Jan 11, 2013 - startup    No Comments

Why more big companies should partner with startups

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Ever since facebook and youtube burst on the digital scene and got invested in or acquired by bigger corporations, the scene in the digital world was set to change and change it did. Startups started cropping up in every big city with the dream of having a successful exit strategy. It flourished so much that incubation programs were setup by big corporations and workspace like Google Campus were setup to allow startups to blossom to their full potential.

Big companies now have their eyes on the startup world knowing the potential that these small organisations have, even though sometimes they are run by fresh university graduates.

Enough of the poetics…

Having previously worked for a startup, GoSpoken, before joining Orange, I saw the gap between how a startup functions compared to a big company. I have to say it was an eye opener and here I share my thoughts in this blog post.

What do big corporations see in startups?

1 - most big corporations suffer from tunnel vision and need to turn to startups for creative out-of-the-box thinking

Ever wondered what it would have been like if twitter made its own apps? Well probably nothing much more evolved than communicating in 140 characters. With APIs, they have been able to tap into the creative power of the community; you get apps with sentiment analysis; a map of the world showing you where a particular word has been most tweeted, etc.

Startups are very much like this creative community which won’t be afraid to challenge what is the norm. Too many times I have heard “This does not fit into the operator model”. Product Managers stuck into the old doctrine of operators are only for communication. They fail to realise that the power has shifted now and apps like Whatsapp and facebook are stealing the show when it comes to communicating. Can’t blame the operators for not having created something like Whatsapp. Who would cannibalise their own business? No one would. But again a lot of people from big corporations are stuck in this old conventional line of thought. Why? I think it’s because we are in a transition period for the fight for innovation power between big corporations and startups.

 

2 – startups generate innovative products faster than big corporations

Needless to say the big corporations have too many checkpoints to be signed off that by the time the product is out, the requirements for the product has changed. Processes can be cumbersome and detrimental to product development. Startups easily breeze through development. Startups focus on making their products better regularly while big corporations have to wait 6 months or more to rework through the next phase.

Bureaucracy is a practically non-existent term for startups. It’s all about “just do it” like the Nika advert says.

 

3 – to complement their strategy

Why reinvent the wheel when you can acquire it! If a product is out there somewhere which matches a new product you would like to launch or enhance an already existing product you have, why waste time recreating it. Not only will you waste money it will also take you time to acquire the knowhow and experiences learnt from the existing startup. As they say, time is the only resource which you never get back and for a business time is money. So businesses save yourself some time so that you can focus on other uncharted areas!

 

To sum up, by partnenrship with a startup, you gain:

  • out-of-the-box solutions,
  • fast turnaround of solutions,
  • expertise and lessons learnt,
  • time to focus on other areas