The corporate-startup collaboration relies on good communication. But there are always challenges to be met when two cultures meet—from style and language differences to the complex corporate communications structures that startups will need to navigate. With the right balance of patience and persistence, you can still make good progress here. Work with your corporate project lead or internal champion to achieve this.
A mutual understanding of what you do and don’t want from the relationship is essential.
Is it a co-creation project you’re seeking, or straightforward sales? A potential acquisition? Direct access to customers or a white label project? It’s in your interests to identify and articulate your intentions clearly, making sure that they are aligned with your potential corporate partner.
Asking questions and discussing any uncertainties right the way through the process will help counteract avoidable risks, enabling you to deal with issues promptly and manage expectations. In the same way, it’s also important to discuss any blockers or deviations from expected timelines that you encounter. The sooner issues are raised, the easier they will be to solve.
Communication between two very different entities can be challenging, as the rules of engagement may not be immediately clear. Ask questions upfront to help you establish whether this is the right partner for you. Figure out your deal breakers and explore them as soon as is appropriate. You might also want to ask corporates questions such as:
What’s your overall objective (acquisition, product development etc)?
What kind of budget is available and when?
Who has sign off authority? Is it only one person?
What are your payment terms?
What is the anticipated timeline? Are there any foreseeable blockers?
“Startups need a clear value proposition: ‘I have this, and for you to benefit from that, I need this’. Not just a generic offer like ‘we have an IoT platform’.”
Stefan Padberg, RWE New Ventures
Clear communication is essential in every aspect of collaboration, including timelines, costs, approval processes, technical or data integrations and intellectual property considerations. From the outset, both parties should know what they are looking to get out of the partnership and exactly what they will need to put in to get it. It’s when deliverables and associated risks aren’texplicitly discussed or agreed early on that problems, delays and even abandoned transactions occur further down the line.
It’s just as important for communications to be concise and documented if your project is to move ahead quickly and smoothly. That means short, to-the-point emails that clearly state information, questions and required actions.
While some level of discretion is often required during any initial discussions, withholding certain information might materially impact the interaction further down the line. Be transparent about where you are and where you’re going. Startups pivot and are often fluid in their direction, whereas corporate organisations will need a certain level of certainty to work with you.
Equally, be candid about capabilities; we have seen startups overstate their position, relying on the technical team to then build out promised features. This not only breeds mistrust in the relationship, but can put additional pressure on your team to deliver. Consider requests from the corporate organisation carefully and be honest about whether it’s the right direction for your product. Overpromising can seriously damage the relationship.
The execution timeline should never rely on mutual assumptions. Be proactive and discuss timing early on. Ask questions about the process and discuss how long each phase of the collaboration will take, making sure there are realistic estimates for elements outside of each party’s direct control (such as budget sign-off processes, procurement, contract negotiation, technical development and integrations).
Be sure that you understand product roll out or integration timelines as well as potential payment terms, as this will affect your cash flow. If 90-day credit terms are offered and your startup cannot work to them, negotiate. Touchpaper actively encourages corporates to set realistic payment terms to support startup businesses.
Many relationships start out with just a single point of contact at the corporate entity (often the project lead). But it’s also important to expand your relationships more widely within the organisation, forging links with with legal, procurement and marketing departments. Relying on a single point of contact creates the potential for risky bottlenecks; an unexpected absence or change in priorities can cause delays.
When you are dealing with your corporate collaborators in marketing, procurement and legal, remember that they may not be as engaged in the project as your main contact. After all, since it’s a non-standard transaction, your project could be causing them additional work. Be sympathetic to their position and cooperate fully to help the transaction progress quickly.
In the same way that it’s best to have more than one contact point on the corporate side, ensure that you are not the only one who is fully up to speed at the startup. If you have an especially small team and don’t have the resources to involve another person, use a project management tool such as Trello or Jira to record project progress and contact information. Make sure your team has access in case they ever need to cover the project.