At Centech’s Collision Lab, we regularly support major corporations in their open innovation initiatives with startups. Through these efforts, we have identified the key factors that contribute to establishing a good collaboration with a startup and completing a project on time to achieve the expected results.
Here are 10 essential points for a successful innovation project with a startup:
1EXPECTATIONS: Have expectations that match the development stage of the startup's solution.
- The project must prove that the solution has the potential to be scaled up, but it must be borne in mind that the solution is currently NOT at scale. Accordingly, performance indicators must correspond to the solution's stage of maturity.
2PROJECT GROWTH: Favour an iterative, "small steps" approach that makes the project easier to implement.
- This can start with a technological demonstration of the prototype in a simplified environment at your company. The final adaptation of the technology to your products and environments can take place in a subsequent phase.
3PERSON IN CHARGE: Assign a person to be in charge of the project, not a committee.
- The person must have a high decision-making level within the company and be able to devote the time needed to monitor the project and promote it internally to mobilize employees. This person is the startup's gateway to the company.
4INTELLECTUAL PROPERTY
- Delineate the intellectual property that was developed by the startup prior to the collaboration (upstream intellectual property) and determine how the intellectual property resulting from the collaboration (downstream intellectual property) will be managed between the parties.
5PROCUREMENT: Your company's procurement process must adapt to the startup's reality.
- Supplier evaluation must be quick and easy. Additional checks can be added if the relationship with the startup continues.
6CONTRACT: Have a simple contract template geared to startups.
- Many startups lack the legal resources to negotiate long, complex contracts. If the relationship with the startup continues, another agreement may take shape.
7TECHNICAL SUPPORT
- Offer technical assistance to the startup to support it in carrying out the project. Business units involved in the project must enable employees to support the startup's work.
8SALES SUPPORT
- Put the startup in touch with your marketing department so that they can work out a sales strategy for the proposed solution. Larger companies can check with their customers to see if there is interest in the solution and gather their feedback. It is advisable to aim for a smaller target market or a group of customers willing to test the innovation to get their feedback before rolling it out on a larger scale.
9BUDGET
- Devote a pre-approved budget to the project, with or without subsidies such as first-time adopter grants. Dedicating too small a budget can set the project up for failure. What's more, startups need to be paid quickly, as they have very limited cash flow.
10COMMUNICATION
- At the end of the project, communicate the results throughout your company, to support the development of other potential projects.
