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Why Isn't Every Corporation And Startup Collaboration Successful

By Shivam Singh |27th Apr 2020
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The topic of open innovations is of interest to more and more corporations and an even larger group of startups ready to cooperate with large players. Free exchange of knowledge and resources allows the faster introduction of innovations to the market, and at the same time proves that startups do not have to compete with corporations. They can cooperate and succeed together, but it is not always so colorful. There can be many reasons for failure at every stage of cooperation, so below only selected ones.


1. The Startup Does Not Deliver


It is revealing to say that the conditions of cooperation are met. Unfortunately, some goals prove too ambitious for a startup to achieve them, but with a global partner in mind, he promised to meet them. An unfinished, broken, and underdeveloped product within the set deadline will not convince the corporation that it is worth continuing to cooperate.


2. Procedures in the Corporation


Often, rigid procedures in the corporation are the reason for delays in implementing innovations. This is because a large company cannot afford such great flexibility as a startup. Its procedures structure the work, but they are also a reason for time shifts and the need to adapt the implemented solution to them. Unfortunately, some startups do not have enough time to go through it and the only way is for them to abandon cooperation and find another partner, because otherwise, they may fall before its finalization.


3. The Corporation Does Not Want to Invest


It happens that a startup will need additional funding to implement an innovation. If it does not find an investor from the market, it will not be able to deliver the promised product on time. A corporation could invest its capital, but it depends on its cooperation strategy and the value of a given innovation. The unwillingness to invest is often associated with risk aversion.


WHY NOT EVERY CORPORATE AND STARTUP COOPERATION FINISHES SUCCESS?


4. Misunderstandings Related to the Cooperation Model


When determining the model of cooperation between a startup and a corporation, it is worth considering the well-being of both parties and then meeting the agreed conditions. Unfortunately, developing such a model can be difficult because someone has to compromise. It is worth devoting a little more time to this and establishing the most favorable form of cooperation for both partners, and its types are really many.


5. Failure to Adapt the Startup Product to Expectations and Needs


A startup focused on its vision so much that it is not ready for pivots and adapting its product to the individual expectations and needs of the corporation. What works on a small scale will not always work in a large organization. The solution should be adapted, and the partner's experts are able to help and give their suggestions for changes so that the innovation can finally be successfully implemented. However, this will not happen if the startup is not open to introducing such improvements and is stubborn in pursuing its own goals rather than synergy of actions.


6. Lack of Understanding


Sometimes the reason for cooperation failure is simply a lack of understanding between the startup and the corporation. The reasons for this situation can be sought in the too-large requirements of a large organization for the smaller one, which does not have as much capacity and capacity as a partner, but also in a too demanding approach of a startup.


Not every cooperation between a corporation and a startup is successful, but as you can see, the blame for the failure of the transaction can be on both sides.