New startups are sprouting up every day, bringing new value to the market and disrupting the status quo with innovative ideas, new technologies and novel business models.
In response, companies all over the world are partnering with external startups as a way to tap into disruptive ideas, innovative business models, and cutting-edge technologies - all with unprecedented speed and reduced risk. By making corporate venturing a central part of their innovation strategy, these companies are merging the best of both worlds:
- The vast resources and reach of the parent company
- The nimbleness, innovation and speed of startups
Startup scouting is a critical component in the process, enabling you to spot, attract and engage with cutting-edge startups that align with your organisation's long-term growth goals and vision.
To give you a better idea of you can start sourcing new startups to boost your corporate innovation strategy, we’ve listed some of the most effective startup scouting techniques below.
But first, let’s kick things off with a bit of context.
What is startup scouting?
Startup scouting involves actively seeking out and connecting with emerging startups to identify potential strategic partnerships, investment opportunities, and technologies that align with your company's growth and innovation objectives. Although the process differs somewhat from company to company, in general, it includes evaluating a startup's:
- Product offerings
- Technological capabilities
- Business model
- Market potential
The goal? To assess the startup’s overall strategic fit with your organisation's corporate goals, mission and vision. Effective startup scouting can lead to valuable collaborations that drive innovation, foster growth, and create a sustainable competitive advantage.
Now that we’ve covered some of the startup scouting basics lets dive into the eight startup techniques you can use to boost your corporate venturing strategy.
1. Attend networking events and conferences
Attending industry-specific networking events and conferences can help you discover promising startups and establish valuable connections with founders, investors, and other stakeholders. These events also provide the opportunity for you to gain insights into emerging trends in your desired industry or growth segment, enabling you to better understand and target potential collaboration opportunities.
The type of networking events and conferences will vary depending on your goals, industry and target value space, but to give you a general idea, here are some examples of our favourites:
- Web Summit: One of the largest global tech conferences, bringing together founders, tech CEOs, thought leaders and policymakers to discuss the latest tech trends, innovations and opportunities.
- TechCrunch Disrupt: An annual event that showcases some of the most promising startups in AI, SAAS, fintech and more - from around the world. A highlight is the Startup Battlefield competition, where startups pitch their ideas for a chance to win a $100K equity-free prize.
- Slush: One of Europe's leading startup events, attracting thousands of founders, investors, and tech enthusiasts. The event focuses on helping startups scale with various networking opportunities, workshops, and keynote speeches.
2. Partner with startup incubators and accelerators
Partnering with startup incubators and accelerators is an effective way to gain access to a curated pool of innovative startups within your desired industry or growth space. Many of these programs offer exclusive events and demo days, providing an opportunity for you to evaluate startups and establish connections with their founders.
Here are a few examples of top incubator and accelerator programs:
- Y Combinator: With a portfolio of companies like Airbnb, Dropbox, Reddit and more, Y Combinator is one of the most renowned startup accelerators in the world. Their programs end with Demo Days, where startups present their progress to potential investors and partners.
- Techstars: Offers industry-specific programs and partners with large corporations like ABN AMRO, Comcast and J.P. Morgan to turn cutting-edge ideas into thriving businesses.
- Plug and Play: A global platform that connects startups with corporations and investors. They offer industry-specific accelerator programs, enabling startups to collaborate with corporate partners and access resources tailored to their unique needs.
Choose which type of program to partner with based on your goals, your industry and the startup stage you’re looking to work with. For example, if you want to partner with pre-MVP startups, then incubator programs are a good choice. On the other hand, if you want to work with post-MVP startups that are ready to scale, accelerator programs are the better call.
3. Use online startup directories and databases
Startup databases like Crunchbase, AngelList, Pitchbook and F6S can be veritable treasure troves with valuable information to help you find potential startup partners. These platforms feature thousands of registered companies, which can make the search for an ideal partner challenging. However, by utilising various filters, you can refine your search based on:
- Funding stage
- Technology focus
and other relevant criteria. While it's unlikely that you'll immediately identify the right partner, these platforms serve as an excellent starting point for your search, enabling you to create a list of potential candidates.
Furthermore, regularly monitoring these online directories and databases is a good way to stay updated on the latest startups, funding rounds, and industry trends.
4. Leverage social media and online communities
Monitor social media platforms, like LinkedIn and Twitter, as well as online communities, like Reddit and Quora, to identify trending startups and gather insights from the startup ecosystem. Engage with thought leaders and influencers to expand your network and knowledge.
Social media platforms and online communities can be powerful tools to help you learn more about your target startup ecosystem as well as find potential startup partners. By monitoring platforms like LinkedIn and Twitter, as well as communities such as Reddit and Quora, you can stay informed about the latest developments in your industry and learn about up-and-coming startups within your value space.
Here are a few tips to help focus your efforts:
- Use platforms like LinkedIn and Twitter to follow relevant thought leaders and stay up to date on the latest trends and promising startups in your industry.
- Join relevant LinkedIn groups or Twitter lists to connect with founders and entrepreneurs in your growth space.
- Monitor and participate in discussions, forums, and communities like Reddit and Quora, where you can ask questions and gather insights.
- Following industry-specific hashtags and popular startup events to learn more about the industry insights and experiences of both participants and attendees.
Actively engaging in social media and online communities can give you a better grasp of your specific growth space and ultimately get you closer to the startup partner you’re looking for.
5. Collaborate with universities and academic Institutes
Partnering with universities and academic institutes in your industry or growth space is a great way to gain access to cutting-edge research, technologies, and potential spin-off companies. These partnerships can provide a pipeline of innovative startups for potential collaborations and enable you to stay at the forefront of your industry by tapping into emerging talent and new ideas.
Many leading universities have developed programs aimed at fostering these types of partnerships, for example:
- MIT's The Engine: A startup accelerator and venture fund that supports startups focusing on breakthrough technologies.
- Stanford University's StartX: A non-profit program that supports Stanford-affiliated entrepreneurs.
- Cambridge University’s Cambridge Enterprise: The university’s commercial arm, focused on turning research and ideas into successful businesses.
6. Research your market and competitive landscape
Deep diving into your competitive landscape is a good way to gain inspiration and insights about the types of partnerships that will best help you reach your goals. Research and analyse hero cases and success stories in your target growth space and even adjacent industries to learn from successes and failures.
Here are a few tips to help jumpstart your research:
- Create a list that includes direct and indirect competitors (e.g. within your industry and adjacent ones).
- Track relevant investments, acquisitions, and startup partnerships through articles and press releases.
- Identify startup activity trends and patterns from your direct and indirect competitors. What industries, technologies, and startup development stages are they focusing on? What works and what doesn’t?
- Use industry reports, analyst insights, and data-driven platforms to gain a comprehensive understanding of the startup landscape in your industry.
7. Organise or participate in open innovation challenges
Open innovation challenges like hackathons and pitch competitions are a highly effective way to attract and assess potential startup partners. These types of events and challenges serve as platforms for creative problem-solving and collaboration, allowing you to tap into a diverse pool of talent and ideas.
Aside from putting you in direct contact with potential partners, potential benefits include:
- New ideas: Challenges encourage startups to develop novel solutions to specific problems - enabling you to explore new opportunities and possibilities in your space.
- Assessment opportunities: Challenges enable you to assess the technical capabilities, business model, and problem-solving skills of potential partners.
- Brand image: Organising and sponsoring challenges shows your commitment to innovation, boosting your brand image and attracting new startups for possible collaboration.
- A wider net: Challenges usually focus on solving a problem, bringing together solutions from different industries and perspectives.
8. Partner with a venture development firm
Venture development firms, aka venture studios or venture builders, specialise in building ventures from scratch. Unlike traditional incubators or accelerators, they take a more hands-on approach to venture building, with blended, multidisciplinary teams of experienced entrepreneurs, designers, content creators, marketers and growth marketers working together to ideate cutting-edge business ideas and turn them into profitable businesses.
These firms often have extensive networks and expertise in identifying high-potential startups. They can serve as a valuable source of information and introductions to exciting investment opportunities. Partnering with them enables you to access and tap into their extensive deal flow and network.
These are just a few of the potential benefits:
- Access to curated startups: Venture builders work with high-potential startups every day, providing you with a curated selection of investment opportunities.
- Expert guidance: With their experienced teams and industry insights, these firms provide valuable guidance on the startup landscape and help you make informed decisions.
- Collaborative approach: Venture development firms work closely with startups, providing you with the opportunity for hands-on collaboration and close relationships.
- Industry knowledge: Venture builders have deep expertise in specific industries, enabling you to tap into their knowledge and gain insights into emerging trends and technologies.
These eight startup scouting techniques are a great way to tap into the external startup ecosystem, but they’re just the tip of the iceberg when it comes to successful startup scouting. Finding and building the right partnerships is a time-consuming and ongoing process that requires dedication, persistence, and adaptability.
Also, make sure your efforts are aligned with your organisation's long-term goals and vision, as well as the challenges and opportunities within your industry. This will enable you to better identify startups that can truly accelerate your growth goals and targets.
Looking to attract and engage with cutting-edge startups that align with your organisation's long-term growth goals and vision? We can help you tap into the external startup ecosystem, build strategic partnerships, and unlock new opportunities for growth through collaboration.