A healthy partnership between large corporations and startups is--and should be--a mutually beneficial arrangement favoring both sides. There is a great advantage to corporations who choose to partner and nurture startups. Not only do startups help give corporations an edge over their competition, but it also opens up new revenue streams while boosting internal creativity. Let’s take a look at some of the reason’s corporations need startups.  

Why Corporations Need Startups:

Corporations move slow, startups move fast:

Just like the laws of nature, the older and bigger you are, the slower you move. Large companies that have been chugging along for decades are bound by rigid policies, bureaucratic procedures and slow decision making. A lean startup can take an idea, test it and work out the details in a short amount of time helping you get an edge on the competition and quickly take it to market.

Startups help corporations spur innovation:

Not only can startups bring innovation to a corporation, but they also boost inspiration within. Bringing in new and different ideas helps bolster creativity among existing employees and encourages intrapreneurship. Intrapreneurship is when an employee thinks like an entrepreneur but brings their ideas to the company where they are employed rather than starting their own business. Encouraging your staff to explore ideas and be creative breaks up the mundane and makes for a happy work environment.

Startups can help corporations step into new markets:

New people and innovation can also open new doors. An agile startup that can turn quick and recognize the demands of a new market can help extend a corporation’s reach.  With quick tests and in-depth market analysis, they can also help you quickly recognize new opportunities for growth. 

A startup is customer focused:

A startup can take a pain point and move quickly to fill the void. They can also fail, adjust and recover much faster. A customer-focused startup also brings more focus to creating a better customer experience.

Startups operate at a lower cost:

Startups often operate on a shoestring. That doesn’t mean a corporation should take advantage of their talent, but it does mean that you can get a lot of bang for your buck.  Low overhead and small staff make startups affordable and lower the financial risk.  Let’s not forget a startups zeal for making their corporate client happy. There is usually a willingness to build out functions and custom features as a part of R&D. They were probably going to build that anyway, right?

Every corporation needs a startup engagement strategy to interact with their local startup ecosystem. Look at it not as your social responsibility, but a means to improve your overall business and company culture.