Corporations and startups can both yield tremendous value when they collaborate with one another. Startups can offer corporations novel ideas and process flexibility, while corporations can provide significant resources and process efficiency.
But it’s often challenging to initiate these collaborations due to uncertainty about which organizations to contact, how to contact them, and who the right people are to contact. When that elusive first meeting does occur, both sides are often underprepared and unable to make the most of the opportunity.
For corporations, finding the right startup to work with can be costly and evaluating potential co-collaborators can be difficult. Initiatives such as internal corporate accelerators and networking events aim to address this problem, but their success is often limited. Such initiatives are expensive and narrow in scope, leaving little room for surprises. Furthermore, corporate processes are often not suited to the fast-paced environments that startups require.
Managers on both sides of the startup-corporation spectrum have several options to help increase the success of collaborations. Below, we share insights based on our observation of 150 meetings between 108 deep tech startups and 34 corporations organized by Ignite Sweden, a nonprofit initiative that aims to foster innovation by connecting startups to large companies and public organizations.
The First Meeting
During the first meeting, managers usually present their companies, their priority areas, and what they are looking for in a collaboration. The management group usually includes innovation managers, partnership managers, research and development managers, product managers, and specialists with a range of technical skills. Sometimes there is only one corporate representative, while other corporations assemble teams to take part in the meetings.
Most corporations have explicit aims: to solve their current problems, bring fresh perspectives to their existing challenges, access innovative technologies and teams, test emerging technologies to transform their organizations, and create new value for their customers.
Most collaborations that move past the first meeting share three characteristics: clarity of aim, openness to surprises, and assembling the right team.
Clarity of aim
For corporations, this entails knowing from the outset what they want to get out of the first meeting. When corporate representatives present their needs and priorities, startups tend to adapt to such needs.
Such clarity of aim is achieved by understanding and communicating their current and future needs. It may flow from their strategic agenda. For example, Céline Farcet, head of technology scouting Europe at L’Oréal, noted that the firm was searching for startups that matched L’Oréal’s “priorities and strategies of bringing new, different and better products to the market.” Similarly, Scania, a Swedish manufacturer of commercial automobiles, had a clear aim: The team was looking for a range of autonomous solutions for its trucks and buses. The task for both companies was to identify the startups to work with in specific areas.
Randon, a Brazilian conglomerate, came to its first meeting with potential startup collaborators with the well-defined aim of automating and digitizing their operations using AI and machine learning. We observed that multiple possibilities emerged during its meeting with startups, mainly because the startups pivoted the focus of their offerings to solve Randon’s specific problems.
Corporate representatives need to prepare beforehand by knowing their managers’ pain points and understanding their needs so they can determine the suitability of the startups. This helps them assess whether the startup’s solutions can be matched with their needs and be aligned with the appropriate parts of their organization.
Openness to surprises
Even when corporations come with the clear aim of solving a problem, focusing only on immediate needs can be restraining, as it can mean losing out on unforeseen opportunities. In addition to clarity of aim, those who are open-minded to the novel ideas of startups benefit from such interactions. This, however, requires the competence to understand new technologies, as well as how such technologies can address the corporation’s current and future needs. To this end, the right team must be assembled.
Assembling the right team
The right team must comprise a balanced presence of technologists, business developers, and decision-makers who can engage with the current and future opportunities that the startups present. For example, Scania’s team sought opportunities regarding processing data for moving platforms, autonomous moving vehicles, and image and radar technology. The team members present in the first meeting had expertise on the types of technology the different startups presented and discussed how they could use such technologies.
The first meeting can be fruitful if the right team is present, and we observed corporate representatives co-creating and helping startups realize their ideas, with slight pivots and modifications to suit their needs. From our observations, those in tech asked specific questions about their current needs, while innovation managers or business developers could see the future/long-term perspective regarding the collaboration.
Thermal imaging camera and sensor manufacturer Teledyne FLIR brought specific product engineers, customer insight managers, and innovation managers to its first meeting with startups. The presence of the engineers’ helped the team ask appropriate questions and understand the proposed solution’s suitability, compatibility, and usability during the meeting itself.
In addition to innovation managers and tech professionals, key decision-makers’ involvement in the meeting is instrumental. Having people who can make decisions during the first meeting pushes the collaboration forward because most startups aim for either a commercial partnership, pilot, or proof of concept, and they work at a fast pace. Thus, knowing who the startups are and what their aims are can be used to the advantage of corporations if people with the power to make decisions and commit resources are present.
Questions to Ask Before the First Meeting
To better prepare for meeting startups, corporate managers should consider asking the following questions:
- What are our areas of interest and strategic agendas?
- What are the current challenges we need to solve?
- Who are we meeting? Why are they interested in us?
- What do we want to get out of the meeting?
- How can their solutions be integrated with our company?
- What are the potential areas in which we can work together?
- Do we have the right team composition?
- What can we offer?
When First Meetings Fall Short of Expectations
Meetings fall short of expectations for many reasons. The top three reasons we identified from our observations include lack of preparation, sending the wrong team, and expecting a perfect match.
Lack of preparation
We observed unrealized potential when corporations came to meetings with no clear aim. They were just there to be surprised, and this was not sufficient for the startups. Having conducted no preparation (e.g., researching the startup’s technologies), corporations ended up merely scratching the surface of the proposition and getting nothing worthwhile from the meeting, and failing to conduct meaningful discussion with the startups.
Sending the wrong people
Sending people with no mandate to make decisions, or those who are unable to see the potential of a proposition because their background is not relevant, also renders first meetings inconsequential.
For example, given the novelty of a startup’s technologies, sending salespeople with no understanding of current technological trajectories and no way to envision how new technology can be integrated into the company’s operations limits the discussion to “what is,” at the expense of “what could be.”
Moreover, there is no value in sending unprepared corporate representatives who are participating just to “see what is out there,” since they often end up directing startups to their websites or an intake opportunity for their corporate accelerators. The absence of need owners (those who have problems to solve or are looking for new possibilities) at first meetings leads to wasted time and missed opportunities for both parties.
Expecting a perfect match
When corporations meet startups, they often expect to find a perfect match between their current needs and startup offerings; however, this rarely happens. What worked was corporations presenting their current and future needs (and priority areas) and engaging startups to pivot and see opportunities for them to integrate their solutions. With the right team and a co-creation spirit, we observed corporations creating space for startups to create.
Preparation is essential, but corporate managers should leave room for surprises because startups’ offerings are often original. Hence, corporations should prepare to be surprised in a productive way. To progress with novel ideas, they should send the right team, comprising those who can understand the offer (e.g., area experts in new materials and robotics), envision possibilities, and make decisions (e.g., innovation managers and people with a holistic understanding of the corporation’s current and future needs). L’Oréal conducted its engagement using curated teams who were able to see where the new technologies presented by startups could be utilized. They had crews ready to see what was possible based on the various offers from multiple startups. We observed that they made the most of the opportunities due to the ways in which they structured their approach.
When there is a clear aim aligned with the corporate agenda, corporations lead first meetings by creating a space for the startups to fill in order to potentially solve their current and future problems. Even if nothing concrete comes from the first meeting, at least the corporate representatives will receive new insights about current trends and new technologies. This alone makes these meetings worthwhile.