Key strategic outcomes for corporates working with scaleups

When we’re in the early days of talking to a corporate about solving a problem, one of the key discussions is around finding the key strategic outcomes from working with Scaleups (as compared to Startups, as our clients are not incubating/accelerating, rather they’re looking for partners ready now to solve a problem).

To assist I thought it worth sharing parts of this conversation that might help others, particularly those benefits that differ from when a corporate follows a more typical path of either working with an internal team or an existing/larger supplier.

This is clearly not one dimensional nor the same for everyone, but here’s our ten broad key strategic benefits:

1.    Have a view on the future

Startups are eyes and ears on what’s changing in markets, customers, regions, tech, culture and other factors that are impossible to stay across yourself. Spotting new trends and maximising insights on future customer demands is what startups do well (the good ones anyway).

We encourage looking at startups as lead indicators for the more established players.

2.    Enabling Innovation

In our experience you will get there quicker (problem solving), and cheaper, when working with a partner who’s already solving the problem. We also noted that the way to solve the problem is often different (when partnering) to what was expected – different in a beneficial way (e.g. new tech, hardware, thinking, business model, etc.)

Of course, for certain challenges internal teams or existing suppliers are the answer, but the question I ask a corporate is why use your own money (the corporate’s) when you can work with a scaleup who used their own money to make the mistakes?

3.    Go to market quicker

Whilst it’s not always about speed, enabling speed of execution is an advantage – it might still take 12 months to get a startup partnership live but without their lean practices it’s likely to be longer for the corporate.

Scaleups put things to market quick(er), gain feedback and insights, and then adapt and optimise accordingly – applying innovative strategies and tactics that can also be applicable to a corporate’s own problems/opportunities.

4.    Work with solutions that your customers actually want

Scaleups react to and accommodate changing customer needs. The corporate may understand their customer better, due to access to data and the ability to analyse this effectively, but scaleups offer more attuned and tailored solutions.

Execs can increase the proximity of their products to the customer through applying new processes and technologies to gain more immediate insights into customer needs and behaviour; and to adapt accordingly.

5.    Benefit from different ways of working

Often our corporate clients learn from the scaleups, viewing first hand new business practices and techniques that they can subsequently adopt to create more effective, productive, and impactful ways-of-working with the rest of the organisation.

6.    Optimising resources and reducing risks

Scaleups enable corporates to make more manageable and controlled investments around new initiatives.

Often our clients, when working with scaleups, are actually outsourcing research and development to optimise resourcing and mitigate risks, choosing if and when to bring things in house at their own pace.

7.    Cultural Crossover

Over time, when a scaleups works with a corporate, there is an invariable merging of experiences that both parties benefit from.

High energy, intensity, change-orientation versus change-fear, and being inclined towards seeking collaboration and sharing, are all aspects of a scaleups approach that can augment the cultural norms of the corporate.

8.    Talent Development

Invariably there is a crossover between teams, providing the established business with the ability to develop their talent (and this works both ways too, as there is deep experience within the corporate).

Working with a more entrepreneurial team can foster intrapreneurship within the corporate. Importantly, this behaviour must be supported by leadership or risk losing quality skills.

9.    Only invest or buy when you like each other

For corporations looking to invest, working with a scaleup first can minimise risk and provide valuable insights into potential strategic and cultural fit.

Integrating tech/teams, seeing growth and establishing key metrics is a smart way to drive an investment strategy into new markets, new capabilities, extension of technology, etc. and can represent an enticing reason to fast-track internal investment.

10.  Achieving ESG goals

As more and more capital flows into renewables, sustainability, environmental and corporate responsibility there are more opportunities for corporates to move beyond an ESG strategy and produce outputs.

Scaleups are solving large problems and are often looking for scale (with corporate partnerships one of the available channels to do this), so partnering is mutually beneficial as most of the problems to be solved are in new territories.

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