In this article, we’ll cover the most important stages in the corporate-startup journey from the viewpoint of a large corporation.

Down to their DNA, corporations and startups are very different. Corporations handle many moving parts, requiring rigid processes, and a meticulous and organized environment. Startups are small, agile, and are less interested in perfection, and more in getting products to market.

The million-dollar question in corporate-startup relationships is how to make them successful. 

In this article, we’ll cover the most important stages in the corporate-startup journey from the viewpoint of a large corporation. By understanding the journey and its stages, you’ll be better equipped to accompany a startup through a rich and fruitful partnership within your organization.

Identifying a Need

The journey starts with the corporation identifying a need and releasing a call for solutions.

Let’s take a look at an example. A multinational bank is looking to digitize its operations. As this is not the company’s core business, they don’t have the know-how or expertise to accomplish this goal. Thus, the bank will need an outside partner who can provide a viable solution.

First Contact

A motivated startup will find the bank’s brief on digitalization and establish contact. After introducing itself and its solution, the startup must convince decision-makers.

The only way to convince decision-makers is by fully understanding the needs of the corporation – in our example, the bank’s digitalization and banking security needs. This requires ample communication between both parties.

Showcasing the Solution

Startups will want to show their solution to decision-makers as soon as possible. When they do, the startup persuades the corporation by demoing the solution to the company and demonstrating their understanding of the corporation’s needs.

Assuming the solution meets the company’s requirements, they will move onto the next stage of the journey. Depending on the complexity of the collaboration, the solution might go through a proof of concept phase before moving forward.

Proof of Concept

At this stage of the journey, many customizations and tests take place to ensure seamless integration. The corporation should clearly explain what is guiding its process and decision-making. Not only to the startup but also to internal collaborators.

For instance, if the bank needs six months to prepare for a pilot test, the bank should explain why. For instance, it could be for IT or security reasons, both of which should be communicated to the startup.

Six months for a startup is a lifetime. As most young companies are, the startup is cash-strapped. Thus, they might feel frustrated with the delay. To avoid this, the bank needs to clearly explain the reasons for the timeline. The exchange of clear information and expectations between both parties is imperative.

After completing a successful test run, the solution can move onto implementation, but first, a contract needs to be signed.

Sign on The Dotted Line 

No business journey is complete without a legally binding contract. In this stage of the journey, the bank and the startup agree on terms and conditions for the partnership, sign NDAs, and complete other administrative tasks.

Meanwhile, other departments in the corporation will be interacting with the startup. There are many moving parts and the startup could feel overwhelmed. By taking the time to fully explain the process and to accompany the startup, the bank assures a smooth progression.

Most startups are not experienced with juggling different departments and legal contracts. Ideally, corporations should provide a simplified contract and a straightforward procedure.

As soon as all administrative matters are ironed out and agreed upon, implementation can take place.

Sounds Easy Right? 

Well, it’s not. In each stage of the journey, the relationship can take a wrong turn or even hit a dead-end. The key person of contact within the corporation must understand the journey the startup will take to help it navigate successfully.

Our bank and startup example was a simplified version of reality. Reality is not as rosy, there will be many additional touch-points and steps depending on the context of the collaboration.

A best-practice is to identify all the touch-points a startup can have with your organization and establish a process that is clear and easy to follow. Keeping in mind the differences in culture, priority, and speed.

It’s Worth The Trouble

A corporation could be thinking that working with a startup is more trouble than it’s worth. This can’t be further from the truth. Startups are an essential component in today’s innovation process, bringing speed, new methods and processes, and practices to all industries.

Don’t let your differences in organization and culture keep you from working together. You should aim to build long-lasting and successful collaborations with startups.