Building bridges: startup strategies for corporate collaboration

Andy Robb
Partner, Deloitte Ventures

As the old saying goes, “no person is an island” and the same can be said of businesses. In today’s world, it’s not always true that big beats small. To navigate and win competitive markets, we often see that you need to be both fast and stable, scrappy and experienced, risk-takers and measured, creative and methodical, disruptive and credible. So how do you bring it all to the table? By looking outside of your own organisation and partnering for growth.

Startups are often praised for their ability to move quickly, take risks, and innovate, while corporates are valued for their stability, reliability, and experience. By understanding these differences, startups and corporates can work together to create a powerful force for growth and success.

Building a successful partnership for growth is more than just viewing each other as a customer or supplier. Both the corporate and startup need to invest in the relationship to set it up for success from the offset. If you’re a startup considering the opportunities to partner for growth, here are three things we recommend investing time into:

1. Aligning on vision

CVCs participated in 21.7% of all European VC rounds in 2022—the highest annual percentage to date.¹ Instead of just seeking capital investment from corporates, startups should look to explore other growth levers - such as market access. To do this, startups need to choose the right partner. It’s important to identify a corporate that not only has complementary capabilities, but also shares similar goals, values, and work culture.² This ensures that the partnership is founded on mutual understanding and commitment to the vision.

Unsurprisingly, the primary reason for a corporate to collaborate with a startup is to solve problems they cannot solve themselves.³ Startups should take time at the start of the relationship to deeply understand the problem they would be helping to solve. This not only gives both parties a clear view of product-fit and size of opportunity, but it also helps your champion in the corporate articulate the value of the collaboration to their stakeholders and ultimately gain the support needed to move forward.

2. Shoot for the moon or stay true to the core?

Corporates looking to collaborate with startups either aim to shoot for the moon or to optimise their core operations. During the pandemic, 85% of CEOs accelerated digital initiatives; however, many struggled to articulate strategy and progress past the initial technology investment.⁴ This demonstrates the increased importance for companies to ensure that they place their bets effectively and strategically.

When companies collaborate with startups effectively and at the right level of the organisation, they can increase their chances of success at the core - and at the edge of their business. With better products, improved processes, and reduction in cost being beneficial business outcomes. It is important for startups to note that moon-shot bets often require CxO input, and process optimisation requires localised process expertise from the corporate; to ensure effective decision-making and adoption.

Notably, 41% of startups agree that gaining internal acceptance to pilot their technology is difficult.⁵ As such, investing in long-term relationships with key decision-makers on the corporate side is the key to either edge or core innovation being successful.

3. How you’ll get there - flexibility and communication

Flexibility and adaptability are also crucial in any partnership. Startups need to be willing to modify aspects of their business model, product offering, or processes to meet the corporate’s needs without being engulfed by them - with clear communication being essential to ensure that the requirements from both sides are shared and understood. Both parties should keep each other informed about progress, challenges, and growth opportunities.

Startups should ensure they share their strengths and differentiating USPs to remain at the forefront of a corporate’s agenda and remain strategically relevant. One way to do this, where possible, is by identifying the corporate’s venturing team. This team will typically act as a convener, helping startups navigate the corporate landscape, bringing the right people to the table, and helping facilitate collaboration.

Collaboration between a startup and a corporate can be the key to unlocking growth and realising combined limitless potential.⁶ For a startup, collaborating enables you to tap into valuable resources such as funding, expertise, distribution channels, and industry networks that would be otherwise out of reach. For the corporate, collaboration gives access to innovative technologies, increased agility, and speed to market. When done well, collaborating can create a range of new and exciting opportunities for both parties.

Curious to explore startup collaboration opportunities with Deloitte? Connect with our Startup Ventures team.

FOOTNOTES
¹ Pitchbook, CVCs take part in more than a fifth of European VC deals, 2023
² Collaboration between Startups and Corporates, 2018
³ State of Venture Client Report, 2023
⁴ Deloitte Insights, A new language for digital transformation, 2021
⁵ Collaboration between Startups and Corporates, 2018
⁶ Collaboration between Startups and Corporates, 2018