For starters, even securing an initial meeting with a corporation can be difficult – let alone building a partnership. To understand what works, the authors attended 150 one-on-one meetings between start-ups and corporations such as IBM, Sony, SAAB, L’Oréal, Scania, Toyota, and AstraZeneca. Our observations helped identify five best practices to help start-ups generate corporate interest in collaboration after the meeting: 1) Have clear but flexible goals; 2) Solving existing problems and needs; 3) Addressing the ease of integration and collaboration; 4) Present use cases and new value propositions; and 5) Assemble the right team.
In a LinkedIn posts Last year, the general manager of PepsiCo Labs, Anna Farberov, shared her frustration with the strategic mistakes made by start-ups when pitching to corporations. Having attended 3,500 meetings, he felt he had a knack for detailing their mistakes. However, the backlash to his post was intense, with employees and founders of start-ups wanting to highlight the issues they face in approaching corporations. Both sides clearly want to work together. But they struggle to find ways to engage in successful and lasting relationships.
For starters, even securing an initial meeting with a corporation can be difficult – let alone building a partnership. Cold calls are a lottery. Corporations are a “black box” to external traders, and initiating contact with decision makers can be difficult. As one serial (and relatively successful) entrepreneur told us, “I can’t walk into their office, let alone start a collaboration.” If even experienced entrepreneurs struggle to get the chance to collaborate, one can only imagine how difficult it is for first-timers and early-stage startups.
Initiatives such as “speed-dating” events, where many start-ups meet corporate representatives, can speed up the process. In such events, often organized by intermediaries, corporate “scouting teams” seek to generate a flow of ideas, technologies, and solutions for the company. Despite such efforts, start-ups still fail to capitalize on this crucial first encounter.
At the first meeting, early-stage startups should garner enough interest to get a follow-up meeting. A good performance during the first interaction is important. There are usually no second chances. But how do start-ups get that critical second meeting?
To answer this question, we attended 150 one-on-one meetings between start-ups and corporations including IBM, Sony, SAAB, L’Oréal, Scania, Toyota, and AstraZeneca. The meetings are organized by Fire in Sweden—a nonprofit initiative that aims to promote innovation by connecting tech start-ups with large companies.
Of the meetings we attended, only 6% resulted in a commercial collaboration. Our observations helped identify insights on the best ways for startups to generate corporate interest in collaboration after the meeting. The following best practices have helped the start-ups we manage secure the all-important second meeting.
Have clear, but flexible goals.
Depending on their stage of development, startup goals may include collaborating on a proof of concept, working on a pilot, making a sale, or creating products. A startup with clearly stated goals helps the corporation see possibilities for participation. This can lead the corporation to offer alternatives that can be used in a quick start to tap unexpected opportunities.
For example, a gaming startup, Attractive Interactive, adapted its technology for SAAB to help pilots land in extreme weather conditions. The company’s COO said, “It’s exciting to apply our game development knowledge to new issues.” This collaboration would have been unimaginable for Attractive Interactive before it met SAAB. Not all start-ups need to pivot in this way but those that do may see potential they never imagined before. Therefore, clarity with flexibility is a virtue.
Respond to current problems and needs.
The members of the start-up team should understand the needs of the corporation in sufficient detail before the first meeting. Such preparation may include reading the corporate website and industry-related documents prior to the pitch. It adapts solutions to existing corporate efforts to create customer value by improving current processes, products, and services.
In one example, Toyota Material Handling partnered with IPercept Solutions, a deep technology startup that provides AI services for tracking industrial machines. At the initial meeting, IPercept was able to demonstrate how their solutions perfectly fit the needs and ambitions of Toyota Material Handling. The implementation of these tools will radically improve the process later, according to Matthias DahlgrenMaintenance Manager at Toyota Material Handling.
This example shows how startups that solve existing problems and provide new solutions can make themselves indispensable to corporations.
Solving the complexity of integration and collaboration.
Start-ups need to know how to integrate their products into current corporate processes. The startup should make it easier for the corporation to engage with them by first understanding the current workflows of the latter.
A start-up has developed a machine-learning algorithm to help Alfa Laval — a leading global heat transfer, separation, and fluid handling provider — accurately assess when its heat exchanger needs cleaning. Thanks to this collaboration, the corporation, founded in 1883, can deploy intelligent heat exchangers despite the lack of expertise in this domain.
Presenting use cases and new value propositions.
During the meeting, the startup must demonstrate how it creates new value for the corporation and its customers. One way is to talk through a corporate-specific use case. Alternatively, actual use cases based on startup engagement with other corporations can be presented.
These opportunities for value creation should be communicated through simple demo presentations that emphasize the ease of integrating the proposed solutions with existing pathways. Pilot collaborative projects with corporations are particularly useful for early-stage startups because they increase the legitimacy of the latter and help expand their client base.
gather the right team.
Beyond the founder(s) of the start-up, it is useful to involve business development and technical experts who are able to engage corporate representatives in a fruitful dialogue. Teams comprised of technically competent members (eg, CTOs) and those with business development backgrounds better understand how the startup’s technology benefits the corporation. With the right team, possibilities can emerge beyond the startup’s technology and corporate challenges. Founders whose technical background is strong but cannot explain their technology or its applications often fail to capture the interest of the audience. Teams should therefore include members who can explain the potential uses of their services alongside those who can answer technical questions.
The list of dos and don’ts below explains our observations of how start-ups ensure successful first meetings that lead to follow-ups and collaboration.
What to do at the first meeting.
- Answer the problems and needs of the corporation, and those of their industry.
- Tailor presentations to individual corporations and show how your startup can help them.
- Focus on the ease of integration rather than your technology.
- Present mock/use cases to demonstrate new value propositions.
- Be flexible and ready to pivot and co-create when the opportunity arises.
- Bring a team with expertise in technology and business development.
What not to do in the first meeting.
- Don’t just pitch: Listen to their needs now and in the future.
- Don’t use the same tone in different corporations: Customize.
- Don’t just focus on your technology but show how it can help the corporation.
- Don’t just send technical staff a highly technical presentation.
Start-ups can achieve a desirable level of engagement by first incorporating what they know about their corporate partners. Only then should they focus on creating products and services. Start-ups with clients who can demonstrate how their technology can help the corporation are almost guaranteed to gain interest later in follow-up meetings. Therefore their efforts should be directed towards understanding the value streams of the corporation, its customers, and potential ways of creating more value.
In this way, start-ups can overcome the challenges of navigating the often complex internal workings of a corporation. They can identify the corporation and its working methods. And they can build on this knowledge to receive an invitation to a second meeting where both teams can focus on innovation.
