Corporations face the challenge of generating their own disruption to boost their core business, or expand into a new business. Part of the disruption process entails engaging with start-ups to drive the next growth phase.
The opportunities for start-ups to run hard are greater and increasingly complicated. While every city, accelerator, conglomerate and non-profit is looking for their next demo participants, or proof-of-concept partner, start-up founders are heads down building their businesses, so they must navigate the multitude of hack-a-thons and corporate outposts jumping on the innovation bandwagon.
The balance of power appears to be tipping toward agile startups, and away from corporations. Creating the conditions for ideas and start-up collaborations to flourish is certainly nuanced and dynamic—but it can be done.
Last year, I met Levi Ware, founder of The Melodic Caring Project (MCP), a non-profit start-up that streams live concerts to children in hospitals. Levi was open to how MCP could collaborate with the AT&T Foundry.
With a mission to take the viewing experience to the next level, a collaboration was created between MCP, Quantum Interface, AT&T Foundry and Ericsson. The team of partners crafted a vision to livestream a concert in fully immersive 360-degree video to kids in their hospital beds. That vision came to life during singer Amos Lee’s performance in Austin’s famous Moody Theater earlier this March.
So how do corporations approach collaborations with start-ups in order for ideas—and results—to flourish?
Expectations are key when working across the corporate and start-up divide. Start-ups are often ready to jump into action after one positive meeting with a potential corporate partner. On the corporate side, that one positive meeting usually means crafting a plan to facilitate alignment and buy-in across several teams, and potentially requiring dozens of additional meetings to reach a final. Engaging in a proof of concept or quick test can minimize the uncertainty—but not always the timeline. It’s important to be transparent and set upfront expectations. Give visibility to the process for key stakeholders to develop a trusting relationship. If working together is not a fit, don’t be afraid to say no or provide feedback about the value of the solution to your company. For example, whether their pitch is a unique idea or the tenth monitoring solution for an application. Open upfront feedback resonates in the tech ecosystem.
Start-ups are fast moving and if they are “A” players, they’re usually impatient and have other “suitors.” Setting expectations is important, but timelines are also critical. We’ve seen corporates hesitate a couple of months and they’ve lost the opportunity with the start-up because their valuation has increased so much as to put them out of budget.
Display Empathy And Openness
Either party coming to the table with chests puffed out too wide more often than not will result in a missed opportunity. Start-ups inadvertently bring the swagger meant for venture capitalists into the corporate boardroom, which falls flat with companies grappling with disruption. Likewise, any complacency on the corporate side can be a turn off to millennial founders who value transparency and embody a non-hierarchical style. They operate in a community of shared ideas in which peer reviews are ubiquitous, including the review of your ability and willingness to collaborate. In a multigenerational environment, all sides need to have the confidence to learn, accept and adapt to new things.
Start-ups born out of addressing a problem subscribe to the approach that it’s not what your business is—it’s what your customers need. Corporates on the other hand talk a lot about customer centricity but don’t always know how to do it. They want to take on the start-up’s drive and speed. But when the rubber meets the road, the “not invented here” syndrome can rear its head. Be mindful of what corporate leaders may need to keep their teams inspired. Don’t put anyone in a position to admit inadequacy by belaboring the framing of the problem when you have an opportunity to share a solution.
The current context of innovation requires the vendor-customer model be utilized in new ways. Companies should resist the inclination to apply the vendor procurement framework to start-up partnerships. The zero-sum game strips the potential to maximize a win-win partnership with a startup where much benefit can be gained in the byproducts of a collaboration. Creating a mutually beneficial relationship starts with reducing assumptions with transparent conversations about each other’s needs. If you’re on the corporate side, ask start-ups directly about their main focus—is it better understanding of their customers, promoting their brand or gearing for additional rounds of funding? Identifying areas of alignment might reveal that a proof of concept is not the only opportunity for collaboration.
Be A Platform For Meaningful Exchanges
Corporate leaders shouldn’t fall into the comfort of soley consulting peers at the top. They must be intentional about getting information in creative ways. For instance, our Futurecast series is thought leadership aimed at generating conversation around bleeding-edge debates in the tech ecosystem. It’s one way we creatively capture insights from disruptors across the ecosystem to enable our business leaders to look at problems and technology use cases through a different lens. Likewise, it’s a platform for start-ups to gain visibility under our global brand.
Bridge The Gaps
There is a cultural divide between start-ups and corporations that can’t be ignored. Bringing parties to the table with context and understanding can bridge the culture gaps and rid the initial interaction of assumptions and misunderstanding. Start-ups should also understand how decisions are made across the corporation, if their technology is competing with projects in motion and connect their solutions values with the internal rhetoric/messaging in the company. If the corporate initiative is “digital first,” use that term to help everyone quickly connect the dots.
Positioning internal champions and catchers on the inside can help play the role of translator and guide. They can manage how a collaboration might fit into the overall structure. Don’t expect different outcomes under the same structure. Make sure start-ups weigh in on the fit of their technology to the space and path you’ve provided. Don’t silo the start-up from the realities within the company. Be a good host organization through transparency and translation.
Go Unconventional, Get Creative And Don’t Forget Empathy
This past year AT&T Foundry launched a series of Futurist Reports to synthesize the context, make bold projections about the future and delve into ways our company can collaborate with external partners. When it comes down to it, we’re all businesspeople operating in different environments. Start-ups should have empathy for C-suite executives steering big ships, and corporates must respect the lean resources of a start-up. A transactional pitch could be replaced by utilizing those on the frontline of disruption as advisors to a business unit leader. Get creative around forming these collaborations.
Ruth Yomtoubian is a full spectrum strategist and cross-cultural executive based in San Francisco, with experience running programs at the cusp of large brands and start-ups. As a director at the AT&T Foundry, she identifies business needs that can leverage innovation within the enterprise and evaluates startups in the tech ecosystem for strategic partnership with AT&T; positioning companies and developing their solution message. Yomtoubian is also an executive producer of both the broadcast thought leadership series Futurecast and the AT&T Foundry Futurist Reports to synthesize forward-looking insights, identify transformative trends and be a catalyst for innovation projection. Yomtoubian has helped establish the AT&T Foundry as a model for corporate innovation, bringing deep understanding to new approaches companies apply to their most compelling problems.