For a successful cooperation between companies and entrepreneurs, existing risks must be taken into account
8 min read
The opinions of the employees of You are personal.
By Dan Toma, co-author of The Corporate Startup, and José Enrique Alba Escamilla, Director of the Innovative ship Zone (PIEC) in collaboration with EGADE Business School.
In the first part of this series of articles entitled “Startups and Company: The Victorious Dumbbell, “we talked about the benefits and opportunities that arise from the collaboration between Startups and companies. In this second part we will talk about it Risks These are presented when synergies are created between the two types of organizations.
Cooperations between Startups and companies can come in many shapes and sizes: Incubation, acceleration, paid demos, joint ventures or free partnership. However, success stories are always based on an awareness of the other party’s interests, expectations, incentives, culture and work ethic. Therefore, in addition to the clear definition of roles, rights and responsibilities, cooperation must also be taken into account The risks available for both parties.
Risks for startups::
- Risk 1: Be recorded by a single customer. By focusing on a single custom solution for a large enterprise customer, the Start up They can neglect your vision and scalability and limit your long-term growth prospects. At the other end of the scale, some companies do not seek to work closely with the Start upbut a source of free advice and testing that draws on many of the resources of the Start up.
- Risk 2: Track and Scale prematurely. After a successful proof of concept or the signing of the first agreement with an innovation department or a customer, the solution should not be expanded immediately. On the other hand, since working with one Start up It can be interesting for several departments in the company that meet different requirements. There may be delays that affect the company’s financial resources. Start up.
- Risk 3: Lose Your Agile Mind. Should the collaboration accelerate and the dependency on company decisions increase, there is a high risk that the Start up Lose your agile mind.
Risks for Companies::
- Risk 1: reputational damage. If something goes wrong in a partnership, the reputational damage has far greater consequences for the company than for the company. Start up.
- Risk 2: Loss of investment. Over 80% of Startups They fail, so the investment risk for companies is high compared to their usual incremental improvement or closed innovation projects.
- Risk 3: Protection of Status quo. Corporate employees are used to going the traditional route and tend to view failure as a career threat. In a partnership with a Start upYou may feel threatened and protected by an unknown culture he Status quo Company without being fully committed to the goals of the association.
When companies get involved Startups Tech companies that propose solutions that the company cannot yet implement, the so-called Runtime misalignment. Therefore, it is best to agree on technological parameters similar to NASA’s before joining.
The associations between Startups and businesses can be complex, including latent challenges and risks, but as we noted in the previous article, there are also benefits that make them desirable. To the Risk reduction and laying the foundation for a successful partnership, We encourage both parties to review and answer the points in the list below:
For the start-up or the entrepreneur
- Goal of the association::
- What is the goal of the association for Start up?
- What is the corporate partner’s goal?
- Can the two goals be achieved at the same time?
- In its current state (e.g. paid demonstration), will the partnership result in both parties achieving their goals?
- Measure the success of the collaboration::
- How are you going to measure? Start up the success of the cooperation?
- How will the corporate partner carry out this measurement?
- Are the two measures contradicting or complementary?
- You like Start upDo you have enough headroom to achieve the goals of the collaboration?
- Is the budget allocated by the company (time, resources, other materials) sufficient to achieve the association’s goal?
4. People with whom you will be in contact::
- Who are you talking to in the company?
- Is this the only person you have contact with?
- Is the person the right one to achieve the goals of the association? (Make sure you speak to at least two people. If you are in contact with only one person in the company and that person leaves the company, the collaboration is at risk. At best, collaboration can happen, but they spend countless hours doing it Spending time figuring out who the new person is in charge of the deal. This can affect timing, goals, and resources. This risk is greatest at the beginning of the collaboration, before the deal is signed.)
- Do the people you are in contact with have enough leverage to protect collaboration in the event that corporate priorities are reorganized?
For the company or the company
1. Objective of the cooperation:
- What are the goals of the collaboration?
- Do these goals match the (innovation) strategy of our company?
- Is the goal of Start up because the cooperation competes with our goal?
two. Internal reasons for cooperation:
A. Does it make sense for us to work with a? Start up to achieve our goals or can we achieve the same results with internal resources?
3. Clarity on the best way to work together:
A. How should we work together to achieve our goal (e.g. paid demo, joint venture, free demo, etc.)?
B. Will this form of collaboration also help? Start up to achieve your goal?
Four. Resource Allocation:
- What resources are required for a successful collaboration?
- Can we allocate the necessary resources for the collaboration to be successful?
- Do we have the necessary resources available?
5. Measure the success of the collaboration:
- How will the company measure the success of the collaboration?
- How is the Start up?
- Are the two measurements contradicting or complementary?
6th Internal stakeholders of the company:
- Who are the stakeholders who are responsible for promoting collaboration in our company?
- Are these the right people for a successful collaboration?
- Can these people and their managers invest the necessary time and facilitate internal processes?
The most important thing about this checklist is to understand from our position as a company or Start up, the possibilities, capacities and risks of this cooperation. Both parties want to create value and achieve the greatest positive impact. With these considerations in mind, they can minimize risk, focus their efforts on the same goal, and / or work together to develop one.
The authors’ note to our dear readers: The next part of this series of articles covers the tools for collaboration between companies and startups.