5 Secrets to Collaborate Effectively between Startups and Corporations
Effective Collaboration = The best of both WORLDS
We are not going to review the soft collaboration (co-marketing, etc.) but only the hard ones including: Contractual Development, Joint Venture, Divest to industry players, Spin off and IP licensing. Also, we will consider that the corporation has IP (intellectual property), makes a technical feasibility study and has market data demonstrating customers’ interest. Before detailing each option, let’s take a look at the decision tree corporations use to decide in which direction to go.
Decision Tree
As explained in this website, corporations have processes and people in place for all the decisions they have to make. Inside these companies, you will find organizations focused exclusively on innovation. They usually belong to the corporate team and have responsibilities across all the businesses. As such, they are in charge of mergers and acquisitions to fill the product or services gaps of the corporation. However, they are also responsible for valuing the IP created by their companies. Read More...
We are not going to review the soft collaboration (co-marketing, etc.) but only the hard ones including: Contractual Development, Joint Venture, Divest to industry players, Spin off and IP licensing. Also, we will consider that the corporation has IP (intellectual property), makes a technical feasibility study and has market data demonstrating customers’ interest. Before detailing each option, let’s take a look at the decision tree corporations use to decide in which direction to go.
Decision Tree
As explained in this website, corporations have processes and people in place for all the decisions they have to make. Inside these companies, you will find organizations focused exclusively on innovation. They usually belong to the corporate team and have responsibilities across all the businesses. As such, they are in charge of mergers and acquisitions to fill the product or services gaps of the corporation. However, they are also responsible for valuing the IP created by their companies. Read More...
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Secret 5: Intellectual Properties Licensing
Intellectual Properties Licensing
In recent years, many corporations have realized that much of the IPs they have created were never used for their own purposes. Growing and maintaining a huge portfolio of IPs is expensive and also prevents entrepreneurs from creating brand new businesses. The basis of IPs for corporations is to protect their mainstream businesses, and sometimes to create new ones. However, they have become better at managing their IP portfolios and instead of blocking the market, when some of it is not strategic, licensing or selling it has created more value to them. As a consequence, more entrepreneurs and startups can have easy access to corporate IPs. Hopefully, in the coming years more and more corporations will open their IP book, will organize IP fairs and will enable great new innovations to come to market.
Read More...
In recent years, many corporations have realized that much of the IPs they have created were never used for their own purposes. Growing and maintaining a huge portfolio of IPs is expensive and also prevents entrepreneurs from creating brand new businesses. The basis of IPs for corporations is to protect their mainstream businesses, and sometimes to create new ones. However, they have become better at managing their IP portfolios and instead of blocking the market, when some of it is not strategic, licensing or selling it has created more value to them. As a consequence, more entrepreneurs and startups can have easy access to corporate IPs. Hopefully, in the coming years more and more corporations will open their IP book, will organize IP fairs and will enable great new innovations to come to market.
Read More...
Secret 1: Contractual Development
Contractual Development
From the various collaboration scenarios, this one does not look like the most promising from an entrepreneurial point of view. IP has been created and is still owned by the corporation, and the entrepreneur will have to invest research and development money to finalize the solution. It feels like taking most of the risks while not having control of the core intellectual property.
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From the various collaboration scenarios, this one does not look like the most promising from an entrepreneurial point of view. IP has been created and is still owned by the corporation, and the entrepreneur will have to invest research and development money to finalize the solution. It feels like taking most of the risks while not having control of the core intellectual property.
Read More...
Secret 2: Joint Venture
Joint Venture
This type of business relationship is probably one of the most complex. As a summary, it is like having one body with two heads. Sometimes the two heads have the same goals, sometimes not.This is probably why companies are never too attracted by this scenario and also why so many joint ventures fail. It is also important to note that in most cases a JV is the result of two companies of significant size. As such, it is unusual to have startups creating a JV with corporations.
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This type of business relationship is probably one of the most complex. As a summary, it is like having one body with two heads. Sometimes the two heads have the same goals, sometimes not.This is probably why companies are never too attracted by this scenario and also why so many joint ventures fail. It is also important to note that in most cases a JV is the result of two companies of significant size. As such, it is unusual to have startups creating a JV with corporations.
Read More...
Secret 3: Divest to Industry Players
Divest to Industry Players Venture
This scenario happens more often than you expect. Usually, the corporation has created a solution based on IP. This new product or service has been introduced to the public, the sales force is aware of it and also a few customers have already bought it. A few go-to-market partners have decided to resell the solution. However, the corporation has decided that keeping the business is not the right solution. At this point, one option to consider is to divest to industry players. The most elegant solution is to transfer the IP, existing solutions, etc. to an existing partner.
Read More...
This scenario happens more often than you expect. Usually, the corporation has created a solution based on IP. This new product or service has been introduced to the public, the sales force is aware of it and also a few customers have already bought it. A few go-to-market partners have decided to resell the solution. However, the corporation has decided that keeping the business is not the right solution. At this point, one option to consider is to divest to industry players. The most elegant solution is to transfer the IP, existing solutions, etc. to an existing partner.
Read More...