Working with startups and entrepreneurs is a critical component of a portfolio approach to innovation.

Startups have technologies, talent and capabilities that corporations typically don’t. Partnering with startups can help corporate teams get further faster. Whether it’s to support growth of the core business or to branch into adjacent businesses, an organization’s ability to partner externally is imperative for long term health of the business.

We sat down with Carie Davis and Shane Reiser from Your Ideas Are Terrible, to get a taster for their workshop during #IntraCnf Silicon Valley.

It seems every corporate is keen on “dating” startups. Should we take this serious, or will it pass – and why?

As a normal part of doing business, corporations have always looked externally for partnerships with companies and suppliers to provide products or services they can’t create on their own. Universities, inventors, consultants, and now, startups, a relatively new avenue with the advent of high growth tech companies.

All of these paths can be valid within a portfolio approach. When done well, startups provide a product or service that corporations can apply to core business needs or combine with existing capabilities to move into new markets faster.

We should take it seriously. As new technologies threaten to disrupt every industry at a faster rate than ever before, corporations must explore every option to remain competitive.

In your experience, how can this dating grow into a fruitful relationship?

The goals of that dating discussion should be known. Talking to startups is more productive if the corporate innovator has a business objective in mind or can allow the startups to ask questions.

I like the dating analogy because it can help us illustrate exactly what not to do.

A startup arriving at a first meeting and talking at length, with a powerpoint and/or demo, about themselves and how awesome they are without asking one thing about the business challenge is probably not the start of a good relationship.

The corporation agreeing to meet without having any idea of what they would be looking for or if they are actually in the position to continue the relationship is also a bad start and why many of these “dates” don’t go very well.

The best way to make these conversations fruitful is a few things:

  • Customer Development Skills: As a startup, know how to ask the right questions of the corporate business leader. Stop pitching!
  • Startup Killers: Corporate innovators should put systems and processes in place that enable collaboration with startups as opposed to hindering it.
  • It’s not you, it’s me: For a startup, being strung along by the promise of a deal is treacherous. Get good at sharing specific business challenges and asking questions of startups to  understand if they can solve your challenge. If not, tell them no and move along.
  • Relationship Goals: Avoid vanity pilots by defining clear metrics for success and clear next steps based on data.

Once these techniques are practiced, It can happen many ways – investment, acquisition, joint venture – but small pilots or customer agreements are usually the best first step.

Tell us about your approach and the results it got at Coca Cola?

The Bridge by Coca-Cola was designed to help Coke gain first mover advantage through implementation of new technologies to solve core business challenges through engagement with startups.

The Bridge is fundamentally an educational program aimed at helping startups and corporations work together. Once a cohort of startups is chosen based on focus areas defined by the corporations, both sides are given foundational knowledge to help avoid the typical stumbling blocks.

Startups learn techniques for talking to enterprise customers, storytelling and negotiation and corporations learn how to overcome internal legal, compliance, IT and procurement obstacles.

What’s different with other approaches?

It’s a program that helps in the engagement process. Where matchmaking and dating is the first and only step in many programs, The Bridge is a program designed to provide tools and training on both sides of the table to help deals happen after the match is made (and the honeymoon is over)

Another difference is no exchange of equity as a part of the program, no funding is given just for getting accepted as a startup. The goals are different – there is more of a focus on how the corporation can be a customer of the startup. Equity conversations tend to make negotiations much more difficult, slowing down the process.

There is also a timeline for the program. It creates a sense of urgency to make things happen faster.

Finally, there is a legitimized set of startups that are brought into the corporations. As a former corporate employee with innovation in my title, I received many unsolicited pitches from startups and it was difficult to focus.

The Bridge is a curated set of startups that have been selected for fit, progress and temperament and have been exposed to training to make the engagement more productive, so startups and corporate innovators speak the same language and can be more productive.

What’s next for corporate innovation?

The trend of needing to do more with less will continue, and this means getting better at finding and becoming a customer of startups.

One of the biggest challenges we hear is that things move too slowly, and learning how to work with fast moving organizations can help to mitigate that.

Another challenge we frequently hear is that people are working on ideas that they know are not a great use of time. The organizations who are able to apply the entrepreneurial mindset to corporate initiatives to reduce waste, focus on customers and get products to market that solve real needs will be leaders.

We also see the focus shifting back to horizon 1 and 2 innovation, doing what you do better or using the assets you have to move into adjacent markets. Many organizations still find this difficult, so creating teams and strategies to address horizon 3 is not useful.

Finally, we hope that the role of planning and incentives evolves. The model of getting a yearly list of objectives that must be delivered to meet goals and receive bonuses or high performance ratings needs to change.

This systems exacerbates the waste in innovation by setting up projects and teams who are not permitted to unearth data that conflicts with the stated goal, thereby creating products that aren’t right for the market but deliver on the company objectives. We need teams to focus on learning and optimizing for true demand in the market.

shane-reiser-intrapreneurshipcarie-davis-startup-innovationDuring their workshop as part of Intrapreneurship Conference Silicon Valley, Shane & Carie will share the lessons they’ve learned running The Bridge (check their session here). They’ll help you diagnose your company’s ability to successfully partner with startups and leave you with tools you can use right away to succeed in these kinds of partnerships.