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3 Ways Enterprises can be More Startup Friendly

We know that you really do want to be a good partner for startups ...

calendar icon May 20, 2017

If you’re striving to drive growth and get ahead of disruption by working with startups, we should talk about how you’re going about it. Most enterprises today are investing considerable resources putting the things in place that make them seem agile and innovative — such as innovation labs, incubators, accelerators, partnerships with universities, etc. — but unless they are able to actually get stuff done with startups in a fast, efficient way, their open innovation strategies may be broken.

We know that you really do want to be a good partner for startups — and, ultimately, to provide value back to your enterprise in the process — but how easy is it to move from initial conversation to getting a deal done? Be honest. Chances are that your attempts at partnering with startups are falling short. A lack of experience on both sides can often result in missed opportunities. And for all of your good intentions to form mutually beneficial relationships, you may even be doing more harm than good.

It’s really important to consider both sides of the equation here. An enterprise is large, complex, really busy, slow, and bound by legal and financial governance. Entrepreneurs by contrast are fast, super focused, hungry, energized and have very few boundaries. Each side has a ton to gain from the other and when a commitment is made to work together there’s usually great excitement and optimism. But then the startup gets handed over to vendor onboarding.

Most large enterprises do not have a procurement process suited to working with startups. They subject potential startup partners to their standard vendor procurement process — a long, expensive, confusing and often frustrating endeavor. Contracts are not tailored to startup business models (like SaaS), and the time and legal costs associated with navigating and negotiating these contracts can be more than the startup can bear.

The enterprise security review is virtually impossible for many startups to clear — most of the requirements are for long-established, well-funded companies and it takes a huge time and resource investment that most young companies don’t have access to. Often this leaves the startup having to make the painful call to walk away, worse off than before they started down the path of working with the enterprise and feeling not too positive about the experience. And it can also leave the enterprise with a reputation of not being startup friendly, meaning it may become more difficult to find startups willing to work with them in the future.

Startups just can’t afford your process inefficiency — in time or money. Having a desire to work with startups isn’t enough. If you want the benefit of their innovation and agility, you’ve got to meet them at least halfway. Startups will figure out pretty quickly which enterprises are able to follow through on the promise of partnership. And those are the ones they will want to work with.

So, how can you do better at partnering with startups?

#1: You need to establish an onboarding framework specifically for working with startups, with modified agreements and terms they can more easily meet.

#2: Don’t leave the entrepreneur to navigate the maze of your enterprise unattended, or they may be lost forever. Designate a lead for each startup you plan to partner with. This champion needs to guide them, advise them, advocate for them, connect them and make sure they are successful across all functions of the business.

#3: Track your partnership process through to conclusion and find the roadblocks. If you don’t review and measure along the way, you won’t know where your process is breaking down. Enterprises are large and sometimes lonely places for a small team trying to work their way through and get things done. Gather feedback from startups on your onboarding process to inform improvements and pave the way to success for both of you.

In closing, I’ll summarize with a haiku:

enterprise, startup
slow fast slow fast slow fast slow
half rabbit half mule
working together
is hard sometimes but worthwhile
getting to better
new ideas birth new
creations transforming world
something from nothing