Corporate-Startup Engagement: taking a pass on the perennial POC posse
Run this experiment: post a generic job on LinkedIn, and watch the multitude applications flow in. The huge majority of applicants will likely be way off point. And it’s a great analogy for ill-conceived startup contests, given the market for startups desperate for a chance with a corporate brand.
There are hundreds of thousands of startups out there, and these days every corporate and its dog is engaging in initiatives to work with or leverage the strengths that these startups can offer. There’s an inordinate amount of spin and fluff: pitch contests, innovation garages, endless panel events, etc. etc.
With that as the context, engaging with the ‘entrepreneurial ecosystem’ is very, very easy.
But the real trick is not in engaging with the ecosystem, but rather in generating genuine and demonstrable commercial impact through collaboration with these startups. And as we have seen play out in ASEAN and more widely across APAC over the past few years, for corporates, doing that is a lot more difficult.
For all of the hundreds of thousands of startups out there, if we’re talking impactful corporate-startup engagement (CSE), it’s not a numbers game.
Run this experiment: post a generic job on LinkedIn, and watch the multitude applications flow in. The huge majority of applicants will likely be way off point, entirely inappropriate for the requirements of the job, and a far cry from an appropriate cultural fit. That is, unfortunately, the nature of the beast given the market for jobseekers. And it’s a great analogy for ill-conceived startup contests and open innovation challenges, given the market for startups desperate for a chance with an established corporate brand.
So if you post a bunch of generic problem statements, you better be prepared for a flood of immature, inappropriate startups that lack the required strategic fit to come running. Get ready for those startups that live hand-to-mouth, or to give it a more appropriate term, POC-to-POC. Perennially surviving on the charity of corporate innovation budgets, but never managing to create real value for their customers, the corporates. These startups comprise the Perennial POC Posse, and they’re not the ones for you.
Why is it that so often the best candidates for jobs come through personal connections, or existing employees? Because those are the people that have been pre-vetted, by people who have a good understanding of what you’re about and what your company aspires to. It’s not the numbers of applicants that generate the best candidates, but rather the thinking that sits behind putting candidates forward, by people in the know, who have considered the factors at play. And the same is true with CSE.
It’s not a numbers game. On the contrary, prior to any engagement with startups, the strategic assessment of emerging business model innovation and evolving technology enablers undertaken should be so deep and diligent as to preclude large numbers of startups from ever being under consideration for collaboration. If you’ve done your innovation strategy effectively, you’ll know the small group of startups that can potentially offer you value in an uncertain future, and if you have really done your work right, you will want to work with them, but they won’t want to work with you.
The startups that you are after are not the Perennial POC Posse; they’re validated, proven, in-demand. They’re the growing companies that have experience turning POCs into pilots and pilots into commercial outcomes. They’re mature, and they’re growing. They know what it’s like to work with corporates, and they’re well-versed in doing so. They’re competent, and they’re corporate ready. And if you’re not startup-ready, they will see straight through you. And walk on.
Ultimately, the greatest value is only unlocked by combining the scale strengths and deep domain knowledge of corporates with the entrepreneurial execution of startups. But too often corporates are being led by FOMO or just playing at innovation, rather than focusing on strategy and structured selection.
It may be more difficult to do so, but when it comes to CSE, it’s far more beneficial to take a pass on the Perennial POC Posse.