The WIN-WIN relationship between Corporate and Start-Up
The good strategy for a Win-Win partnership with a Corporate is essential. A recent conference at the HUB PBI has provided a clearer picture of what is expected from each side. Here is a summary :
1/ The Win-Win Relationship
On the Corporate side, innovation requires an acceleration of digitization. The collaboration with start-ups allows to cross anchors in the necessary developments.
On the Start-Up side, the financial link with the corporate provides a significant result. The volume of business could become promptly massive.
On both sides, the strategic approach goes through a common ambition: DEPLOYMENT.
Indeed, any launch of a POC requires a good assessment of the needs so as not to waste time in time-consuming and expensive developments.
Too often, the relationship stops here, just a POC! But it is important to go further and frame the development and optimize the deployment.
The start-up and the corporate have a common Roadmap to know in which direction to go, and how to create value. In order to help the relationship between Corporates and Start-ups, The Hub de la BPI has released a very useful tool. The DEAL MEMO, its name, is a document that is made available to Corporates to facilitate contracting with start-ups taking into account all the elements.
Different steps into the relationship between a Corporate and a Start-up
Collaborative steps between corporates and Start-ups to get an overview of a win-win relationship
2/ The Principles
In the graph above, we notice the different important steps to allow a structured relationship in the WIN-WIN relationship.
The BPI DEAL MEMO defines the key elements in the relationship:
- The identity of the actors, the project leaders
- Heart of the Proposal (with contents, commitments, expectations, agreements, …)
- The cost (integration and support)
- Innovative nature and strategic risk analysis
- The economic dependency of the start-up to the corporate (An important point)
- Privacy and Data Management
- Appendices to the relationship.
This easy-to-complete document settles the framework for collaboration by defining the KPIs, and the critical steps in the relationship development from the POC to the deployment.
The interest of the Corporate is to be able to take advantage of the agility of the start-up to find new services and new customers. It is therefore important to frame the means made available by the latter.
Indeed, the corporate will have more facilities to unlock situations. It will be able to ensure a budget to put the start-up in confidence in its actions. Both will define a Roadmap taking into account the times required for the different tests.
A follow-up by the Corporate also ensures good visibility for the Start-up on the valuation of its value proposition, where is it located.
Generally, once the tests are done and the Start-up has convinced the Corporate to launch the deployment, the ROI starts very quickly.
3/ The risks to be measured
The risks measured by a corporate to validate a POC are to be taken into account by the Star-up.
One of the major risks is the cannibalization of a service or product. The start-up must demonstrate a differentiating approach and, above all, not jeopardize the existing relationship. This requires the expertise of the teams, its agility compared to the Corporate’s one, or the time saved.
This allows us to stay focused on the core business for the Corporate while controlling the start-up in its developments to reach the target of customers and get the profit quickly.
Stay the course. In the case of developing a core business product or solution, it is important that leaders on both sides have the same vision. In this case, we will go into co-development which is more rewarding for a start-up as it ensures the sustainability of the relationship.
4/ The deployment
The deployment must go through a strong commitment from the corporate side. He is named a “sponsor” who is involved in the project and who vouches for the contact with the operational ones by assuring the necessary authority to advance the project or to unblock situations.
This sponsor is the link that makes it possible to define the needs necessary for the deployment and to help in contracting. It modifies the objectives according to the possibilities in-house (resources available and the speed of execution).
START-UP GOLF CHALLENGE – La Relation entre le Corporate et la Start-up
The sponsor follows the deployment. He sets the framework and helps the operational staff to understand. It filters requests to stay “Focus” and preserve the start-up facing the internet mechanism (process and others) that can have a real effect of a steamroller.
The sponsor provides operational feedback on the solution. He trains the teams and accompanies them in the deployment. This is not obvious, and some Grand Groups have created a dedicated department specifically for deployment.
The sponsor also identifies the levers for the adoption of the solution. How the solution will change on daily basis the operational stuff.
Contracting must be simple and light to allow the solution to evolve. It is indeed important to be able to make a pivot or to tweak the Business Model without too many constraints. Always keep this agility.
Committing to a user cost rather than a global cost, helps manage the deployment. It is important to agree on the terms of payments. Good BFR management is essential. Allowing the start-up to deploy is a role for the Corporate. The budget allocated for this is generally taken from the General Managing or from the Directorate of Innovation.
The Corporate is also a bank guarantor. It can help the start-up to raise funds or to borrow money.
The article was written following a conference to the BPI France Hub with the intervention of Stéphane PERRIN, Business Developer at the HUB. More information following the link.
Feel free to follow us on Social Network.