INNOVATION
Corporate-Startup
Collaboration: A win For
Innovation
By Senorine Wasike
S
tartups are driving disruptive
innovation across major industries.
In a recent survey of 250 executives
by BPI, a network of executives from
various industries, 40% of execs stated
that they felt their industry was being
disrupted by startups. With this becoming
a norm, collaboration between startups
and corporates remains key in fostering
innovation.
Whereas there are pitfalls such as
difference in culture, appetite for risk,
hierarchy and work ethic, alignment with
the right partners can go a long way in
benefiting either party. Startups can add
value to existing players (corporates)
without necessarily disrupting them.
Strengths and weaknesses of these two
entities can complement each other
making it easier for collaboration. Startups
are able to create new products or services
under conditions of extreme uncertainty
something that most corporates lack.
This is mostly because startups focus on
learning whereas corporates focus on
earning.
When startups ask, “is this the right thing
to build?” corporates will be asking, “are
we building this thing right?” This makes
corporates less tolerant of failure. In fact
even the slightest appearance of failure
has a heavy cost for those involved in the
innovation unlike startups where failure is
openly acknowledged and embraced when
it happens.
Corporates go for big bets, which means
that all innovation efforts are put behind
ideas that are scalable. All business cases
must therefore show the commercial
value to the business. Remember the Jerry
Maguire movie? You have got to show
them the money.
Whereas both may be aware of market shifts
caused by new ideas or technologies, startups
have the agility to move faster. Internal innova-
tion teams may be hampered by the need for the
business to protect the core cash cows. With
collaboration the corporates can leverage on
the agility of startups in order to innovate at a
faster rate.
Startups on the other hand adopt
temporary business models whose key
objective is to search for scalable business
models that can be tried and tested before
adoption. In these two scenarios both
entities can leverage on their strengths
and weaknesses through collaboration.
Startups are external innovators who
enjoy the freedom of developing
disruptive solutions. Corporates have
their own internal innovation teams or
intrapreneurs in charge of implementing
their innovation strategies.
Whereas both may be aware of
market shifts caused by new ideas or
technologies, startups have the agility to
move faster. Internal innovation teams
may be hampered by the need for the
business to protect the core cash cows.
With collaboration the corporates can
leverage on the agility of startups in order
to innovate at a faster rate.
Another area of collaboration can
be through understanding the target
consumer. One of the major strengths for
corporates is market knowledge. They have
the resources that enable them do research.
Through these researches, corporates are
able to gather insights about consumers’
likes and preferences. They not only
learn about the consumer but are able to
establish what the consumers need. The
end result is that the consumer gets what
they want.
Startups also have the strength of
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