BR Exclusive. Emanuele Musa (Babele) - How startups and corporations can work together: Opportunities, risks, best practices

Emanuele Musa, the co-founder of Babele, a a collaborative innovation network for business modeling, had the keynote speech on the third day of BR’s Foreign Investors Summit, and talked about the ways in which corporations and startups can collaborate, as well as the risks and opportunities involved.

According to Musa, there are five different approaches to the collaboration between corporate players and startups, and each of them has its own pros and cons:

Startup pitches and prize events

Pros: allows company to get better brand visibility in front of startups, understand what startups are doing
Con: a really superficial way to engage, won’t lead to a strong collaboration

Innovation in bootcamps/hackathons

Pro: exposure to plenty of different ideas
Con: no time to explore all the different solutions – hard to get from idea to actionable follow-up

Startup accelerators/support programs

Pros: the most effective way to engage with startups
- in UK – EY, Barclays; Italy – Electrolux with 5 different accelerators; cheap R&D initiative
- used by UN to achieve Sustainable Development Goals
Con: accelerators are costly – take a long time, need proper mentorship from companies

Partnerships & collaborations

Best example in Europe – Daimler’s program in Stuttgart – Startup Autobahn – startups invited to a pitch event and get all directors from Daimler and other companies in the area to look at startups and engage in discussions aimed at creating a collaboration/pilot for a year – once you go there, after the pitch event you assist experimentation and pilots run throughout the year between startups and Daimler – Daimler forcing itself to work on this for one year and making sure it comes up with a prototype
Climate-KIC – Europe’s largest climate tech accelerator – expert coaching, pitch training, workshops

Investments & acquisitions

Pro: allows diversified portfolio of companies creating value for organisations
Con: costly; company working on its own

Emanuele also spoke about the pain points that can appear in the collaboration between corporates and startups:

Startup’s stage of development not matching expectations of corporate partner
Corporations moving like elephants – long cycle times and slow decision-making
Poor communication & changing contact points and unclear processes
Various cultural problems and cultural issues

He also went through the risks, challenges and best practices of these ventures:

Risks
- Startups getting engulfed by one customers, premature scaling, waste of resources
- Corporates: reputational damage, lost investment, misaligned employees, unsure outcome
Challenges
- For startups – duration of sales cycle, client’s protective middle management, insufficient resources, trust without references
- For corporates – not-invented-here problem, managerial support, soloed approach, understanding change
Best practices
- Making sure process is as simple as possible
- Clear entry process for startups to work with corporate
- Relaxed KPIs – hard for small organizations to track KPIs as well as large ones
- Involving top management in collaboration with startups