In order to respond quickly to changing consumer expectations and global trends, companies now need to look outside for sources of innovation. According to a 2020 study by MIT and Capgemini, startups will emerge as the main source of innovation for companies by 2025.
Startup partnering is a recent advancement in helping corporations maintain a competitive edge in the marketplace. This approach allows companies to gain strategic benefits while taking on less risk and costs compared to the more traditional venture capital methods.
As the latest corporate venture vehicle, startup partnering enables corporations to gain competitive advantages from startups who also profit by obtaining high-profile customers and user feedback which is crucial for refining their product.
Rather than buying the startup itself, a corporation can directly purchase a startup product as a venture client. The solution is implemented and tested straight away to validate its impact in improving existing business processes or products. Companies need a framework for partnering operations to optimize this process, from sourcing the best startups to managing projects.
There are two ways to initiate the corporate-startup journey:
1. A business unit sends in a request to find a solution to a problem that cannot be solved internally.
2. The innovation unit itself scopes out a specific problem that can be solved with a startup solution or probes a relevant topic of interest for future problems that can arise.
The search begins with sourcing which identifies top startups with fitting solutions to the problem.
The team then creates a shortlist of the startups and compares different features in an in-depth analysis. When the best-matched startup is selected, the solution is purchased.
Next, a PoC (Proof of Concept: realization of a particular method or idea to demonstrate its feasibility) or pilot is launched in which the startup product is implemented and tested to validate the technology. If it generates desired results and meets the KPIs, the next step is adoption through a partnership or license.
Companies like BSH Home Appliances, Daimler, Lafarge, and Telefonica have adopted this collaborative model to remain competitive. As startup partnering becomes more relevant over the traditional R&D approach, external sources of innovation will shape the future of corporate strategies.
GlassDollar offers an end-to-end PoC management software solution that helps global companies like BSH, Daimler, Telefonica, and Miele scale the adoption of impact-driven technologies.
Are you looking to make your startup collaborations more impactful and scalable? Then book a free consultation with our innovation success managers to identify the next steps towards optimizing your startup partnering activities.
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