Discover how corporate-led startup partnerships can fuel innovation, boost growth, help you tackle uncertainty and future-proof your business in this essential guide.
For years now, cutting-edge startups have been shaping entire industries, introducing new technologies, leaner business models and out-of-the-box offerings that customers love. This isn’t just a fleeting trend; it’s a fundamental shift in how our business landscape works, where being the first to seize new growth opportunities can make or break a business.
In response, companies worldwide are partnering with external startups (e.g., through corporate accelerators like BoortmaltX) to tap into disruptive ideas, business models, and technologies - all with unprecedented speed and reduced risk. Making corporate-led startup partnerships a central part of your innovation strategy enables you to merge the best of two worlds:
The result? A thriving ecosystem that fuels innovation and future-proofs your business with a constant pipeline of products, solutions and services, enabling you to navigate even the most unpredictable of market conditions successfully.
To give you a better understanding of how corporate-led startup partnerships work in practice, we’ve created this essential guide designed to help you spot, attract and engage with cutting-edge startups that align with your organisation's growth goals and vision.
Let’s kick things off with some context.
A corporate-startup partnership is a strategic collaboration between an established corporation and an innovative, young startup. It’s a give-and-take relationship that involves pooling resources, expertise, assets, and capabilities to achieve shared business objectives (e.g. growth, new revenue sources, etc.). Each side brings valuable resources to the table:
It’s a winning combination that enables both sides to reach their specific growth goals with higher agility and less risk than they would on their own. By tapping into the external startup ecosystem, corporations can future-proof their business, diversify revenue, and stay ahead in today’s unpredictable landscape. Each new venture acts like a sounding board to validate new technologies, models, products and services fast and in small, controlled environments.
We’ve already touched on some of the advantages of corporate-led startup collaborations, but let’s take a closer look at 6 specific benefits:
Partnering with external startups enables corporations to explore uncharted territories and expand business activities beyond core domains. Startups are often at the forefront of emerging trends and market opportunities, and corporations can tap into this knowledge and leverage it to diversify their portfolios, gain a competitive edge and create new revenue.
Partnering with startups allows corporations to leverage their agility and entrepreneurial mindset, enabling rapid prototyping and testing of new ideas. This can expedite product development cycles, leading to faster time-to-market and fostering a continuous stream of innovative offerings.
Collaborations with startups can transform a corporation's industry expertise into innovative products or services. This co-creation can lead to a more diversified portfolio, new revenue streams and overall growth.
Startups are small, nimble and agile, allowing them to test and iterate new products or business models quickly. Corporations can leverage this lean approach to explore new markets or business models with higher speed and less risk.
Collaborating with startups can encourage an entrepreneurial mindset among employees, helping to break down traditional corporate hierarchies and fostering an environment that values experimentation, innovation, and risk-taking.
Collaborating with startups creates opportunities for corporate employees to engage in groundbreaking projects (e.g. launching a new offering, leveraging a new technology, etc.). This environment attracts and encourages talent with an entrepreneurial mindset.
Our corporate landscape is moving faster than ever, driven by a variety of factors, including disruptive technologies, economic fluctuations, shifting customer demand, new market entrants and regulatory variations. The result? A highly uncertain market.
By strategically investing in and partnering with new startups, companies can quickly gain access to new technologies, capabilities, and markets, making it easier to adapt, compete and thrive. Let’s take a look and how corporate-led startup partnerships can help you navigate each of the uncertainty drivers mentioned above:
The surge of disruptive technologies like AI, the metaverse, and blockchain has significantly transformed the way we live and work. By partnering with startups that either pioneer these technologies or leverage them in innovative ways, companies can stay ahead of the curve, effectively harnessing the power of disruptive technologies to remain competitive and capitalise on new market opportunities.
Economic fluctuations caused by inflation decreased stock prices, and the threat of recession can significantly impact a company’s bottom line, leading to increased costs, decreased purchasing power, and eventually reduced profits.
Partnering with startups can be a powerful strategy for companies to overcome these challenges, enabling them to:
Customer demand is constantly evolving, and it’s never been more palpable than in recent years, spurred by the pandemic, new technologies, cultural shifts and new market entrants, causing shifts in the preference of products and services.
In order to survive, companies need to adapt fast and meet evolving needs. This can mean changing supply chain strategies, boosting customer experience or even pivoting to a completely new business model. Corporate-led startup partnerships can facilitate the change in a relatively low-cost and low-risk way.
New market entrants and cross-over players (e.g. Amazon entering the healthcare industry) can disrupt established businesses and threaten their market share. Partnering with external startups enables companies to turn these challenges into opportunities, providing access to new revenue sources, technologies, business models and markets. All in a fraction of the time it would take to build these capabilities internally.
Changing laws or government policies can create significant challenges for businesses, including:
Engaging in multiple startup partnerships can help companies mitigate these challenges by spreading the risk across a range of ventures. If one slows down due to regulatory shifts, you can lean on the others and avoid a total shutdown.
AI is revolutionising the way businesses operate, streamlining processes, optimising decision-making, and enhancing customer experiences. In fact, according to Gartner, by 2025, AI will be producing around:
The source of all the disruption? Cutting-edge AI startups like OpenAI, Databricks and Shield AI, among many others. So it’s not surprising that corporate collaborations with AI startups have exploded over the past few years - opening up a wealth of opportunities for both parties. Here are just a few of the ways AI is boosting corporate-startup collaboration:
These collaborations enable the use of AI algorithms to analyse extensive data from diverse sources, uncovering trends and patterns that can guide crucial business decisions.
AI algorithms can also be used to optimise business processes, from supply chain to logistics to customer service and beyond. By automating routine tasks and leveraging machine learning to make real-time decisions, businesses can improve efficiency and reduce costs.
AI-powered collaboration tools can facilitate real-time communication between corporates and startups, enabling stakeholders to share ideas, feedback, and insights more effectively.
AI can help corporations and startups capitalise on new market opportunities by analysing customer data and identifying trends that can inform product development and marketing strategies.
There are various types of corporate-startup collaboration models, ranging from traditional approaches like accelerators and CVCs to more innovative approaches like sandboxing and subscription models. Here are just a few examples of how you can tackle corporate-led startup partnerships:
Accelerators offer startups mentorship, business support, funding, and they facilitate connections with investors and business partners. They're a great way for startups with a promising MVP to rapidly scale growth.
Example: Disney Accelerator
Launched in 2014, the program focuses on nurturing innovative startups in the media, entertainment, and technology sectors. Selected startups receive mentorship, resources, and investment from Disney, as well as access to Disney's networks, creative leaders and experts.
Venture client units enable corporations to become early adopters of a startup’s product or service (before it reaches market maturity), feeding its growth and enabling it to improve its offering by providing valuable user feedback.
Example: BMW Startup Garage
BMW Startup Garage is BMW Group’s own venture client unit, credited with creating the model. It acts as a matchmaker, assessing the innovation needs of different BMW business units and finding the right startup partners to provide solutions.
Smart CVC units invest in startups to gain financial returns and foster growth beyond the parent company’s core business. The main strategic goal is to take an equity stake in startups with new technologies or business models and leverage them to enter new markets.
Example: Porsche Venture
Porsche Ventures partners with and invests in startups that are still in their early growth stages, providing them with access to a broader corporate network, industry expertise and collaboration opportunities within the global Porsche ecosystem.
Sandboxing enables startups to develop or test their product or service in a real-world setting (i.e. sandbox) and have it “in operation” while still allowing for validation and pivots. The corporate facilitates the process by providing infrastructure, expert coaches, and access to its corporate network. This type of collaboration also creates the possibility for a commercial deal between the two parties later on.
Example: IKEA Bootcamp
The IKEA Bootcamp program offers the opportunity for startups to work closely with IKEA, co-creating and testing their solutions in a real-world environment and potentially integrating their products and services into IKEA's existing offerings.
Hybrid venturing hubs combine the assets of innovation tools like CVCs, accelerators, venture builders, etc., into one vehicle for growth. They tailor their approach (e.g. build, partner, invest) to the needs and requirements of each case, the segment they want to enter and the available opportunities.
Example: LG NOVA
LG NOVA fuels innovation at LG by creating, nurturing and growing new businesses. To achieve this goal, it leverages LG’s global innovation ecosystem, strategic partnerships, investment teams and industry collaborations to help ventures thrive.
We’ve already touched on what a corporate accelerator is above, but let’s take a closer look at how they work and create value.
In a nutshell, corporate accelerators enable companies to tap into the external startup ecosystem to boost internal innovation through partnerships and collaborations. Unlike incubators, which turn ideas into businesses, accelerators are the next step in the process, helping young companies expedite their growth and scale their existing business models.
While acceleration programs vary from company to company, in most cases, they support startups by providing them with access to mentoring, expertise, networking opportunities, and funding - all crucial resources to help expedite the scaling process. In addition, accelerator programs tend to:
Here are some of the benefits of building your own corporate accelerator:
They facilitate the discovery and expansion into new markets
Startups operate at the forefront of emerging trends and consumer preferences. Corporations can tap into this knowledge and leverage it to gain a competitive edge and create new revenue.
They fast-track your time to market and reduce risk
Startups are nimble and agile, allowing them to test and iterate new products or business models quickly. Corporations can leverage this lean approach to explore new markets or business models with reduced risk.
They help create and nurture a pipeline of cutting-edge ventures
Startups have the capacity to quickly prototype and test new concepts, enabling them to outpace traditional corporate product development processes. This rapid innovation cycle can fuel a constant pipeline of cutting-edge offerings for the parent company.
They help you capitalise on existing assets and expertise
By collaborating with startups, corporations can leverage their existing assets to co-create innovative solutions that can lead to new growth and revenue.
They foster an entrepreneurial mindset within the corporation
The disruptive nature of startups can challenge conventional corporate norms, inspiring employees to push boundaries and embrace risk. This interaction can stimulate a more innovative, entrepreneurial culture within the corporation.
To give you a better idea of how corporate accelerators work in practice, we’ve highlighted 2 real-world examples below:
Headquarters: Madrid, Spain
Industry: Mobility, sustainability
Activities: Acceleration and investments
Toyota Startup Accelerator is a 6-month acceleration program run in partnership with ISDI Accelerator. The program is designed to support and grow early-stage startups in four key areas:
Qualified startups get access to funding, mentorship, Toyota’s vast network, and other resources including:
Participating startups also have the opportunity to showcase their solutions at a demo day at the end of the program, and pitch their offerings in front of top investors, media outlets, Toyota and ISDI executives.
Headquarters: Minnesota, USA
Industry: Retail, consumer goods
Activities: Acceleration, investments, incubation
The Target Accelerator Program is a retail think-tank aimed at supporting early-stage startups working on innovative retail and consumer solutions. It offers two different program categories:
Participants benefit from mentorship, technical assistance, and business development opportunities, including introductions to potential customers and partners. Here’s how it works:
Aside from the benefits mentioned above, chosen startups also benefit from access to Target's resources and expertise, as well as opportunities to pilot and scale solutions within Target stores and digital platforms.
The first step to ensuring successful partnerships is knowing the value spaces you want to play in. It’s a crucial first step because it enables you to set specific goals, effectively leverage your corporate assets and identify the right partners to help you achieve your vision.
To help guide you through the process, we’ve created a 5-step process to find your innovation bricks. Innovation bricks are new or even existing capabilities you build within your company, enabling you to identify and expand into new value spaces. They facilitate core, adjacent and radical growth based on your existing corporate assets. Here’s how you do it:
Knowing the assets and capabilities you have readily available is the first and most critical step in the process. Make sure you have a clear accounting of your tapped and untapped assets - then focus on the ones that can bring the most value.
Now that you’ve mapped out your assets, it’s time to translate them into new capabilities (aka innovation bricks).
Now that you’ve identified a few new value spaces, it’s time to take a closer look at each one and identify some of the key opportunities and risks associated with each. Here are just a few examples of the questions you could ask:
The goal is to assess each market's attractiveness, so you can decide if it’s worth pursuing.
Compare each of your newly identified value spaces and prioritise them based on how well they fit your assets, budget, timeline and growth goals. It's okay to prioritise several value spaces because, in most cases, the development of a new capability or brick will require you to play in several value spaces.
Other factors to consider in the prioritisation process include potential impact, feasibility and alignment with your overall corporate strategy.
While building a new venture from scratch has plenty of benefits, when exploring new domains, strategic partnerships tend to be faster, less risky and more efficient.
Start by exploring one value space (e.g. building a prototype or MVP with your partner) to see how it performs in the market. If it turns out to be a less-than-desirable opportunity, you’ll still have some backup options that might be a better fit (e.g. hit the revenue targets you were aiming for).
Startup scouting plays a critical role in the success of your partnerships, enabling you to spot, attract and engage with cutting-edge players that align with your organisation's long-term growth goals and vision. To help guide you through the process, we’ve listed some of the most effective scouting techniques below:
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. Here are just a few of our favourites:
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. Here are a few examples of top incubator and accelerator programs:
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 enable you to refine your search based on industry, location, funding stage other relevant criteria.
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.
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 enable you to stay at the forefront of your industry by tapping into emerging talent and new ideas. Here are a few examples of programs that foster this type of collaboration:
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.
Open innovation challenges like hackathons and pitch competitions are highly effective ways 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.
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.
Another way to ensure the success of your partnerships is by identifying and establishing the right governance, funding, and legal setup—a triad that serves as the backbone of their operations:
Let's take a closer look at each one:
Establishing an effective governance structure is vital for any corporate venture. This structure should be comprised of clear roles and responsibilities for all involved, transparent communication, guided decision-making policies, and the ability to evolve over time. Typically, a well-constructed setup includes a:
In most cases, you’ll need two separate venture teams, one for the venture creation phase and one for the venture growth phase.
Choosing the right setup is critical to the success of your corporate venture. Let’s take a look at some of the potential options:
In selecting the funding setup, consider factors like strategic alignment, risk tolerance, resource availability, innovation potential, and cultural fit with the company's culture.
Finding the right legal entity setup for your corporate venture will have a crucial impact on its success and how fast it reaches profitability. With so many options to choose from (e.g. spin-off, spin-in, business unit, etc.), it can be a daunting process with no straightforward answer.
Business units, spin-offs and joint ventures tend to be the most common options for companies that want to expand past their core activities to accelerate growth.
Make sure to carefully examine the characteristics of each entity so that you can make an informed decision about which one fits your company best.
Ecosystem thinking enables companies to pool their resources and create a whole that is bigger than the sum of its parts. The key to it all? Partnerships.
The players in an ecosystem can include major organisations, small businesses and individuals, all creating value for one another in some way (e.g. producing or consuming goods that support the needs of the whole). The core strategic objective of an ecosystem is for each player
to remain motivated and aligned to a shared vision of value co-creation.
To help you start your ecosystem transformation, we created this practical 3-step ecosystem strategy:
For more detailed insights about how to leverage your partnerships to build your own corporate ecosystem, be sure to download our report Building a corporate innovation ecosystem. It includes a partnership canvas to help you design and negotiate strategic partnerships.
In today's fast-paced and increasingly uncertain landscape, staying ahead means embracing change and adapting fast. Corporate-led startup partnerships are a great way to do it, enabling you to achieve your growth goals with the speed and innovation of a startup.
So, what are you waiting for? Start your corporate-led partnerships journey today. There's a whole world of untapped potential out there—it's time to start exploring!
Want to know more about how to set up your own corporate-led startup partnerships? We can help you create a tailored strategy that leverages your unique corporate assets to fuel innovation and meet your growth goals.
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Featuring Hugo Pinto, Managing director at Accenture Digital London