On June 2, we held our latest Sifted Session in Vienna — an event that was all about bringing together startup founders and corporate innovators to talk about how they can work together in mutually beneficial harmony.
The event, part of the ViennaUP festival, featured speakers like Lars Roessler of BSH Startup Kitchen, the venture client unit of BSH Home Appliances Group, Carina Klaffl, who heads up the Female Founders startup accelerator and Joerg Bartussek, head of digital at Raffeisen Bank International (RBI).
Throughout the afternoon, founders and corporate executives shared their viewpoints on the startup-corporate divide and how this divide could be bridged.
Here’s what we learnt.
Do your due diligence
Baher al Hakim, CEO of healthtech business Medicus AI, kicked off the first panel saying that he could not see corporates’ objectives ever aligning with those of startups. He was disillusioned after taking his startup through two dozen corporate programmes, and finding that getting a foot in the door of corporates in the medical industry was pretty much impossible through the programmes they organised.
His main issue was that the time invested by his team did not equal the results –– and that those unfulfilled expectations were harmful for his motivation and his shareholders.
Unfortunately, his complaint is not unique. Many founders feel disillusioned by corporate accelerators. “I've heard founders say to me before that some of these corporate investment programmes are just kind of marketing campaigns,” Sifted’s Miriam Partington commented later in the evening.
So what to do about this?
Carina Klaffl of the Female Founders accelerator suggested that from the startup’s side, time wasting can be limited by doing research and talking to the organisers of an accelerator about what exactly they’re looking for.
Klaffl believes that partnerships can definitely work if a corporate has a clear-cut need that they do not want to solve themselves, but are open to partnering with a more agile startup that can build or implement a solution for them.
3x a week
We tell you what's happening across startup Europe — and why it matters.
If that is the case, and your startup fits the bill, setting clear KPIs are important to manage expectations and measure success from both sides. But more important, according to Klaffl, is talking to other startups which went through the programme and asking them how it was to collaborate with the organisation.
Nish Kotecha, chair and cofounder of SaaS company Finboot, said that startups should take the stage they’re in and what they’d like to get out of an accelerator programme into account as well.
His company participated in an accelerator organised by oil and gas company Repsol. He said: “The acceleration programme helped us shape the product with a lens into a very complex organisation in oil, gas and energy. It helped us understand complex supply chains before we went back and said, ‘We're ready.’ And they said, ‘Yeah, you are and we've loved working with you. So we can help.’ But would I do an acceleration programme today? No.”
Know your worth
“Sometimes I see startups having this feeling of being a little person compared to the big corporate or big VC,” said Sasha Lipman, founder of tech2impact, a company that supports impact founders and provides guidance for corporate impact innovation.
“This is the mindset shift that needs to happen before a startup walks into the room. Know what your value is and what you can clearly bring to the table,” she said.
Know what your value is and what you can clearly bring to the table
Klaffl agreed with this statement. “It should be a relationship on an eye-to-eye level. The mindset should be that we're doing this pilot together, we have certain agreements, and there needs to be something concrete back from the corporate.”
Lipman added: “It's not only about corporates, it's about any third-party involvement in your business — you need to be clear on your gos and no-gos.”
Christian Lindener is founder of Reflex Aerospace, a company he founded after working at Airbus. Spacetech, he says, like medical technology, is a space in which there are corporate gatekeepers that a startup has to rely on more than in other industries.
But if you know what you’re bringing to the table that they’re missing, the partnership can work wonderfully. “They’re not innovative in their business models, and they’re just not fast enough,” he says, speaking of Airbus. “We sell satellites in under nine months, they take six to seven years, we build them for €1m, they build them for €6-7m.”
But then again, he said: “We're not stupid enough to say, ‘We're a startup, we don't care about the the corporates,’ but we work with them in a way that is sensible. We don't go to programmes, we don't go to accelerators, because we don't need a sales workshop or a branding workshop, we need know-how and manufacturing capacity.”
Don’t put your eggs in one basket
Corporates and startups work very differently on a lot of different levels. For both sides, it’s good to know what to expect from partnerships, and to manage expectations, both with the corporate or startup partner and with external stakeholders, as Al Hakim mentioned.
Startups and corporates work at very different speeds. Corporates are generally slower to adapt to changes, which is a big reason why they work with startups, but can also suddenly shift priorities, leaving startups in the dry.
Definitely have a plan A, B, C and the whole alphabet of how to work with a corporate and what can go wrong because it most probably will go wrong
“Definitely have a plan A, B, C and the whole alphabet of how to work with a corporate and what can go wrong because it most probably will go wrong. Don't depend on the corporate in terms of product development and co-development. Try not to have only one pilot with one corporate because then you're just doing something for the corporate and you should be acquired,” Lipman said.
And the same goes for the corporate. Kotecha mentioned that his business has an out-clause in the contract with Repsol, to make sure that it can continue to be flexible, but also to give Repsol an out if it sees the partnership going south. “We can both walk away, they can exit their investment, and we can move apart.”
Alejandro Tauber is a freelance tech and business writer based in Amsterdam. He tweets from @AlejandroTauber
Thank you to ViennaUP and Raiffeisen Bank International for sponsoring Sifted Sessions \ Vienna. What to find out more about sponsoring Sifted events? Drop us a note at email@example.com