Daniel Saunders, chief executive of L Marks, corporate innovation specialists, highlights five mistakes start-ups make when working with corporates.
- Failure to listen – sometimes entrepreneurs that are determined to disrupt an industry are reluctant to accept that big businesses within that industry are still relevant and have real value to offer a start-up. Entrepreneurs can sometimes think they have all the answers and that they don’t need industry support when they have managed to raise funds elsewhere. However, failure to listen to corporates working in your industry is a mistake. Apart from anything, they know the customer best.
- Reluctance to adapt – working with a large corporate requires a start-up to adapt and sometimes pivot its service offering. Reluctance to do this will mean that it might lose that big-ticket customer. It’s inevitable that a start-up’s processes won’t match up perfectly with that of a corporate partner and it’s often a lot easier for the start-up to adapt its processes than the larger company. Being able to hustle is important and making changes to products or services might mean that it varies somewhat from your initial vision but is ultimately more successful.
- Being too focused on fundraising – fundraising is undoubtedly one of the most important things a start-up will do, but working with corporates shouldn’t be viewed just as a way to demonstrate traction to potential investors. Generating revenue is as equally important to fundraising and can mean that, if you’re successful enough, fundraising isn’t necessary. Look at working with corporates as a valid way to gain revenue through contracts, rather than just a strategic tool to gain funding.
- Being inflexible – it’s understandable that a start-up will be protective of their idea and vision, but sometimes they can be too precious about it and not accept help or constructive criticism that might be vital to success. Start-ups need to be able to accept that the way they want to run their business or build their product might not work and that’s fine – be open to suggestions about how to do things differently.
- Not thinking about promotion – start-ups get caught up with delivering a product or service for a corporate without thinking about how they want to record the work they’ve done or how to produce content around this. Videoing trials or pilots, blogging about experiences or even just remembering to take photos are really easy ways to document the work a start-up is doing. This kind of content is crucial to building up case studies to demonstrate what a start-up has achieved for future customers or investors, but it so often falls to the bottom of the priority list when delivering a project.
L Marks is an early stage investor and works with some of the world’s best-known brands, including BMW Group UK, Arsenal FC and EDF Energy to create bespoke partnerships for innovation.
For more information visit https://lmarks.com/