Maneuvering corporate partnerships can be tricky. Especially in the early stages of your startup. And having to dedicate a large amount of your resources to corporate partnerships that turn out to be less beneficial than initially expected is a waste of time, resources and obviously money you probably won’t have at that stage.
Together with Maria Zesch, Chief Commercial Officer T-Mobile Austria, Christian Adelsberger, Founder and CEO of Parkbob, David Pichsenmeister, Co-Founder of Oratio and Oliver Csendes, CEO of Pioneers we discussed this hot topic. So consider these things before or when entering a partnership:
Know what you want and what you can expect from the partnership.
As a startup you need to know what you’re after. Be aware of what you want to get out of that partnership. Expectations are often too high as well. Just because a corporate offers a huge brand doesn’t mean that partnering up is automatically beneficial for your startup. So how can you know what to expect from your partnership? (Theoretically) It’s relatively simple…
Communicate with your partners!
Startups and corporates alike often make the mistake of not clarifying their goals and expectations at the beginning of a partnership. Both parties need to be clear about what they are bringing to the table and what they want to achieve by partnering up. You should also try to get a sense about the corporate’s intentions as early as possible. Ask them about what they would like to achieve by partnering up with you. And last but not least, always try to communicate and work with top management. Because top management support will make navigating completely different internal processes much easier.
Be the driving force of the partnership.
You are the agile startup. Don’t expect large corporates to change rapidly. A much bigger company is obviously going to have a harder time changing or speeding up internal processes than a startup. So those processes are definitely going to differ in speed. And there needs to be someone who coordinates said speed difference. This is where top management comes into play again: You need to communicate that you need the freedom to do your job and not be slowed down by large corporate processes.
And securing that is going to be much easier by communicating and working with top level management. As high as you can get! And as Christian, CEO of Parkbob put it: “You have to be constantly meeting people, push topics again and again so they happen. Waiting for things to happen is not going to work.”
Understand your partner.
When pitching to corporates, always remember that at the end of the day for them it’s going to be about either saving money or making money by cooperating with your startup. Understand the value creation and business model of the corporate you’re potentially partnering up with and understand how your solution can fit into that.
And like Oliver, CEO of Pioneers said, “Corporations are not there to help you. You’re there to earn money.” So always be clear about what you are selling and how it can help the corporate to reach its goals. Because that is what they’re looking for.
You should also be aware of the corporate’s innovation strategy and the market they want to tackle by working with you. If it’s something completely different from what you do and you decide to work with a large corporate in an early stage of your startup, chances are that the large influx of money – compared to that of other customers you’re going to have at that stage – may force you in a direction you didn’t want to go for in the first place.
Oliver’s Red flag: “If you ask them about their goals, like tweaking their business model, a better understanding of their internal ecosystem or a specific solution you might be able to hack for them and they say yes to everything, they probably don’t know what they are looking for and want to cooperate with startups because everybody else is doing it.”
Understand your partner’s culture.
How can you make sure that you can still achieve your goals if that one person who’s driving innovation leaves the company you’ve partnered up with? Culture. Try to get a sense for the internal culture of your (potential) corporate partner. And how does one go about getting said sense? Top level management! Because if top management doesn’t support a startup friendly culture, you’re going to have a hard time. A good trick to test the waters is asking for a meeting with the company’s CEO. If a CEO won’t give you 15 minutes of his or her time, chances are the internal corporate culture is not the best foundation for an early stage startup. Again: Full top management support is what you should be aiming for.
Share your knowledge. But don’t share it mindlessly.
David’s Red flag (Co-Founder of Oratio): “If a corporate approaches you and asks for free stuff right from the get go, be careful. If they’re asking for free workshops, product customizations or pilots, chances are they’re trying to use you as a cheap agency.”
But don’t forget to consider that corporates need to know and fully understand the product and its value in order to move forward. Try to keep both aspects in mind. And again, communication and knowledge of your own goals are key here: What can both parties do for each other? Generally though, charging money for additional services your startup delivers – even if it’s not a huge amount – usually guarantees that a greenlighting decision is going to be made from higher up the chain. Which – as we know now – is a good thing.
Get to know the people you are going to be working with
At the end of the day it’s always people you’re working with. And while business knowledge is obviously your bread and butter, you should also really take a look at the people who will drive, manage, coordinate and control the relationships between their corporate and your startup. If the people whom you are dealing with don’t have passion for what they are doing, you should look at other partnership opportunities.
So what should you take away from this month’s Stammtisch?
- Understand that there’s no free lunch. It’s a business relationship and both parties need to work on that. Be clear about what you’re investing and what you want. Communication! Preferably with top level management.
- Be the active party. You’re the agile, small startup. Constantly push topics and request meetings.
- Understand your potential corporate partner and the internal culture within said corporate. Try to understand things from their perspective.
- Share your knowledge but be aware of how or if that can benefit your startup.
- And get to know the people. Sometimes it’s more about gut feeling. Are the people you’re going to be working with passionate about the project? Is there chemistry between the people involved?
- And don’t forget that the best startups have lots of pitch-meetings. So don’t rush into things.
That being said, see you at the next Stammtisch!
© Markus Engelberger/graphicrecorder.at