When we started our adventure with startups, the first thing was an in-depth analysis of the startup ecosystems and essential success drivers that we conducted. Looking from the perspective of our previous consulting experience (mainly strategic consulting for biggest businesses) we had in mind benefits for big corporations. We were gradually monitoring corporations’ activity within this ecosystem and values that can be derived from it by startups and corporations. Our observations resulted in creating our current model of work and gave us very broad knowledge of the market.
Corporations struggle to cope with their internal development, the so called disruptive innovations, and, at the same time, need it badly as their core businesses shrink. Startups are the main drivers of innovations, they are more flexible in adapting to market trends, they change their business models easily and they make a pivot. They do not develop complex structures as corporations do. On the other hand, startups need a benchmark, big customers or partners who will guarantee positive cash flow and safety. There can only be one conclusion, startups and corporations need each other even though this relation is not always easy.
Europe B2B market.
Cooperation between corporations and startups is gaining in significance on the European market which is a B2B one. If a European start-up wants to expand its operations internationally, it needs to develop individual strategies to enter each market. As an European start – up wishing to increase its activities in the international arena, you should map out a strategy for entering each market separately, bearing in mind the diversity of clients, legal regulations and many other factors that significantly impede scaling at a pace of Whatsup, Uber or any other American companies where such a problem does not arise. Therefore, a broadly defined co-operation with a key global player gives a startup an opportunity to expand internationally much faster and sell its product locally or globally. So what are the opportunities for a startup and what corporations can offer it at different stages of development? And otherwise, what benefits from working with small businesses can corporations derive?
Corporations get involved at different stages of development of a startup while meeting numerous needs in the organisation. It’s worth choosing those which suite our startup best. There are also many models of cooperation between startups and corporations.
Early Stage Acceleration.
The accelerator program which considerably enhances the development of a startup is the earliest stage at which a startup can begin its interaction with a large organization. Most often it has a form of a 3-month program with workshops, mentoring sessions, giving opportunities to work at the same level with other companies that have joined the acceleration. Usually it is the first seed accelerator investor. However, the money is not its most important value. Ample opportunity to meet people who support startup business and get involved in its development arises. As a part of corporate programs, startups may repeatedly enlist the conceptual support of people related to business lines, IT departments or, for example, legal departments, which is very valuable, especially at the early stage of development. Such programs are provided by e.g.: Telefonice - Wayra Accelerator, T-Mobile - Hub:Raum, Barclays - Barclays Bank Accelerator. In case of the remaining accelerators which were not founded by a specific corporation we can notice involvement as a partner or a sponsor. Such a program is, for example, coordinated and run the biggest European accelerator Startupbootcamp.
The reasons behind the participation of a given corporation in such programs are mainly of marketing and HR ones. As a result such companies get access to most recent projects at their earliest stage and are given the opportunity to establish cooperation and competitive advantage much faster.
Late Stage Program.
Post - acceleration programs, supporting the development at a later stage (the stage after product development) are mainly focused on establishing cooperation or carrying out a pilot program with startups which were qualified for the program. The specificity of such programs lies in the creation of business value for a corporation and a startup, as well as a real test of cooperation in a real business context in the safest possible form for both parties. Such programs are mainly run by MasterCard (StartPath), Coca-Cola (Coca-Cola Founders Platform) and Unilever (Unilever Foundry). In this type of a program, a start-up not only gets an opportunity to make contacts but most of all assistance in getting through the implementation process, which is the highest value. If the pilot or the first cooperation is successful, a very often a decision is made to fully implement , and such activities have an impact on the stability of the business and the possibility of safe development with other companies.
D-RAFT creates programs for corporations oriented towards cooperation with ready to scale startups. It assumes greater maturity on the part of a startup and a greater involvement on the side of corporations which, in turn, translates into higher revenue results for both parties. A large number of pilot programs create the possibility of efficient testing and validation of innovation in a corporation, affects them and tests them in real business conditions.
Corporate Venture Capital Funds
It's another step and a model in which startup may cooperate with corporations. Corporate Venture (CVC) is a separate and thus independent vehicle that operates by investing in strategic areas for the corporation. They are usually investments of round A, B, C or later. Many corporations fulfill their strategic objectives in this way, as well as facilitate the development of companies that support their business. BMW iVentures that invests in startups related to mobility (from A to B) and projects supporting infrastructure for electric cars such as e.g.: ChargeMaster is a good example. A professional investor gets very actively involved in the business development of a startup. It's a very close and formalized cooperation.
If you are a startup, your co-operation with the investor can be very successful, and it not necessarily ends with the full sale of the company, which can often be a concern. If you have a startup, which can be strategically interesting for a corporation and we are looking for another round of investment, it is worth checking whether one of the players does not run such a fund.
Many points of contact, as well as opportunities for cooperation between a startup and corporation at every stage of development startup are apparent. This cooperation is not one of the easiest, but it is very important and useful for both parties. It would be impossible to create one holistic definition of that cooperation, it results from the fact that each corporation assumes planning its programs and funds in an individual way. It is worth checking what and how is created in the business area we operate. It is encouraging that more and more of the above mentioned activities can be observed in Poland and they become standard practices on the European market which has its hard economic benefits.
- is the Co-founder of D-RAFT Corporate Accelerator. He is responsible for business development and strategic partnerships, building the D-RAFT network ecosystem (accelerators, incubators and investors). Working with biggest corporate partners in Poland and Europe, Jędrzej has 5 years of experience in project coordination. He has been named Influencer for MIT in 2015.