5 ways to ensure a successful enterprise-startup partnership for innovation

Organizations are evolving and so are workplaces. With the realization dawning that employees are in fact, the very first customers of the organization, there is a perceptible shift in experiential focus.

Organizations are placing greater emphasis on every aspect of employee experience than ever before; triggering enhanced employee productivity and efficiency in the process. Every care is taken to ensure that the employee feels cared for and an important part of the organization. To ensure this, companies are directing service providers in the fields of food services, facility management, health and other related areas to deliver a complete employee experience; with a perceptible wow factor.

With a wealth of knowledge and experience already ingrained in their systems, large players in the industry are associating encouraging open innovation by joining hands with startups, to inject the already thriving ecosystem with more dynamism. This strategic partnership is the perfect answer to the continuously evolving needs of the consumer. However, although startups have the right ideas and service providers the right experience, there are constant challenges in making this association work to achieve a common outcome. Here are five such challenges that need to be overcome for both the corporate service providers and the startups to achieve a successful association.

Challenges to anticipate and to overcome

Digital adoption

Startups have distinctly innovative concepts. Proof-of-concept is usually one of the best means to ensure relevance and feasibility for the organizations. However, when large organizations that already follow their own technological protocols, it can be a big challenge to ensure seamless adoption. Meanwhile, Startups are also experimenting with latest technologies and hence have not perfected the process and they learn as they build. Both enterprise and startups need to work together in this journey for adoption and co-development for the right digital adoption.

Product market fit

Wrong choice of target customer or too small market space can lead the startup in the wrong direction and can lead to a lot of inefficiencies. While there is nothing wrong in testing the offerings with multiple segment, it may lead to a longer go-to-market timings. To ensure that the startup does not lose direction, it needs to first build its initial minimal viable product (MVP) and then move towards achieving the right product market fit. Working with an enterprise who is the part of the target segment, gives a boost to the learnings and hence helps the startups to propel in the right direction.

Market size

Startups need to design products with scalability in mind. Despite being original and truly ground-breaking, if there are not enough customers, it may not be profitable in long run. Understanding the wallet-share of customers and alternatives available would become very critical to estimate the size of opportunity. For B2B startups, it is even more important to understand the ecosystem of the target industries, its sales cycle, length of a typical contract etc. which may lead to a very different operating or pricing models.

Selection of investor

Startups have great and (maybe) exclusive ideas; but they need to bank on finances to scale their dream products. Therefore, finding the right investor is crucial for having a harmonious long-term relationship. The investors play a big role in not only mentoring and guiding the startups but also providing the right industry connects. Working with large organizations, may add to the credibility of startup’s claims of having high growth potential. Also, have a strategic investor who has experience in the target industry is always helpful.

Licensing and regulation

Startups may not be fully aware of the complete regulatory environment while they are beginning but it becomes one of the key factors that may hinder growth at some point. Moreover, some startups are essentially trying to create a transformation for which the regulations may not yet exist or be very clearly defined. In such case, it is for startup to be mindful of the evolving regulatory environment and to educate key stakeholders involved including the customers. Startups who start working with corporates may initially face challenges due to demanding due diligence by the corporates, it may eventually help startups in rapid scaling or even become a differentiator for them.

How corporates can help

Having already struggled through these difficulties and overcome them successfully to be in the big league, corporates are a storehouse of knowledge, experience and resources. They can help the startups successfully navigate through their challenges and scale up. The infrastructure, know-how and customer base of the corporates are there for the startup to leverage.

Sodexo’s Open Innovation Program

As a corporate, Sodexo constantly associates with startups to enhance client and consumer experience. To understand and imbibe the changing trends in workplace food, Sodexo has partnered with start-ups in the food industry through the Open Innovation Program. This program helps the startups leverage Sodexo’s domain expertise, corporate access and startup ecosystem access. In turn, Sodexo is able to bring in new food experiences to its corporate clients and consumers. A win-win strategy for all.

Originally published on Inc42