Companies and startups can both create tremendous value when they work together. Startups can offer companies new ideas and process flexibility, while companies can provide significant resources and process efficiencies.
But it is often a challenge to initiate these collaborations, as there is uncertainty about which organizations to contact, how to contact them and who the right contacts are. When it comes to that elusive first meeting, both sides are often ill-prepared and unable to make the most of the opportunity.
Finding the right startup to work with can be costly for companies, and evaluating potential employees can be difficult. Initiatives such as in-house accelerators and networking events aim to address this issue, but their success is often limited. Such initiatives are expensive and limited in scope, leaving little room for surprises. Additionally, business processes are often not suited to the fast-paced environments that startups require.
Managers on both sides of the startup spectrum have several options to increase the success of collaborations. Below we share insights based on our observation of 150 meetings between 108 deep tech startups and 34 companies organized by ignite Swedena non-profit initiative that aims to foster innovation by connecting startups with large corporations and public organizations.
The First meeting
At the first meeting, managers usually present their company, their areas of focus and what they would like to work with. The management group typically includes innovation managers, partnership managers, research and development managers, product managers and specialists with a range of technical skills. Sometimes there is only one company representative, while other companies form teams to attend the meetings.
Most companies have clear goals: solve their current problems, bring new perspectives to their existing challenges, access innovative technologies and teams, test new technologies to transform their organizations, and create new value for their customers.
Most cooperations that go beyond the first meeting have three characteristics in common: clarity of purpose, openness to surprises and putting together the right team.
clarity of purpose
For companies, this means knowing what to expect from the first meeting right from the start. When company representatives state their needs and priorities, startups tend to conform to those needs.
Such clarity of purpose is achieved through understanding and communicating their current and future needs. It may arise from their strategic agenda. For example, Céline Farcet, Head of Technology Scouting Europe at L’Oréal, noted that the company is looking for startups that fit with “L’Oréal’s priorities and strategies.” to bring new, different and better products to market.” Scania, a Swedish manufacturer of commercial vehicles, also had a clear goal: the team was looking for a range of autonomous solutions for its trucks and buses. The task for both companies was to identify the startups to work with in specific areas.
Randon, a Brazilian conglomerate, came to its first meeting with potential startup employees with a clear goal of automating and digitizing their operations using AI and machine learning. We found that several opportunities arose during the meeting with startups, mainly because the startups focused their offerings on solving Randon’s specific problems.
Company officials need to prepare in advance by knowing their managers’ pain points and understanding their needs so they can determine startup suitability. This helps them assess whether the startup’s solutions meet their needs and can be targeted to the appropriate parts of their organization.
openness to surprises
Even when companies come with a clear goal of solving a problem, focusing on immediate needs can be a hindrance as it can mean missing out on unforeseen opportunities. In addition to the clarity of goals, those who are open to the new ideas of startups also benefit from such interactions. However, this requires the competency to understand emerging technologies and how such technologies can meet the current and future needs of the business. To do this, the right team must be put together.
Assemble the right team
The right team must consist of a balanced presence of technologists, business developers and decision makers who can grapple with the current and future opportunities of the startups. For example, the Scania team looked for ways to process data for moving platforms, autonomous vehicles, and imaging and radar technology. The team members present at the first meeting had expertise on the types of technology presented by the different startups and discussed how they could use such technologies.
The first meeting can be fruitful when the right team is present, and we’ve watched company representatives brainstorm ideas together and help startups bring their ideas to fruition, with slight twists and modifications to suit their needs. According to our observations, technicians asked specific questions about their current needs, while innovation managers or business developers were able to see the future/long-term perspective of the collaboration.
Teledyne FLIR, manufacturer of thermal imaging cameras and sensors, brought selected product engineers, customer insight managers and innovation managers to its first meeting with startups. The presence of the engineers helped the team to ask appropriate questions and understand the suitability, compatibility and usability of the proposed solution during the meeting itself.
In addition to innovation managers and tech experts, the participation of key decision-makers in the meeting is crucial. Having people who can make decisions from the very first meeting drives collaboration, as most startups aim for either a commercial partnership, pilot or proof of concept, and they work fast. Knowing who the startups are and what their goals are can therefore be used to the advantage of companies when there are people with decision-making power and resource commitment.
Questions to ask before the first meeting
To better prepare for meeting startups, business leaders should ask the following questions:
- What are our areas of interest and strategic agendas?
- Which current challenges do we have to solve?
- Who do we meet? Why are you interested in us?
- What do we want to take away from the meeting?
- How can their solutions be integrated into our company?
- In which areas can we work together?
- Do we have the right team composition?
- What can we offer?
When first meetings fall short of expectations
Meetings fall short of expectations for many reasons. The top three reasons we’ve identified from our observations are lack of preparation, sending the wrong team, and expecting a perfect game.
Lack of preparation
We’ve seen untapped potential when companies come to meetings with no clear purpose. They were just there to be surprised, and that wasn’t enough for the startups. Without any preparation (eg, researching the startup’s technologies), the companies only scratched the surface of the proposal and got nothing of value from the meeting and failed to have meaningful conversations with the startups.
Send the wrong people
Sending people without a mandate to make decisions, or people who can’t see the potential of a proposal because their background isn’t relevant, also renders initial meetings irrelevant.
Given the novelty of a startup’s technologies, sending out salespeople who lack an understanding of current technological developments and a way to envision how new technologies might be integrated into the company’s operations limits the discussion to “what is.” Cost of the “what”. could be.”
Furthermore, there is no point in sending unprepared company representatives to attend just to “see what’s out there” as they often refer startups to their websites or a recording opportunity for their business accelerators. The absence of need owners (those who have problems to solve or are looking for new opportunities) at initial meetings leads to wasted time and missed opportunities for both parties.
Expect a perfect match
When companies meet startups, they often expect to find a perfect match between their current needs and startup offerings; However, this rarely happens. What worked was for companies to present their current and future needs (and priority areas) and get startups to pivot and see opportunities for them to integrate their solutions. With the right team and a co-creation spirit, we have watched companies create space for startups.
The central theses
Preparation is essential, but business managers should leave room for surprises, as startup offerings are often original. Therefore, companies should be prepared to be surprised in a productive way. To move forward with novel ideas, they should send the right team, made up of people who understand the offering (e.g., domain experts in new materials and robotics), can imagine possibilities, and make decisions (e.g., innovation managers and people with a holistic understanding of the current and future needs of the company). L’Oréal carried out its engagement with curated teams that could see where the new technologies presented by startups could be used. They had teams ready to see what was possible based on the different offerings from multiple startups. We found that they made the most of the opportunities because of the way they structured their approach.
When there is a clear goal that aligns with the company agenda, companies conduct initial meetings, creating a space for the startups to fill, potentially solving their current and future problems. Even if nothing concrete comes out of the first meeting, at least the company representatives get new insights into current trends and new technologies. For that reason alone these meetings are worthwhile.