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4 Unexpected Ways That Partnering With A Corporation Could Help Your Startup
Entrepreneurs and corporations often find themselves pitted against each other in the popular consciousness. Entrepreneurs are heralded as disruptors to the status quo, seizing opportunities nimbly from slow-moving corporations. Meanwhile, companies are positioned as behemoths ready to use influence, funding, and brand recognition to hold on to customers at any cost.
Despite these outdated stereotypes remaining pervasive, a bigger truth remains: Entrepreneurs and companies need each other to survive. In fact, startup founders frequently discover that establishing partnerships with corporations is a wise maneuver, especially at a time when the startup capital stream is slowing down.
Not long ago, The Wall Street Journal reported that second-quarter 2022 early-stage investment deals had dropped 22% in a year-over-year comparison. That translates to less seed money available for startups. It makes sense, then, for entrepreneurs to consider finding ways to collaborate with established enterprises in the hope of building rapport — while also laying the groundwork for future financial investment opportunities.
Yet money isn’t the only reason for entrepreneurs to join forces with corporations. Entrepreneurs can learn quite a bit by taking notes on what’s happening in large organizations today. The truth is, if you have big ideas for business, seeking to collaborate with larger organizations may be your best bet for success.
If you’re a startup founder, take a look at the following four potential benefits you could experience by partnering with an established organization.
Having trustworthy mentors is one of the easiest ways to find success in the corporate world. Fortunately, working with executives and thought leaders who are interested in helping you grow your products or services is a terrific way to establish mentors early on in your business journey.
BizTimes recently published a piece on a Milwaukee incubator program offered by Northwestern Mutual. The program was created to help Black entrepreneurs in the tech sector get closer to seeing their dreams become reality through relationships with area companies. The program also has a strong mentoring arm that is helping drive tangible results for participants, as evidenced by some companies raising over $500,000 in the first year.
As such, mentorship is an important benefit of partnering with a large organization. Not only will you gain insights from those with more experience, but you can also offer your assistance, such as giving insights into what’s happening in the entrepreneur scene.
Large corporations that have been around for a while tend to have good management practices and processes in place. They may lack the speed of a startup, but they can make up for it by leveraging proven repeatable systems.
Getting an insider view into how a larger business is run can serve as an informative training ground for the design of your startup as well. You may want to take notes on what seems to be working best. For example, what aspects of your corporate partner would you like to emulate? Are there any management principles that could strengthen your budding business?
You won’t like everything you see, and that’s fine. Still, you can learn a great deal from an established organization, and you will ultimately walk away with valuable concepts and ideas to use in your own business.
Going knee-deep into a foreign ecosystem can be an excellent way for you to reconfigure your own innovation methodologies. After all, both you and your corporate partner are after the same outcome: Attracting customers with your innovations. Unfortunately, if your innovation road map isn’t optimized, you could be wasting precious time.
Fred Hoch, cofounder and general partner at TechNexus, has seen how entrepreneurs can better test their assumptions and be introduced to alternative opportunities when they form partnerships with companies.
“They begin to understand the realities of the market,” Hoch explains. “By using their partnership with a corporation as something they can learn from — really digging into ways to utilize knowledge gained — these startups have been able to transform into something that’s much more valuable, both for the corporation and for the overall industry.”
In Hoch’s experience, taking this type of win-win approach can pay huge dividends. You just have to remain open-minded and be willing to pivot based on what you discover.
Maybe you’re just starting out. You might not even have an office outside the home. This puts you at a disadvantage because you have to scramble to find resources and work double to get your business off the ground.
Fortunately, attaching yourself to an enterprise gives you access to that enterprise’s resources within reason. Even if all you get is a quiet space to work, you’re ahead of the game. And you can be sure that you’ll likely get much more than that. Entrepreneurs that collaborate with corporations can even tap into resources like systems and software. This can save you a great deal of money, especially because you won’t have to cover the cost of subscriptions or equipment.
Living up to the romantic ideals of the scrappy entrepreneur who “goes it alone” can be tough. It also can be foolhardy when venture capital is running dry. Consider helping your startup in a unique way by working with a large company. You might be surprised to find just how beneficial a partnership can be for everyone involved.
The contents in this article are being provided for educational and informational purposes only. The information and comments are not the views or opinions of Union Bank, its subsidiaries or affiliates.