6 ways startup and corporate collaborations fail after they begin: ‘The Corporate Startup’ co-author

November 17, 2017


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Startup and corporate collaborations can fail at least seven ways before they start, but there are six more ways these collaborations can fail after they’ve begun.

As Innovation Land 2017 in Medellin, Colombia winds-down Friday, we take a look at how startup and corporate collaborations can fail once they are set in motion, according to a presentation by Dan Toma, co-author of “The Corporate Startup.”

In the first part of this two-part series on Toma’s presentation, we learned about the “7 ways startup and corporate collaborations fail before they start.” Now we will continue with Toma’s discussion in the same format.

If not done properly, collaborations between startups and corporations can do more harm than good, and here are six ways in which they can fail after negotiations are finalized, according to Toma.

startup corporate collaboration fails

Dan Toma delivers his keynote address at Innovation Land 2017 in Medellin, Colombia

1) Having unclear communication channels

The Problem: Most problems start with a lack of communication. The corporate person who signs the contract isn’t necessarily the person a startup will work with.

The Solution: In many cases there are language and cultural barriers that can make collaboration difficult to nearly impossible, so make sure you know who you will be dealing with and keep the line of communication open and fluid.

2) Lacking standard operating procedures for problem-solving

The Problem: When something goes wrong, who will take care of it?

The Solution: There will always be bugs, glitches, or miscommunication across large teams, but having a capable go-to person or team that can put out fires once they start can ensure that the next time the system crashes, all the data is recoverable.

3) Not knowing about legal constraints

The Problem: Although it may seem like a small issue, this is one that can completely destroy a collaboration because when it comes to sensitive business and user data, things like server location can make or break a partnership.

The Solution: When it comes to legal constraints concerning data privacy, you should ask one simple question, “Where are your servers?” Some countries do not allow foreign client data to be stored on their servers, so this simple question can prevent a lot of headaches.

4) Having an unclear decision making process

The Problem: Oftentimes, big corporations are compartmentalized or organized hierarchically. When this happens, someone at the bottom may have a great idea, but the organization’s structure makes it difficult to reach the person in charge of decision making.

The Solution: Those at the top need to mandate decisions and implement them quickly instead of having employees going through multiple channels to turn ideas into reality. This means more openness and accessibility.

5) Being unclear about procurement and payments

The Problem: Who gets paid and when? For corporations, this may not be high on the list of importance, but for bootstrapped startups, they can go broke before they receive their first pay.

The Solution: Determine payment schedules and be sure that the startup can stay afloat during that time. Startups sometimes go four months without a paycheck, and they may have to shut down their companies because they run out of money before they even get paid.

6) Having unclear access to the customer base, brand, and channels

The Problem: Startups like partnering with big names because of the power of that brand. The Apple logo, for instance, can be worth more than the GDP of some countries, but if a startup doesn’t have access to that logo, brand, or customer base, it loses out on money and resources.

The Solution: As a startup, know what you have got yourself into. Corporate collaborations can bring you many things, but if you don’t have access to their brand or customers, you could be losing out big.

Focus on customers first before collaborating

Keeping your customer base always in mind with a focus on problem-solving and innovation should always come first before deciding on a collaboration.

Once a startup disconnects from the main vision, everything disintegrates. I asked Toma how startups can get better recognition from corporations, so that collaborations can better unfold and his wisdom cut straight to the heart of any company.

“Nothing can compete with a great product solving a big problem,” he said. PR and marketing are good tools, and going to events to network greatly helps, but at the end of the day, your startup’s solutions should speak for themselves.

Innovation Land 2017 in Medellin, Colombia was organized by ANDI, and as I mentioned in a previous article, if you ever visit the “City of Eternal Spring” and attend an event hosted by ANDI, Jonathan is the point of contact for making connections and getting things done!


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