{"id":58058,"date":"2019-01-29T00:00:00","date_gmt":"2019-01-28T22:00:00","guid":{"rendered":"https:\/\/richardvanhooijdonk.com\/blog\/collaboration-between-startups-and-corporations-leads-to-better-products-and-happier-customers\/"},"modified":"2021-06-07T10:06:00","modified_gmt":"2021-06-07T08:06:00","slug":"collaboration-between-startups-and-corporations-leads-to-better-products-and-happier-customers","status":"publish","type":"post","link":"https:\/\/blog.richardvanhooijdonk.com\/en\/collaboration-between-startups-and-corporations-leads-to-better-products-and-happier-customers\/","title":{"rendered":"Collaboration between startups and corporations leads to better products and happier customers"},"content":{"rendered":"<ul class=\"bold-list\">\n<li>Corporations can teach startups a few lessons<\/li>\n<li>Startup rules that corporations should follow<\/li>\n<li>How Telef\u00f3nica embraces startups<\/li>\n<li>Collaboration leads to better products and happier customers<\/li>\n<\/ul>\n<p>Startups are often the \u2018darlings\u2019 of modern business. They&#8217;re passionate, innovative, exciting, and compete against their larger, established and often more conservative corporate counterparts. In this business version of the age-old David and Goliath story, many people gravitate towards these smaller players, and for various reasons. For instance, Accenture&#8217;s research <a href=\"https:\/\/www.accenture.com\/t20170901T080938Z__w__\/us-en\/_acnmedia\/PDF-50\/Accenture-Strategy-Workforce-Gen-Z-Rising-POV.pdf#zoom=50\">shows<\/a> that only 19 per cent of 2017 graduates in the US want to work for a large company. So it&#8217;s no wonder that startups are celebrated as role models for others to follow, and as companies where people want to work. This is, however, a rather limited view that ignores crucial facts.<\/p>\n<p>Sure, in their journey from scruffy garages to modern, flashy offices, many <a href=\"https:\/\/blog.richardvanhooijdonk.com\/en\/how-to-compete-with-corporate-giants-and-win\/\">corporations<\/a> may have turned into faceless juggernauts, interested only in their bottom line. But they\u2019ve also learnt valuable lessons along the way, something startups shouldn\u2019t forget. And of course, corporations can also learn a great deal from the good practices developed by their younger, smaller counterparts. After all, relations between these two don\u2019t have to be adversarial; they can learn important lessons from each other and create new value for customers.<\/p>\n<p>For example, startups could act more like corporations \u2013 still being disruptive, mind you, but in a more tactical way. Also, they could benefit from establishing processes that\u2019ll make their life less chaotic, help them avoid unnecessary risks, and make them pay more attention to HR policies. Corporations could improve tons if they made decisions faster, and, like startups, perceived failures as learning opportunities instead of incompetence. Rather than ignoring or battling startups, corporations should embrace them and provide funds and guidance so that young entrepreneurs make less costly mistakes.<\/p>\n<h2>Corporations can teach startups a few lessons<\/h2>\n<p>One of the mistakes startups tend to make is to suddenly introduce dramatic changes to employees and customers. Although their mission is to disrupt the status quo, startups need to draw lessons from corporations that realise that people don\u2019t always respond well to abrupt changes in their lives but prefer gradual improvements. So, instead of hastily revolutionising your product or introducing new software to employees, do it gradually, so as to avoid turning people against your idea.<\/p>\n<p>But companies won\u2019t be able to do any of this without capable employees. That\u2019s why corporations put in a lot of energy to hire only the best people. And finding the right employees is even more important for a small startup. The wrong person can delay projects for months, while the right one can make the difference between success and failure. But with proper procedures in place, hiring staff and many others tasks can become efficient processes. And although startups like to be flexible, some corporate rules and procedures can be beneficial. As Universal Stream Solution\u2019s Jignesh Vaghasiya<a href=\"https:\/\/www.universalstreamsolution.com\/blog\/5-things-startups-can-learn-from-big-companies-in-2018\/\"> says<\/a>, procedures \u201cestablish patterns of working and help you develop your business in an organized, strategic way\u201d.<\/p>\n<figure id=\"attachment_2549\" aria-describedby=\"caption-attachment-2549\" style=\"width: 800px\" class=\"wp-caption aligncenter\"><img fetchpriority=\"high\" decoding=\"async\" class=\"wp-image-2549 size-full\" src=\"https:\/\/blog.richardvanhooijdonk.com\/wp-content\/uploads\/sites\/4\/2019\/05\/startup.jpg\" alt=\"Two men and a woman having a meeting with laptop\" width=\"800\" height=\"534\" \/><figcaption id=\"caption-attachment-2549\" class=\"wp-caption-text\">One of the mistakes startups tend to make is to suddenly introduce dramatic changes to employees and customers.<\/figcaption><\/figure>\n<p>Another trait of corporations is that they\u2019re risk-averse when it comes to investments and new projects. While working and innovating too slowly isn\u2019t adviseable, startups should try to avoid reckless risk-taking. Many of them have limited resources and a single mistake can be fatal. When mistakes do happen, it\u2019s important to act like corporations do and carefully analyse what went wrong.<\/p>\n<p>Finally, both small and big companies must ensure that making money isn\u2019t their only priority. The best way to do this is by introducing corporate social responsibility programmes that are focused, for instance, on helping people in need, cleaning up rivers and lakes, or helping local schools. This will give employees a sense of higher purpose and the feeling that they\u2019re engaging in meaningful work.<\/p>\n<h2>Startup rules that corporations should follow<\/h2>\n<p>Another way to make people feel their work is meaningful is by creating an open work environment, where they\u2019re free to voice their opinion and exchange ideas with coworkers and superiors alike. Startups tend to provide such an environment whereas corporations are usually hierarchical with more rigid <a href=\"https:\/\/blog.richardvanhooijdonk.com\/en\/a-strong-company-culture-is-what-makes-startups-great\/\">company cultures<\/a>. This type of environment prevents employees from innovating since failure could be seen as a lack of competency. But the reality is that failure is a critical part of the learning process, and it\u2019s important for corporations to be more open to that concept. As Mario Bartels, a consultant at the strategy firm Vivaldi, <a href=\"https:\/\/www.forbes.com\/sites\/kateharrison\/2018\/03\/20\/3-lessons-big-brands-can-learn-from-disruptive-startups\/#2d10cc5062b8\">explains<\/a>, \u201cembracing experimentation for big brands means fostering a shift in mindset to accept failure as what it is: a chance to improve.\u201d<\/p>\n<p><iframe title=\"#1 Reason why startups succeed | Bill Gross (TED Talk Summary)\" width=\"800\" height=\"450\" src=\"https:\/\/www.youtube.com\/embed\/RCa_gj8J-JM?feature=oembed\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture\" allowfullscreen><\/iframe><\/p>\n<p>Besides accepting failure as part of the process of learning and improving, the ability to make decisions on the fly is another critical factor that helps startups to grow. Corporations are notorious for just the opposite \u2013 their slow and arduous decision-making processes that demotivate their staff and prevent them from seizing market opportunities. They need to realise that cutting the red tape and making decisions faster will benefit them in many ways.<\/p>\n<p>Listening to customers is another area in which corporations could do with some improvement, and startups are great examples of how to go about this. While focus groups, big data, and market research are useful tools, nothing beats the effectiveness of startups when it comes to speaking to customers directly and intimately understanding their pain points. As Vivaldi <a href=\"https:\/\/www.forbes.com\/sites\/kateharrison\/2018\/03\/20\/3-lessons-big-brands-can-learn-from-disruptive-startups\/#2d10cc5062b8\">argues<\/a>, \u201chaving firsthand interactions with customers \u2026 is valuable to build an intuitive understanding of behaviour. While big data is great, getting lost in the numbers can sometimes lead to big brands forgetting to truly understand their customers.\u201d And one of the corporations that looks to startups to gain an understanding of its customers is the Spanish telecommunication giant Telef\u00f3nica.<\/p>\n<h2>How Telef\u00f3nica embraces startups<\/h2>\n<p>This company launched the startup accelerator Wayra in 2011 through which it funded 800 startups with $160 million. The project has proven hugely successful with entrepreneurs developing hundreds of services and apps, many of which are used by Telef\u00f3nica to improve its operations, analyse customers, and boost sales. Miguel Arias, who manages Wayra, shared some of the lessons he\u2019s learned along the way. He <a href=\"https:\/\/www.forbes.com\/sites\/alejandrocremades\/2018\/09\/20\/6-lessons-learned-from-investing-in-800-startups\/#34e8c3c5d27e\">notes<\/a> that \u201cperpetual reinvention is needed for big corporations to survive.\u201d At the same time, startups and corporations must think big &#8211; think global &#8211; instead of merely focusing on local markets. And for large corporations and small startups to work together successfully, they need to possess a willingness to change. Corporations must learn to \u201clive with failure&#8230; so that they can find those new companies who will transform markets,\u201d Arias <a href=\"https:\/\/www.forbes.com\/sites\/alejandrocremades\/2018\/09\/20\/6-lessons-learned-from-investing-in-800-startups\/#34e8c3c5d27e\">argues<\/a>. Lastly, he boasts that Wayra made the Spanish corporation more entrepreneurial and ready to bet on startups.<\/p>\n<h2>Collaboration leads to better products and happier customers<\/h2>\n<p>Competition between corporations and startups is one of the hallmarks of modern business. Small startups take on big competitors and many people instinctively support and celebrate these \u2018underdogs\u2019 and consider them as role models. But while large corporations \u2013 in comparison \u2013 are usually less popular, they, too, have invaluable business lessons to share. At the end of the day, it\u2019s the willingness to engage with and learn from one another that will lead to better products, fewer mistakes, and happier customers.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Corporations can teach startups a few lessons Startup rules that corporations should follow How Telef\u00f3nica embraces startups Collaboration leads to better products and happier customers Startups are often the \u2018darlings\u2019 of modern business. They&#8217;re passionate, innovative, exciting, and compete against their larger, established and often more conservative corporate counterparts. In this business version of the [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":51240,"parent":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_coblocks_attr":"","_coblocks_dimensions":"","_coblocks_responsive_height":"","_coblocks_accordion_ie_support":"","footnotes":""},"categories":[2876],"tags":[4493,4997,4609],"article-type":[],"trends":[],"class_list":["post-58058","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-management-en","tag-corporations","tag-modern-business","tag-startups-en-2"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.6 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Collaboration between startups and corporations leads to better products and happier customers - Richard van Hooijdonk Blog<\/title>\n<meta name=\"description\" content=\"Corporations and startups should work together and teach each 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