Do you have a great idea for a technology product or service – but you don’t have the time, capital or resources needed to bring it to market?
There’s a growing trend for small businesses and start-ups to collaborate together. Many corporates are looking to get involved with start-up opportunities – either to find a clever new idea they can use in-house, or to JV in taking that product to market.
KPMG in the Netherlands has published a report on what makes a successful Corporate/Start-Up Collaboration. We’ve summarised some of their findings here.
For a corporate, there’s a lot involved in sponsoring a start-up product. There are various hoops to jump through: it will require management approval, risk acceptance, and the buy-in of IT.
This means that corporates rarely invest in products that are merely “nice to have”. Your idea must be compelling enough for them to embark on the project in the first place. You’ll need to prove that your product or service is solving a real problem that others will pay for.
Before you ring the doorbell, make sure you can present a clear, succinct and compelling proposition.
Practice a killer elevator pitch that you can deliver verbally; and write a powerful one-pager. Once you’ve found your corporate sponsor (the person who wants to progress your idea), it’s vital to make things as easy as possible for them. If you provide them with professional and on-point material, they can simply forward it on.
The clock is always ticking for start-ups – while corporates generally move at a much slower pace. This can be a major source of frustration for the start-up partner.
However, as long as things are moving forward (albeit not as fast as you’d like) then you’ll need to exercise patience. In reality, the road to a corporate collaboration is usually a long and winding one. According to the KPMG study, it takes an average of 9.4 months from the first meeting until the collaboration is established.
One thing you’ll both want to fast-track, though, is finding the shortest route to a minimal viable product (MVP). Your MPV can then be assessed on its merits, before proceeding to initial pilots and trials.
It’s also crucial to analyse the revenue model in these early stages to assess how it would work in practice. Which leads to our final point below…
As one start-up in the study said: “The days of unpaid pilots are now far behind us.”
A good collaboration agreement involves commitment on both sides. What will be the revenue model selling to (or with) the corporate? What is your share? How much time and budget will be spent to launch the collaboration?
As a start-up, you don’t have the luxury of running a project without a potential ROI. If your corporate partner is not prepared to put skin the game, find one that will.
Like to know more?
Are you thinking about a corporate collaboration? Just drop us an email.
Or if you want to know how KPMG Enterprise could help your business, visit our website, or give us a call on 0800 576 472.