We all know that relationships take work. They require compromise, balance and playing up one another’s strengths and weaknesses. The same applies to business partnerships. Big or small, personal or professional, everyone is looking for that winning combination that brings out the best each party has to offer.
\r\nAlthough large, established enterprises and rising startups reside on opposite sides of the business spectrum, magic can happen when the two work together. However, the spark in such relationships can quickly fizzle. This is not only because 90 percent of startups fail, but also because the two types of partners have different approaches to innovation – a key ingredient for business survival. So, how can these partners work together more efficiently?
\r\nBig companies and startups each possess something the other needs to innovate. Frankly, many large corporations struggle with the process of innovation itself. Although equipped with brand recognition, resources and funding, time spent blazing a trail could potentially take focus away from core products and services. Similarly, financial teams are driven by numbers and will often be reluctant to invest in something unproven without clear ROI validation and other metrics. Thus, innovation can mean bottlenecks, uncertainty and shifts in market perception.
\r\nOn the other hand, while startups crave credibility, cash flow, and better resources, they offer cutting-edge talent, best-of-breed expertise, less bureaucracy, agility, and faster time-to-market than their corporate counterparts. But, when large and small players bring their complementary strengths to the table, they fill in the other’s gaps and create new ideas, opportunities and revenue growth.
\r\nSmaller companies and startups sometimes fear that an enterprise partner is really out to steal their intellectual property. That’s not the case – corporations put their muscle behind scaling ideas, not so much in developing them. In contrast, startups are more focused on their people and culture. Harnessing these invaluable resources to innovate and execute together speaks volumes to established companies and potential partners.
\r\nDespite their attraction to startups, big companies must overcome a few challenges in working with their smaller counterparts, and startups need to take note. Often driven by fears of being taken advantage of, startups are reluctant to be fully transparent. This can make it difficult for the bigger companies to accurately assess a product or service’s viability. When a startup holds its cards too close to its chest, it becomes challenging for larger corporations to determine whether the startup is the right investment fit. Add that to the lack of a track record and partnering can be a risky proposition. These barriers – some real, some based on misperceptions and fears – have kept too many potential partners at bay. Akin to “taking the plunge” in marriage, businesses will find that a leap of faith can lead to positive outcomes.
\r\nAs with any relationship, big companies and startups must spend time together, far beyond emails and phone calls. For example, large technology companies should offer events for startups, inviting them to industry conferences, hackathons or competitions centered on a particular solution or market theme. For startups developing solutions based on specific business or industry needs, this is a great way to gain visibility. These events and interactions provide opportunities to get to know each other one-on-one, strengthen relationships and build mutual trust – as a vendor, channel partner or even potential acquisition. Startups need to use these types of industry events to find companies that share their philosophies, as well as their passion for ideas and partnership.
\r\nSimilarly, both types of companies should also get involved in their local technology and innovation communities. This will allow everyone to remain in the know around the latest processes and protocols, and uncover new ways to solve business problems. Partner to offer challenges, mentorships, events and opportunities to meet potential customers. Large companies can also establish or engage with innovation accelerators that give startups access to expertise and allow them to further their solutions.
\r\nMost importantly, emphasize open, two-way communication throughout this process – both externally and internally. The last thing big companies want is to appear foreboding to potential entrepreneurs. Be bold in your approach and respectful in your interactions.
\r\nWhen my company, Cisco, decided to partner with Japanese Internet of Things (IoT) firm, smart-FOA, both parties recognized that the value in the partnership far outweighed the risks. FOA, which stands for Flow Oriented Approach software, provides an information-sharing platform that can resolve problems and enable real-time decision-making. This is achieved by creating “information strips” that combine with the raw data collected by manufacturing workplace sensors – letting all of it flow on the network so information can be accessed from anywhere. It is essentially fog computing – decentralized processes at the network edge. With Japan known for its ability to utilize data from manufacturing plants, FOA was a natural evolution.
\r\nAs we worked together, we made sure to understand how our strengths and solutions complemented one another. From Cisco’s perspective, investing in smart-FOA would generate new value by bringing together goods, people, processes and data. In doing this, it would significantly expand Japan’s IoT solutions across global markets. But to unearth this value, we had to maintain open lines of clear communication, exhibit mutual respect and trust, and relish the quick and nimble pace of innovation that comes almost naturally to a startup.
\r\nEvery relationship requires compromise, communication and a little faith. When combined in the business realm, these elements establish the trust needed to drive a mutually beneficial partnership, with each side gaining confidence through investment in the other. The result is faster innovation, greater market share, and hopefully, making magic together for many years to come.
\r\n\n","docType":"article","guid":"articles_3637c81a4ea4562099ac49d35ee2c3ca","lastModified":"2018-11-07T16:00:00.000Z","published":"2018-11-07T16:00:00.000Z","structuredData":null,"subtitle":"Startups don't have to compete with the giants of their industries if they collaborate.","template":"legacy","title":"Better Together: Making Magic Between Big Companies and Startups","type":"article","author":{"avatar":"https://staging.business.com/images/author/5ac/e437651ee4719068b4571/100-100","bio":"Alex Goryachev is an entrepreneurial go-getter. He takes risks, thinks ahead, and loves making way for new innovations. Over the past 20 years, he’s made it his business to turn disruptive concepts into emerging business models. For him, it’s all about a passion to create a strategy and then drive it home to “get things done.” And as Cisco’s director of Innovation Programs and Strategy he has the opportunity to put this passion to the test on a regular basis. This includes leading a team responsible for infusing co-innovation across Cisco's ecosystem. Cisco Innovation hubs in major cities around the world, for example, make up the Cisco Innovation Center Program, led by Alex. These hubs bring together customers, partners, startups, accelerators, governments, research communities, and universities in a lab setting. Their goal is to discover, develop, and implement game-changing, outcome-based solutions. \r\n\r\nAlex began his Cisco journey in 2004 with a singular focus: Innovation. He defined and operationalized several high-profile Cisco initiatives, including the company’s Country Transformation plan for Cisco in Russia. He also held senior roles in Development, Marketing, Finance, and Channels, providing him a 360 view of how a great company ticks. Prior to Cisco, Alex was a successful consultant with extended assignments at Napster, Liquid Audio, IBM Global Services, and Pfizer Pharmaceuticals.","name":"Alex Goryachev","image":null,"slug":null,"social":{"facebook":"","linkedin":"https://www.linkedin.com/in/alexgoryachev/","twitter":null,"website":"https://www.cisco.com/"},"status":"enabled","title":null,"type":"Old BDC Member","user":{"imagePath":"https://staging.business.com/images/undefined","profile":{"company":"","jobTitle":"","website":""}}},"breadcrumbs":null,"channels":{"primary":{"name":"Business Basics","slug":"business-basics"},"sub":{"name":"Starting a Business","slug":"starting-a-business"}},"meta":{"robots":"index, follow","description":"Startups and larger companies don't have to be fierce competitors. They can work together to help each other thrive.","title":"Small and Large Companies Can Collaborate to Innovate - business.com"},"parsedContent":{"toc":[{"id":"whats-mine-is-yours","title":"What's mine is yours"},{"id":"feel-the-fear-and-do-it-anyway","title":"Feel the fear and do it anyway"},{"id":"a-better-engagement-model","title":"A better engagement model"},{"id":"true-story-a-tale-of-mutual-success","title":"True story: A tale of mutual success"}],"json":[{"component":"p","children":["We all know that relationships take work. They require compromise, balance and playing up one another’s strengths and weaknesses. The same applies to business partnerships. Big or small, personal or professional, everyone is looking for that winning combination that brings out the best each party has to offer. "]},{"component":"p","children":["Although large, established enterprises and rising startups reside on opposite sides of the business spectrum, magic can happen when the two work together. However, the spark in such relationships can quickly fizzle. This is not only because ",{"component":"a","props":{"href":"https://www.forbes.com/sites/neilpatel/2015/01/16/90-of-startups-will-fail-heres-what-you-need-to-know-about-the-10/#6f2f41df6679","target":"_blank","rel":"noopener external nofollow"},"children":["90 percent"]}," of startups fail, but also because the two types of partners have different approaches to innovation – a key ingredient for business survival. So, how can these partners work together more efficiently? "]},{"component":"h2","props":{"id":"whats-mine-is-yours"},"children":["What's mine is yours"]},{"component":"p","children":["Big companies and startups each possess something the other needs to innovate. Frankly, many large corporations struggle with the process of innovation itself. Although equipped with brand recognition, resources and funding, time spent blazing a trail could potentially take focus away from core products and services. Similarly, financial teams are driven by numbers and will often be reluctant to invest in something unproven without clear ROI validation and other metrics. Thus, innovation can mean bottlenecks, uncertainty and shifts in market perception. "]},{"component":"p","children":["On the other hand, while startups crave credibility, cash flow, and better resources, they offer cutting-edge talent, best-of-breed expertise, less bureaucracy, agility, and faster time-to-market than their corporate counterparts. But, when large and small players bring their complementary strengths to the table, they fill in the other’s gaps and create new ideas, opportunities and revenue growth. "]},{"component":"h2","props":{"id":"feel-the-fear-and-do-it-anyway"},"children":["Feel the fear and do it anyway"]},{"component":"p","children":["Smaller companies and startups sometimes fear that an enterprise partner is really out to steal their intellectual property. That’s not the case – corporations put their muscle behind scaling ideas, not so much in developing them. In contrast, startups are more focused on their people and culture. Harnessing these invaluable resources to innovate and execute together speaks volumes to established companies and potential partners. "]},{"component":"p","children":["Despite their attraction to startups, big companies must overcome a few challenges in working with their smaller counterparts, and startups need to take note. Often driven by fears of being taken advantage of, startups are reluctant to be fully transparent. This can make it difficult for the bigger companies to accurately assess a product or service’s viability. When a startup holds its cards too close to its chest, it becomes challenging for larger corporations to determine whether the startup is the right investment fit. Add that to the lack of a track record and partnering can be a risky proposition. These barriers – some real, some based on misperceptions and fears – have kept too many potential partners at bay. Akin to “taking the plunge” in marriage, businesses will find that a leap of faith can lead to positive outcomes. ",{"component":"em","children":[" "]}]},{"component":"h2","props":{"id":"a-better-engagement-model"},"children":["A better engagement model"]},{"component":"p","children":["As with any relationship, big companies and startups must spend time together, far beyond emails and phone calls. For example, large technology companies should offer events for startups, inviting them to industry conferences, hackathons or competitions centered on a particular solution or market theme. For startups developing solutions based on specific business or industry needs, this is a great way to gain visibility. These events and interactions provide opportunities to get to know each other one-on-one, strengthen relationships and build mutual trust – as a vendor, channel partner or even potential acquisition. Startups need to use these types of industry events to find companies that share their philosophies, as well as their passion for ideas and partnership. "]},{"component":"p","children":["Similarly, both types of companies should also get involved in their local technology and innovation communities. This will allow everyone to remain in the know around the latest processes and protocols, and uncover new ways to solve business problems. Partner to offer challenges, mentorships, events and opportunities to meet potential customers. Large companies can also establish or engage with innovation accelerators that give startups access to expertise and allow them to further their solutions. "]},{"component":"p","children":["Most importantly, emphasize open, two-way communication throughout this process – both externally and internally. The last thing big companies want is to appear foreboding to potential entrepreneurs. Be bold in your approach and respectful in your interactions. "]},{"component":"h2","props":{"id":"true-story-a-tale-of-mutual-success"},"children":["True story: A tale of mutual success"]},{"component":"p","children":["When my company, Cisco, decided to partner with Japanese Internet of Things (IoT) firm, smart-FOA, both parties recognized that the value in the partnership far outweighed the risks. FOA, which stands for Flow Oriented Approach software, provides an information-sharing platform that can resolve problems and enable real-time decision-making. This is achieved by creating “information strips” that combine with the raw data collected by manufacturing workplace sensors – letting all of it flow on the network so information can be accessed from anywhere. It is essentially ",{"component":"a","props":{"href":"http://www.maciejkranz.com/the-rush-to-the-edge-of-the-fog-survey-shows-that-cloud-computing-is-no-longer-enough/","target":"_blank","rel":"noopener external nofollow"},"children":["fog computing"]}," – decentralized processes at the network edge. With Japan known for its ability to utilize data from manufacturing plants, FOA was a natural evolution. "]},{"component":"p","children":["As we worked together, we made sure to understand how our strengths and solutions complemented one another. From Cisco’s perspective, investing in smart-FOA would generate new value by bringing together goods, people, processes and data. In doing this, it would significantly expand Japan’s IoT solutions across global markets. But to unearth this value, we had to maintain open lines of clear communication, exhibit mutual respect and trust, and relish the quick and nimble pace of innovation that comes almost naturally to a startup. "]},{"component":"p","children":["Every relationship requires compromise, communication and a little faith. When combined in the business realm, these elements establish the trust needed to drive a mutually beneficial partnership, with each side gaining confidence through investment in the other. The result is faster innovation, greater market share, and hopefully, making magic together for many years to come."]},{"component":"p","children":[" "]}]},"resource":null,"sponsorship":null,"thumbnail":{"path":"https://staging.business.com/images/content/5be/301177b4374a54a8b4588/1500-0-","caption":"Rido/Shutterstock","isBlurred":true},"bestPicks":null},"related":{"relatedArticles":[{"title":"9 Steps to Harnessing the Power of Your People to Innovate","canonical":"https://www.business.com/articles/team-innovation-tips/","slug":"team-innovation-tips","thumbnail":"https://www.business.com/images/content/5b7/30cfd1039eb044c8b456c/1500-0-","dek":"Innovation should be the core of an organization, not just a side project.","lastModified":"2018-08-14T18:38:00Z","published":"2018-08-14T18:38:00Z","sponsored":false},{"title":"7 Brainstorming Techniques to Innovate Your Business","canonical":"https://www.business.com/articles/brainstorming-techniques-to-innovate-business/","slug":"brainstorming-techniques-to-innovate-business","thumbnail":"https://www.business.com/images/content/5ee/b89f95a215e871c8b456b/1500-0-","dek":"Innovate your business with these unique brainstorming techniques.","lastModified":"2020-07-09T14:13:00Z","published":"2018-08-23T11:08:00Z","sponsored":false},{"title":"5 Tips to Become a More Innovative Leader","canonical":"https://www.business.com/articles/become-innovative-leader/","slug":"become-innovative-leader","thumbnail":"https://www.business.com/images/content/5b1/e98c91039ebf3768b457d/1500-0-","dek":"Engage your staff and boost collaboration by following these five suggestions.","lastModified":"2018-06-11T15:59:00Z","published":"2018-06-11T15:59:00Z","sponsored":false},{"title":"A Gamble You Can't Afford to Lose: Finding the Right Materials for Your Product","canonical":"https://www.business.com/articles/right-product-material/","slug":"right-product-material","thumbnail":"https://www.business.com/images/content/5b7/72f6951ee474c678b456a/1500-0-","dek":"Here are 7 steps to finding the best materials for your manufactured products.","lastModified":"2018-08-18T07:00:00Z","published":"2018-08-18T07:00:00Z","sponsored":false},{"title":"Break Free from Performance Management Shackles: Companies That Are Paving the Way","canonical":"https://staging.business.com/articles/performance-management-companies-that-are-breaking-free/","slug":"performance-management-companies-that-are-breaking-free","thumbnail":"https://staging.business.com/images/content/561/2b8c93087b1ef6f8b459d/1500-0-","dek":"Performance reviews are no longer working. 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See how and why these big players have moved to a new way of evaluating employee performance.","lastModified":"2015-10-06T17:00:00Z","published":"2015-10-06T17:00:00Z","sponsored":false},{"title":"Leveraging Specialized Knowledge: Strategies for Working With Consultants","canonical":"https://staging.business.com/articles/4-strategies-for-working-with-consultants-to-deliver-practical-solutions/","slug":"4-strategies-for-working-with-consultants-to-deliver-practical-solutions","thumbnail":"https://staging.business.com/images/content/560/42bfa2f87b1c17b8b4576/1500-0-","dek":"Before you hire outside help, learn the value a consultant can provide your business (while still staying under budget).","lastModified":"2015-09-24T13:00:00Z","published":"2015-09-24T13:00:00Z","sponsored":null},{"title":"What's Driving the Lack of Innovation in Companies Today?","canonical":"https://www.business.com/articles/faux-innovation-and-other-discontent/","slug":"faux-innovation-and-other-discontent","thumbnail":"https://www.business.com/images/content/59b/c01981039ebf5378b456e/1500-0-","dek":"Is your company suffering under the tyranny of faux innovation?","lastModified":"2017-10-04T19:53:00Z","published":"2017-10-04T19:53:00Z","sponsored":false},{"title":"3 Signs Your Innovation Budget Needs a New Approach","canonical":"https://www.business.com/articles/innovation-budget-spending-strategy/","slug":"innovation-budget-spending-strategy","thumbnail":"https://www.business.com/images/content/5ad/63dca1039eb0b788b457e/1500-0-","dek":"Innovation is about agile planning, frequent failure and regular resource reallocation.","lastModified":"2018-04-17T19:15:00Z","published":"2018-04-17T19:15:00Z","sponsored":false},{"title":"3 Surefire Strategies to Help You Stand Out from the Competition","canonical":"https://www.business.com/articles/how-to-differentiate-your-product/","slug":"how-to-differentiate-your-product","thumbnail":"https://www.business.com/images/content/5e8/5d91e9c658a63018b456b/1500-0-","dek":"As a business owner, you need to know how to differentiate yourself from your competitors.","lastModified":"2020-04-02T12:19:00Z","published":"2018-11-20T16:35:00Z","sponsored":false},{"title":"Why You Should Foster Client (and Customer) Relationships with Data and Authenticity","canonical":"https://www.business.com/articles/fostering-client-relationships/","slug":"fostering-client-relationships","thumbnail":"https://www.business.com/images/content/5c0/ab8b47b4374d6088b4578/1500-0-","dek":"Step out of the silo into a more collaborative, profitable client-agency partnership.","lastModified":"2018-12-09T08:00:00Z","published":"2018-12-09T08:00:00Z","sponsored":false},{"title":"Are Your Employees Bringing Out the Best in One Another?","canonical":"https://www.business.com/articles/how-to-improve-teamwork/","slug":"how-to-improve-teamwork","thumbnail":"https://www.business.com/images/content/5af/0639c92a3a43c048b45aa/1500-0-","dek":"The best teamwork occurs when complementary skills combine in an environment of respect.","lastModified":"2018-05-07T15:00:00Z","published":"2018-05-07T15:00:00Z","sponsored":false}],"relatedReviews":[{"doc_type":"category","thumbnail":"https://staging.business.com/images/rz/5db752e25a215e277d8b4588/Invoicing_AndreyPopov_BDC.png","canonical":"https://staging.business.com/categories/best-collections-agency-services/","title":"The Best Collection Agency Services of 2021","dek":"We've reviewed the best collection agency services for 2021. 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