Start a Business years ago meant open a new store, today this is not enough. Each organization that wants to develop a business idea must think that innovation and success are highly connected. Generating a business idea is a great starting point, but an idea doesn’t become a business without effort. Some emerging entrepreneurs understand the effort necessary to create a business, but they might not be familiar with the many steps required to launch a business venture. If you are willing to make effort to create a business, you have to know the steps needed to reach your goals. Consequently, many studies highlights how the companies believe that is necessary to collaborate in order to stay innovative. Collaboration become a strong point. From another point of view, we can state that innovation is led by start-ups. The most forward-thinking corporates know that the best ideas don’t always come from within their own business and have recognized the value in investing in and collaborating with start-ups. But because of early challenges, there is a common misconception that corporations and start-ups can’t form mutually beneficial relationships without one ultimately buying out the other.
Every relationship generates success and all the parties involved gain benefits. A company could learn about new technologies, their use and implementation but more important, innovate and enter in new markets in order to gain a competitive advantage. Start-ups could learn the best way to develop their products, scale and business strategy implementation. From the cooperation between start-up and corporate, we have benefits and risks.
With the aim to create a win-win situation for both organizations, we have to identify the possible benefits for both parties involved in the collaboration. It will only make sense for start-ups to jump in if they know for sure after the collaboration, they will bring revenue and notoriety. Benefit for start-ups also is the access to greater market expertise facing with experts in the field. Partnering with a larger firm allow the start-up to boost reputation and help them with future sales. They could benefit from a greater possibility to expand and can go for a low-risk internationalization.
Certainly, there are also a lot of pitfalls both sides should be aware of when collaborating. One of the first things start-ups should have clear is that working directly with a corporate close a lot of possibilities for them in terms of further opportunities. In order to avoid getting absorbed by the collaboration, start-ups have to schedule the budget and the metrics from the start of the deal. Another common problem that might arise is losing the start-up enterprising spirit or having delayed projects caused by the slow process of the corporates.