How To Navigate The Corporate and Startup Dance

  1. EDUCATE: Gain a broad understanding of an emerging market’s scope and activity and define your corporate objectives in response.
  2. ASSESS: Research the startups that compete in the market and create an unbiased shortlist of candidates based on your corporate objectives and investment parameters.
  3. ACT: Engage with the best startups that align with your corporate objectives and desired business outcomes.

1. EDUCATE: Gain a broad understanding of an emerging market

Often times when a corporation looks to make an innovation play or a financial investment in a particular category, the immediate impulse is to reach out to startups that they have seen repeatedly in the media. Similarly, the corporate “scout” might reach out to venture capitalists or an accelerator in their network, which by design leads to biased referrals. Other paths may include sponsoring an incubator or arranging a Silicon Valley tour.

2. ASSESS: Define an unbiased shortlist of startups

Understanding an emerging market is one thing but narrowing a field of hundreds — if not thousands — of startups down to a manageable shortlist for your objectives is hard to do. The key to the shortlisting process is to avoid bias. The inputs into this step should include your unique corporate and product strategy, as well as the startup characteristics that will best align to that strategy. As part of this filtering process, it’s wise to conduct interviews with startup candidates to gain a deeper understanding of their product roadmaps and sources of differentiation. Most organizations are not well resourced for this, so an objective partner is invaluable. The output of this step is a shortlist of startup candidates based on an unbiased process that brings to the forefront the companies that have the strongest strategic fit. Once a firm shortlist of startups has been established, it’s time to move into the action phase.

3. ACT: Take meaningful action that drives results

At the core, corporations and startups have very different cultures. Large companies are typically process heavy and exhibit an overabundance of caution. To a startup, large companies can seemingly spend an enormous amount of time and resources on analyzing, while showing little to no signs of acting. On the other hand, startups are resource constrained, so they must invest those resources only in places that can lead to immediate traction as measured by revenue, customer growth, or the next round of funding to keep their nascent business afloat.

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Venture Scanner

Venture Scanner

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Venture Scanner is a research firm providing reports and data on startups and emerging technologies. Visit us at www.venturescanner.com