Mobile startups, with their agility and innovative mindset, often find themselves on the radar of established large companies looking to inject fresh ideas and technologies into their operations. This is where the metaphor of ‘catching a whale’ comes into play, a term used in sales to describe the moment a startup catches the interest of a large enterprise. However, I have found the excitement that comes with this opportunity can quickly turn to dismay as the complex reality of engaging with a large corporate becomes apparent.
The need for collaboration between startups and established enterprises cannot be overstated. Startups operate with a speed and flexibility that large companies often cannot match, primarily because these enterprises are optimised for growing profits and optimising existing products and services. Their structures are typically not designed to foster innovation, with slow internal processes and employee reward systems that often do not encourage it. For enterprises, the easiest route to innovation often lies in partnering with or acquiring startups, which offer fresh perspectives and rapid development cycles.
Conversely, for startups, the appeal of working with a large enterprise extends beyond the substantial financial gains. Such collaborations provide invaluable product validation and enhance their reputation in the market. However, bridging the gap between the quick-moving nature of startups and the slow pace of large enterprises is fraught with challenges.
Several real-world problems can arise when attempting to forge these business relationships. Enterprises often operate by committee, making the sales process lengthy and complex as approval is needed from multiple levels within the organisation. Startups may find themselves having to submit to rigorous requests for information, drafting extensive proposals and navigating the enterprises’ ambitious public policies and strict purchasing practices that seek to lower costs and extend payment terms. Furthermore, the requirement to conform to legacy purchasing systems and the demand for compliance with various policies, including health and safety, security and anti-bribery, can be onerous and sometimes impractical for a small startup.
The problems can also be technical. Startups often use cutting-edge technologies with their mobile app development, which may not be fully compatible with the legacy systems of an established enterprise. This discrepancy can lead to significant technical challenges and delays in integration. Large enterprises typically have stringent security protocols and compliance requirements, such as GDPR in Europe, HIPAA in the healthcare industry in the United States or other data protection laws. Startups, while nimble, may find it challenging to meet these rigorous standards without substantial adjustments to their app design and data handling practices.
A mobile app developed by a startup might work well on a small scale but may struggle to handle the increased load and demands of a large enterprise’s customer base. Startups focus on innovation, rapid growth and user engagement, while enterprises might prioritise stability, scalability and integration with existing workflows. These differing objectives can lead to misaligned expectations about the app’s development, features, and rollout strategy.
Startups often embrace agile and iterative development, expecting to pivot based on user feedback and evolving market trends. In contrast, enterprises may prefer to work with fixed roadmaps and schedules, which can restrict the flexibility startups need to innovate and refine their mobile apps. Startups may allocate their limited resources across multiple projects to maximise growth opportunities. In contrast, enterprises might expect dedicated teams and resources focused solely on their project, leading to conflicts over prioritisation and resource allocation.
To address these challenges, startups must approach potential collaborations with a plan. This includes conducting thorough prequalification to understand the enterprise’s needs and intentions, perhaps favouring work with accelerators, incubators, or innovation teams within the enterprise that can move more quickly. Ensure your policies such as QA, modern slavery, health & safety and anti-bribery are in order and readily available, ideally via a link on your web site. An initial, small-scale project can often serve as a test to gauge the enterprise’s flexibility/commitment and facilitate trust for a smoother, more productive collaboration.
Enterprises, on their part, can do much to streamline the process. Establishing dedicated innovation teams or entities, simplifying funding and purchasing processes and actively promoting and supporting internal innovation can mitigate many of the obstacles facing startups. Such measures not only benefit the startups but also enhance the enterprise’s ability to innovate and stay competitive.
In summary, while the prospect of startups and enterprises collaborating holds great promise, it is not without its challenges. Both parties must enter these relationships with open eyes, prepared to navigate the complexities of blending different cultures, speeds of operation and expectations.
