November 7, 2016

From ladders to escalators – start-ups and large companies seeking mutual benefit 1/2

Jan Ameri

Chief Innovation Officer, ArcticStartup

Around 15 years ago, talk began of actively open innovation, and today more than 50 percent of Fortune 500 companies work actively together with start-ups in one way or another. Systematic co-operation through various kinds of programs has been more prominent during the last five years.

The actual flurry has been seen in the Nordic countries during the last few years, but it can be said that we’re still in the very early stages in these things.

The trend is clearly on the rise at ours as well, and I believe that it will rapidly become a significant part of the development operations of companies, as long as more working models and examples are found. Each large company should think seriously about continuous renewal and in addition to other measures, start-up co-operation offers tools to help in this.

Striving for mutual benefit

Start-ups are good at creating and quickly trying out new business models, whereas large companies are good at scaling them more in a larger sense with existing resources, processes and customer channels. For a start-up the possibility to get to pilot, and for a large company the possibility to outsource a part of its innovation operations cost-effectively, are significant factors. 

The motive of large companies is often also renewing the company culture, so that its own employees are trained to become more daring generators of ideas and it becomes a tempting environment for the best talents in the field.

There are many forms of co-operation. Large companies take part in start-up events or become partners in existing incubator or accelerator programs or create them themselves. They can also create innovation competitions or arrange hackathons and make marketing or distribution contracts.

Provision of free or cheap business premises alongside large companies has also been seen already in Finland as well. In addition, some make direct investments in start-ups. I wouldn’t consider company acquisitions to be an example of co-operation any more, but those happen in increasing amounts too.

Indeed, the big question is how to get different kinds of company cultures and operating methods melded together so that both parties stay in their right minds.

What kind of project has succeeded?

The kind where the objectives have been created together and which leaves the start-up as free rein as possible to continue developing its own thing. The kind that involves as little bureaucracy and talking with lawyers as possible. The kind in which both win when the project succeeds. The kind that doesn’t leave you feeling that the large company has somehow exploited the start-up, but instead that something good for both of them has been achieved together

The top three tips for successful co-operation

Openness, transparency and commitment on both sides.
A lighter procurement and contract procedure.
The courage to try and do things together.

Both large and small companies naturally seek growth. There is strength in co-operation but it requires concessions and an ability to adapt from both of them – from the start-up, patience and from the large company, the desire and ability to let the start-up work in the way that is characteristic of it. It is pointless to look for one-sided benefit from the ecosystem: rather, openness, honesty and the spirit of bold action are the keys to success.  

Read also Taneli Tikka's blog How a big company can innovate like a startup

- - -

We are participating in Slush 2016 with aim to boost innovation and growth together with the vibrant startup ecosystem.

Our aim is to meet the best talent in the market and also grow out ecosystem of start-ups for mutual benefit. Our booth is situated in the Northern entrance, near the pitching stage – see you there!

Check out also our Tieto Data Incubator accelerator program! The program invites innovators, teams and startups to join forces in creating this data-driven future business!

Stay up-to-date

Get all the latest blogs sent you now!