Study shows a desire for startups and corporates to work more together by 2025

According to a recent study by the Unilever Foundation, there is a strong desire for corporations to improve their innovation capability by working more closely with startups.

Based on the results of a recent survey of 204 corporate brand managers and 114 startups about how their companies planned to collaborate together, the following results were identified:

The report estimates that corporates and startups will form the ultimate partnership, working side by side in the same physical space by 2025, seeking greater proximity for innovation as they evolve to meet changing consumer needs.

According to Aline Santos, Unilever’s EVP for Global Marketing:

“Collaboration can no longer be viewed as an optional extra, it’s a strategic imperative. Startups are now widely recognised as invaluable sources of innovation, fueling growth and providing pioneering business solutions”.

“The State of Innovation report reveals the appetite for collaboration between corporates and startups and signals a shift in the models adopted for future partnerships. As the Unilever Foundry continues its journey looking for exciting new partnerships, we are continually learning to ensure our future collaborations are effective as possible.”

The key findings from the report also found a number of noteworthy insights

Why startups and corporations will collaborate

The three most important reasons cited for working together:

1. learning something new (startups 88%/corporates 85%)
2. improving efficiency (startups 81%/corporates 81%)
3. solving business problems in new ways that can scale (startups 89%/corporates 80%)

In fact, 90% of brand managers who have worked with startups previously would expect to work with them more frequently in the future.

There were also some very interesting insights into the challenges of beginning the collaboration. As one startup noted:

“A startup is operating very quickly, with huge amounts of uncertainty, hemorrhaging cash.

Most of the people you get contact with are the opposite.

They may be full of energy and into innovation (…) they might want to work with you but they don’t feel the same sense of urgency to get things done.”

What is interesting is that according to one of the major statistics quoted above, only 46% of startups who have not worked with corporates are likely to do so in the future.

This is less than half, and shows a lack of trust in the processes used by corporations in the eyes of the startups.

The danger of “Tech Tourism”

While there is a desire from corporations to improve their innovation capabilities, the research also seems to indicate that many believe that simply being close to the entrepreneurial spirit of startups would be enough to spark innovation into life.

See for example a quote from this one Head of Innovation:

“It’s more valuable in terms of bouncing ideas and exchanging quickly, which is useful, but it’s also more inspirational to have the startups near. […] we want to promote this entrepreneurial spirit, and we want to revive this in the company’s DNA.”

While the above statement may sound to many people like a rallying cry for innovation, in reality, it is saying something different.

It is saying: We want to promote the message that our people should think like entrepreneurs, but are not willing to change our culture to enable this

According to the Unliver report, this can be referred to as “Tech Tourism”

Tech Tourism: largely ad-hoc, exploratory activity which lacks the ability to impact core business aims. Activity can range from exploratory trips to tech HQs to engaging in ‘innovation theatre’ to manufacture instant PR gains

Here is how one startup describes their experience with corporations wanting to be involved in Tech Tourism:

“a brand shows up in Silicon Valley, rides the Google slide, meets a couple of startups – at best it’s inspirational but basically it’s a waste of time. […] Startups want meaningful new initiatives and uses of technology.”

Requirements for successful innovation collaboration

By blending the needs of both corporates and startups, the research identified four key elements that make collaboration a success in the long-term:

SENIOR BUY-IN

“One of the hardest challenges is when you have the owner of the project who is championing it, but they haven’t gotten that senior support. Ultimately there will be a breakdown.” – Head of Innovation

TRANSPARENCY AND STREAMLINED PROCESSES

“Easy contracting, straightforward procurement, ability for startup to be paid can’t be 90 days. A startup doesn’t have 90 days!” – Head of Innovation

CLEAR OBJECTIVES AND PROCESSES FOR SCALING UP

“Ability to capture and disseminate insights from the work, and then a process to make sure you can scale a pilot if it works. Time after time, pilots work but then still fall through your hands. You need the structure and linkage to senior exec leaders that can scale something.” – Head of Innovation.

EDUCATION AND LEARNINGS

“A big part of (innovation programmes) is educating on both sides education for the startup on how it is to deal with a multinational corporation as much as education for the different people in divisions within the corporation on how it is to deal with a startup.”

You can download the full State of Innovation report here.