As the rate of technological change exponentially accelerates, corporations have had little choice but to build long-lasting and successful collaborations with startups.

As the rate of technological change exponentially accelerates, corporations have had little choice but to build long-lasting and successful collaborations with startups. Due to their tech-savviness, startups have been a natural partner for corporations in this age of technology.

As we’ve previously discussed on this blog, startups bring many benefits to corporations. However, due to their inherent differences, startups pose a set of particular challenges to corporations

Not only does organization structure pose a challenge, but so does differences in culture. When starting a collaboration with a startup, corporations must keep these two points in mind. 

We believe there are five key aspects of the corporate-startup partnership that both corporations and startups should pay close attention to.

Effective and Frequent Communication: Setting Yourself Up for Lasting Success

A good predictor of a long-lasting and successful partnership is how strong communication is between partners. Undoubtedly, there will come a time when the partnership faces challenges, and having effective communication will ensure partners will be able to work through the challenges effectively.

It’s imperative the partnership takes the time to build an effective communication channel because communication is the backbone of your collaboration. 

This shouldn’t be left to chance, establish and agree on a specific procedure for communication (e.i. weekly meetings). 

Effective and frequent communication will also facilitate other aspects of a long-lasting and successful collaboration.

Be Transparent: Build Trust Between Partners With Transparency

One sure way to break-up a partnership is by losing trust. Many startups see corporations with a cautious eye. According to KPMG, startups fear: losing their culture, technology, and autonomy. All these fears are well-founded. 

Time after time, we’ve seen corporations eat the little guy up. To ease a startup’s fear, large firms should establish a policy of full transparency from the beginning.  

This policy of transparency will affect all aspects of the partnership: intentions, goals, timelines, contracts, and working procedures. 

Both corporations and startups should be transparent on their strengths and weaknesses to build long-lasting trust.

Only when there is complete trust, will the collaboration reach full working potential.

Share Information: The Good, the Bad, and the Ugly

Hand-in-hand with transparency is the notion of having an effortless mechanism for the exchange of information. For the collaboration to reach value creation, partners should share both the good and the bad. 

By sharing information, the collaboration opens the opportunity to find the coveted innovation gap, and allows them to exploit this gap for meaningful innovation.

The exchange of information should not stop at the minimum required information. Sharing information regarding thoughts, experiences, and industry insights will greatly increase the innovation potential of the collaboration. 

The more you share, the more fruitful your collaboration will be. This will also strengthen your relationship with your partner.

Understanding Their Methods and Processes: Don’t Embark on Your Journey Blind

Frustration can arise when not understanding the methods and processes of your partner. Since corporations and startups behave very differently, this can lead to many complications. 

To avoid this, the corporation and startup should take time, at the beginning of their partnership, to learn about each other’s methods and processes. 

After, the collaborators should agree on and establish a common approach. This will ensure they work in the smartest way possible. 

Corporations should be careful to not impose too many of their own methods and processes on the startup. Remember, a key advantage of working with startups is learning how and why they do things

Don’t miss out on this learning opportunity.

Set Clear and Achievable Goals: Laying Out the Journey Ahead

A strong foundation needs to be set before the partnership can be fruitful. This should be done by setting clear and achievable goals. Corporations should be aware of the strained resources most startups operate with.

Many startups don’t have the capabilities to mount large and expensive projects. 

Keeping this in mind will result in establishing realistic goals. This also relates back to establishing full transparency. Both partners will need to be frank with what is possible and what is not.

The goals set should be mutually beneficial. Yes, the corporation will have set needs, but the startup should also be benefiting from this partnership (other than in monetary ways).

The Corporate-Startup Paradox: Don’t Be a Control Freak

One of many paradoxes in the business world is the desire of corporations to work with startups and incorporate their culture, while simultaneously encouraging (or sometimes forcing) startups to assimilate and fit better with the corporation. 

This paradox can lead to many problems with the corporate-startup partnership. It can strain your relationship, if you force or coerce a startup into working the way your corporation does.

As your partnership progresses don’t lose track of the benefit of learning from and adopting certain structural and cultural aspects of the innovative startup. 

Don’t be the controlling parent that most startups fear corporations are.