Startups and companies: The victorious barbell

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Startups and companies: The victorious barbell
Startups and companies: The victorious barbell

By Dan Toma, co-author of The company startup, and José Enrique Alba Escamilla, Director of the Innovative ship Zone (PIEC) in collaboration with the EGADE Business School

More and more companies are opting for a partnership Startups to diversify your innovation efforts. Although it may seem contradictory, this union can be beneficial for both parties due to the difficulty of an established company innovate in a disruptive way from the industry and that a Beginning understand the industry that you want to disturb so much In addition, companies and Startups They share common goals such as growing their respective companies, improving their competitive position and generating income.

The cooperation between two companies of different sizes, cultures and strengths faces several obstacles. For example, it is not uncommon for CEOs of Startups In the end, they are dealing with subordinate employees rather than company managers, which makes it difficult to reconcile expectations. Complications often result from a clash of cultures, a different work ethic and a different appetite for risk.

Although corporate and Startups don’t share the same ServicesThey have enough incentives to work together and take advantage of their differences.

The advantages for Startups

The income They are often the main incentive, especially when that Beginning It is a young company. Large companies can invest significant amounts of money in a partnership. This capital injection frees new companies from the need to make external investments. Businesses can also have a long-term interest that can stabilize a Beginning and help her reach a break-even point or even short-term gains. This approach enables Startups achieve sustainable growth regardless of the available risk capital.

This capital injection frees new businesses from the need to make external investments / Image:

Another benefit for Startups it is IInternationalize without taking risks. Working with a multinational company offers a Beginning the possibility of expanding into other countries through partnerships with local subsidiaries. In addition, large companies can also be an ideal partner because they have enough Brand awareness, marketing and sales channels, probably used by a Beginning in their climbing efforts. In addition, the large user databases can help Startups to refine and optimize your products.

On the other hand, the connection with a company offers immaterial advantages such as access to Studies, cases and testimonials and a Knowledge deep in the industry. Successful collaboration improves the reputation of Startups and serves as a success story for future sales, as decision makers often do looking for references and companies with experience in the industry before signing a contract.

The advantages for companies

He The most common advantage is Innovation itself. To protect their strategic position, companies need to be aware of changes in the market caused by new technologies and innovations in their industry. The StartupsBy not being dependent on the company’s bureaucracy, they have greater freedom to develop truly disruptive solutions. Companies can benefit from these solutions, but also from expansion into emerging business areas. In this case, innovation is the antidote to market disruption as it ensures a future competitive advantage based on incremental innovations. For this reason, collaborations facilitate the necessary disruption of the business model itself, which is difficult to achieve from the inside.

Although the collaboration initiative of the BeginningCompanies shouldn’t ignore that new revenue the result of this kind of association.

Since they’re not so focused on a standardized process, Startups tend to Focus more on the customer. This helps to adapt and personalize solutions more easily, so that companies can better serve and get to know their customers and track them better Changes in market trends, buying behavior and technological innovations.

On the intangible advantages of a partnership with Startups One is generated more corporate culture in an organization that traditionally works bureaucratically.

The challenges of the association

Even if the benefits of working together are clear to both sides, they do exist Challenges that has to be overcome.

The main challenge for a Beginning refers to Sales cycle times. Business sales cycles conflict with the need to generate short-term business income Startups. With every possible agreement with a company, the Beginning There is a risk that you will run out of money if the deal fails. Shorter sales cycles mean a higher survival rate for those Beginning. In addition, these startups are often treated more informally and are not considered serious business because companies lead them to commitments that they otherwise would not have made on their own.

While the benefits of working together are clear to both sides, there are some challenges to be overcome / Image:

On the website Business challenges For collaboration, they deal with internal issues. He Syndrome of “not invented here” It is always present when innovations come from abroad. It can be difficult for a company to adopt inventions that were developed in collaboration with new companies internally. There is also a risk of competition or cannibalization of existing business solutions. Therefore, companies have to take into account the expectations of shareholders, especially short-term interests. vs. the long-term benefit.

In addition, the company’s operations may not initially be focused on the goal of the collaboration and the possible results that may lead to it Conflicts of requirements and delays later.

Finally, a great challenge for companies to overcome is the cultural. In large companies, a failure in culture causes high costs for those involved and is therefore different from other companies StartupsErrors are avoided from the start and are not recognized openly when they occur. Therefore, this is the central challenge for executives, vice presidents and C-level managers who hope to build an internal culture of innovation in their company that they will work with Startups, structure synergies and sensitize your company to take collaborative approaches seriously and give projects the support they need to become successful projects.

The collaboration and partnership between two companies of different sizes will never be easy, no matter how much they need each other. The success of a cooperation depends on the one hand on mutual understanding, in which each company recognizes the risks and differences that the other company is exposed to when starting the cooperation, and on the other hand, you can prepare yourself thoroughly for the development of the common advantages by pooling your strengths before signing a formal agreement.

Authors’ note to our dear readers: The second part of this article deals with platforms for collaboration between companies and startups.

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