Many things can go wrong in startup-corporate-collaboration. Together with McKinsey we want to hear from you how things can work better
By Karel Dörner, Senior Partner at McKinsey & Company
You’re way past the deadline on your project. You need feedback urgently, but the corporate partner is taking its time – once again.
But be assured, you’re not alone in your frustration. And we want to help.
We would like to find out, with you, exactly where the problems lie in start-up/corporate collaboration and what companies should improve to better involve you as key innovators.
Share your thoughts with us by taking part in a study being conducted jointly by McKinsey and Bits & Pretzels. Completing the survey will only take a few minutes:
Spoiler alert: We will randomly draw one name from among all survey participants. This person will have the opportunity to take part in a workshop facilitated by two top start-up experts. More on this later.
Here’s the thing: although in, e.g., Munich, high-caliber companies from the B2B scene meet with founder teams in the areas of artificial intelligence, robotics, or mobility and many partnerships result, these meetings too rarely lead to any true start-up/corporate collaborations.
And although ~80 percent of corporates interact with start-ups in more than two programs on average, only 10 percent of large companies worldwide that engage with innovative founders in a partnership have the ideal setup to achieve the sought-after success.
And that’s not just a Munich phenomenon: the spark in the relationships fades quickly. Why is that? Here are three hypotheses and solutions that can be helpful in turning this around:
1. Specify clear quantitative targets and expectations right from the start
Companies and start-ups often pursue very different objectives in their collaboration. If these differences aren’t clearly identified, the most important piece is missing – agreement on the objective, whether strategic or concrete. The fallout from this can lead to both sides losing time and motivation unnecessarily. The objectives don’t have to be identical, but should at least complement each other.
When the company opens up its sales channels to the start-up’s new technologies, it gains access to the new technology or even to a new market or market segment. There’s no set formula, but one thing’s for sure, captial alone isn’t enough. Knowledge, time, contacts – there’s much more that both sides can do to maximize the success of the partnership. One key to achieving the shared objectives is to make them concrete and quantifiable: from the very beginning, companies need to think through how the engagement can add long-term value for both the company and the start-up partners. However, especially the influence of partnerships on revenue and profits – aspects so relevant for corporates – are almost never systematically documented.
2. Focus on concrete, business-relevant use cases
Even if there is consensus on which strategy should be followed to capture medium-term value-creation potential, this doesn’t necessarily mean there’s a clear use case – let alone one tied to clear business targets. Often the corporate side takes a leading functional role in the collaboration. While this contributes to knowledge transfer to a certain extent, it still usually isn’t sufficient enough to facilitate communication with the founder teams regarding the collaboration. Many times, the corporate innovation team and the start-up colleagues concentrate their efforts on technologies and topics with limited potential for monetization in the real world, which then get held up in the proof-of-concept stage – and even here, 90 percent of all decisions made require more than two months, an eternity in the time horizons of founders. In this sense, it would be better to focus more on concrete, business-relevant use cases.
3. Consciously select the collaboration model
Collaboration between start-ups and companies can take many forms: from corporate venture capital funds to participation in accelerators to increasingly fewer institutionalized collaboration models. The most successful programs, however, are not tied to one single model. They involve various ways of engagement, whereby each decision on specific objectives and motivations is made by both the corporate entity and the start-up.
A key factor in choosing the best model is the question of what both partners can bring to the table: sales channels, additional products and services, capabilities, talent, customers or technologies – there should be transparency from both sides here.
And now it’s your turn! What’s your experience in collaborating with companies? In your opinion, what should be improved? Take a few minutes and share your thoughts with us here in the joint McKinsey and Bits & Pretzels survey. We will randomly draw one name from among all survey participants. This person will have the opportunity to take part in a strategy workshop facilitated by Karel Dörner from McKinsey & Company and Felix Haas, co-host of Bits & Pretzels.
We will then present the results to you at the Bits & Pretzels Networking Week in September.
About the author
Karel Dörner, Senior Partner at McKinsey & Company, has founded a number of companies in the past, maintains an extensive network in the European start-up community, and is one of the founders of the Digital Top 50, the European Tech Founder Awards.