This summer, Combient Foundry joined forces with Maki.vc to answer one question: what are the greatest pain points in startup-corporate collaborations?
Our survey received 81 responses from CEOs, founders, and executives from startups, and directors and managers of corporate collaboration initiatives. In other words, all recorded responses came from decision-makers, with key experience in this field.
Collaboration generates new revenue for both parties
For any strategy, the most viable end goal is revenue. This is especially true for our startup respondents: 51% of them said revenue generation is the primary motivation for collaboration. This is a very sharp contrast against the corporate respondents, of whom only 6% said this to be the primary motivation. Instead, 47% of the corporate respondents say their collaboration with startups have helped them improve efficiency in their ways of working.
Measuring startup-corporate collaboration against this metric is obviously something partaking parties seem to do, and many are agreed that it has produced desired results.
That being said, only 35% of corporate representatives and 41% of startup respondents reported having participated in at least one commercial deployment of a collaboration project. It’s clear that these figures might be higher if more PoCs reached the commercialization stage.
Corporate procurement is a split issue
Perhaps not surprisingly, startups are wary of corporate procurement processes and how much time they take. What is perhaps less surprising is that corporate employees responsible for the projects defend their processes. That being said, this is not a strongly held opinion, universally. Corporate responses were split right down the middle at 50/50, meaning there is an ongoing conversation within the boardrooms about how to create more lean processes in relation to the field.
To probe the structural differences from another angel, startups were asked about their readiness to engage with large, multileveled corporations. Though fairly confident in their abilities, the percentage of unready respondents was significant: 44% stated their level of readiness was suboptimal to some degree. When asked about startups’ established processes, corporate representatives showed little reservation: 58% of them said they partially disagree with the notion that startups’ unestablished processes hinder the results, and another 37% said they mostly disagreed with the notion.
Differentiation is a major upside
The most prevalent, mutual upside for both parties turned out to be a clear choice: both startups and corporations found their collaboration to be a great differentiator from their respective competitors.
When contrasting this against the main goals for collaboration, a surprise arises. Only 6% of startup respondents reported differentiation as the primary motivation for collaboration (this percentage was 26% among corporate representatives). The result points to a probable communications issue. If startups are headed into collaborations expecting mainly revenue out of the process, but their results also show they receive other competitive advantages against other startups, corporations should emphasize their perceived upside in pitching or negotiating the collaboration. For corporations looking to expand their collaborative activities, adopting this fact into their sales pitches should be explored.
Startups are open for tailoring solutions
Corporations lean towards not looking for tailor-made solutions when developing a PoC with a startup. 55% say tailor-made is something they do not agree with, at least in part. Startups, on the other hand, are open to customizing their solution: 88% at least to some degree. Exclusive rights to the developed technology are a little more settled: 65% of corporates are not looking for that. Startups, in this case, are more split, but still, 56% are not readily open to the idea. Contrasting the two parties together, it is clear that the prevalent myth of corporations requiring lots of tailoring does not hold up entirely. Many realize that for startups it is not a viable course for developing their product. It is an attitude that will probably become even more prevalent, as more corporations have more direct experience as an actor in the startup ecosystem.
One final note
Surveys rarely return identical results from two different demographics, but this time around we’ve witnessed something of an anomaly. One question asked respondents to point to which party initiated their ongoing or completed collaboration. Four-fifths of both startups and corporates claimed it was their own initiative, with one-tenth of respondents saying it was the other party and another one-tenth credited a 3rd party (e.g. investors or other strategic partners).
This is the beginning for a series on startup-corporate collaborations we are undergoing with Maki.vc. The following installments will dive deeper into the process of initiating, undergoing, and scaling collaborations, with commentary from experts both in the startup and corporate spaces. We’ll be back in October, stay tuned for more!