Three questions each startup CEO should ask herself before partnering with a large corporation

Shai Albaranes is Vice President of Innovation and Ventures at Orbia, a global corporation that generated $7B in revenues in 2019.

14 THE FUNNEL

A few weeks ago, I was invited by SOSA to speak with a group of startup CEOs in the water industry. After talking about innovation in general, and innovation in the water sector in particular, our discussion focused on startup–corporation relationships. On the one hand, we have many large organizations today repeating the mantra that says, “We would like to partner with startups”. On the other hand, many startups are looking for partnership opportunities with large corporations that can boost their global reach and significantly increase their sales. On the face of it, potential synergy is promising. However, the reality is much gloomier, and not many

organizations can actually demonstrate that they have successfully partnered with start-up companies. In most cases, the reason lies in the fact that the large corporation didn’t really know how to partner with a startup and didn’t build the required processes to do so.

Thinking about this issue, I came up with the following three tests that can help every startup decide whether the partnership it is seeking has high chances of becoming fruitful. If the answer to one or more of the below questions is no, I strongly recommend that you consider whether the risk you are taking is worth it.

Does the corporation you seek to partner with have a designated/official startup partnership program? If it’s an adhoc activity, is there a reliable entity providing expert support to the process itself?

Is there a designatedperson/team whose title/role contains “startup partnership”, “open innovation”, “start-up success”, or something similar?

Is there at least one success story of a fruitful partnership between this corporation and another startup?

Bonus questions:

If the corporation is comprised of several distinct business units, has there been a successful startup partnership with the specific business unit you wish to partner with?

There are many types of possible partnerships. To name a few:

• Joint R&D

• Improving corporate operations – mainly through increased efficiency and cost reductions

• Adding the startup product/service to the corporation portfolio

If you wish to engage with the corporation, mention any of the above potential partnership models and find out if there is at least one success story of another startup they partnered with using the same model. What do you think? Are there more questions you would add? Have you had a successful interaction with a large corporation? With whom?

Balancing the pressing need to find a reliable partner with the various warning signs described above is important for you in order to manage your limited resources wisely. Partnering with corporations has great potential benefits. Remember to pause and evaluate the situation before committing.