and manage your expectations, your relationship with the corporate partner is likely to be smooth and straightforward.