21st century is an era of Innovation. Breakthroughs are being made more frequently than ever. The size of the companies that brings these breakthroughs is getting smaller and smaller too. This dynamic has created a whole new playfield of large companies collaborating with fast-growing innovative startups.
Along with huge benefits of collaboration between large companies and startups, there are many challenges involved too. However difficult these challenges are, they all have solutions. Here are some of the challenges and their solutions:
1. Challenge: Heavy Bureaucracy repels startups
According to the Procurement Leaders survey, CEOs of startups often face high barriers while collaborating with large companies due to heavy and sometimes unnecessary bureaucracy. During the survey, The CEO of one telecommunications startup tells Procurement Leaders that when their company tried to work with one large multinational corporation (MNC), they found that the contract approval process would take approximately 10 weeks.
Large companies are attracted to collaborating with startups due to the new and unique advantages and qualities that they bring to the table. One of the major advantages is Agility. Due to the agile nature of startups, they can innovate quickly and provide solutions to large corporates, which would take much longer time and more money to develop in-house.
The heavy bureaucracy during the collaboration undermines the agility and defeats the purpose of the collaboration in the first place.
Simplifying the collaboration process can have a huge impact on the returned value. It is important to carefully examine every part of the whole process and identify the area where the bureaucracy can be lifted.
Big companies do have bureaucracy and that’s just how it is. But there are always opportunities to lower it for the startups without compromising the company policies.
2. Challenge: Managing the Big Picture
Large companies usually have innovation needs across the organization. It is highly usually for a large company to be in collaboration with over a few dozen startups at the same time. Sometimes even more, if the company is deeply into tech space. People responsible for managing innovation across the company often struggle to grasp the big picture of the overall collaboration.
It is also usual for large companies to select multiple startups for a single project and carry of parallel pilot projects. This makes the overall picture of the whole company even more blurry. A massive amount of time is spent just to keep track of the innovation deal-flow in a company.
Solution: Find a new way of doing things.
Finding new ways of doing things is always beneficial. It is even more important when in the case of Innovation deal flow management because it can be one of the biggest challenges you would face in collaborating with startups.
Most companies utilize outdated workflow for managing their collaboration such as using excel spreadsheets and PowerPoints to keep track of the big picture.
3. Challenge: Limited access to key Information
To make any key decision, the data and information is the key. The same goes for collaboration with startups. There are numerous decisions made constantly and lack of data hinders the swiftness and quality of these decisions.
Even though the trend of making websites and social media is quite high among startups, these sources often do not have the key data needed about the startups for decision making. This makes it difficult to filter the raw information from the sales promises that startups make.
Solution: Central repository of Data for collaboration partners
Having a central repository of Data about the startups in collaboration pipeline can hugely impact the quality and speed of decision making. This data repository should hold key basic information about startups like their financial data, founder’s data and their profiles, and possibly their future goals and roadmaps.
Collecting this data and keeping it in a central repository can seem like a daunting and time-consuming task, but there are tools in the market that specifically help large companies in exactly this area. Including the data collected with these tools can tremendously improve the decision related to Innovation.