In a world where names like Uber, Airbnb and Craigslist have replaced their well-established counterparts in terms of popularity, it isn’t surprising to find that all eyes are on startups. Aspiring entrepreneurs as well as enlightened consumers are willing to give small enterprises a chance. Every startup you encounter is bursting at the seams with potential and the availability of adequate resources (financial and otherwise) will allow them to bring their ideas to fruition. There are several ways to acquire support—inventors, venture capitalists, acquisitions—but we’re here to talk about the road less taken and why that should change.
Image courtesy- GapingVoid
Business collaboration enables individuals and organisations to work together to achieve common objectives. It is the pooling of ideas, resources and talents whether within an organisation or between two or more startups. Collaboration inside the organisation has been a popular theme recently and it’s not surprising that almost everyone shares the same opinion of it.
The concept of ‘team collaboration’ has been slowly replacing the erstwhile ‘team contribution’ model.
However, the real challenge lies in moving past the boundaries of the enterprise and partnering up with other players–both big and small. Here’s a list of reasons why we believe that collaboration, especially for startups, is a rung in the ladder to business success.
1. Beyond The Business
When we talk about external collaboration, startups usually have two options—either they can join forces with another startup or they can enter the big leagues and form a partnership with a corporation. Each path has its own advantages and faults, hence the choice between both must be an informed one. Let’s talk about the first option. Since the driving force behind almost every startup is innovation, it is safe to assume that there is a lot of competition in that arena. In such a situation, it only makes sense for startups to collaborate with one another. If you can’t beat them, join them, right?
By forging a partnership, two startups can share ideas (which are usually in plenty) and resources (which are usually scarce). There’s also the added benefit of gaining allies, especially if both the startups are from the same industry. The startup to startup (S2S) economy is a host of opportunities if ventured into properly. By nature, startups are ambitious, driven and flexible. Their agility gives them an undeniable advantage over corporations.
Image courtesy– Collaborne
Most startups are raring to take action and this willingness, when directed towards another startup can lead to a fruitful partnership. With joined forces, they can make decisions much faster than if they were to partner up with a corporation. In the matter of risk, most small-scale ventures already have a high risk tolerance so the support of fellow startups will fuel new, bold projects. With their layers of processes and politics, this is one area where corporate collaborators fail to flourish.
2. The Sharing Economy
One point that is unique to small-scale collaborations is the prospect of unlimited learning. If organisations were humans, you could say that while most corporations are adults, startups are still infants who have much to learn in the years to come. This fundamental difference leads us to the key reason why startups should collaborate with each other instead of big companies—two enterprises working at the same level will face similar problems and challenges. Joining forces will expose them to the problems faced by each and the various solutions that they employed in the past.
The lightning spark of thought generated in the solitary mind awakens its likeness in another mind. – Thomas Carlyle
Together, enterprises can come up with creative solutions for existing problems as well as anticipate future ones. Furthermore, a quid pro quo mechanism is the driving force behind these partnerships so both entities are bound to gain something. For example, if a startup wants to launch an aggressive advertising campaign but doesn’t have the funds, it can approach a startup which has the funds and collaborate. One gets the desired advertising while the other gets credentials—a symbiotic relationship at its best.
Image courtesy– Uber
A great example of this is the recent Uber-Spotify collaboration which allows customers who order a music-enabled car to play their favourite sounds. Subscribers of the paid Spotify service will have complete control over the music that plays during their Uber ride by linking the two apps on their phones. By collaborating, they’ve achieved the dual objectives of customer satisfaction and innovation which are essential ingredients for startup success.
3. Dream Big
The other way for startups to move forward is to partner up with an established company. When Isaac Newton said, “If I have seen further, it is by standing on the shoulders of giants,” he wouldn’t have imagined that his one quote would sum up the entire concept of startup-corporate partnerships so well.
Collaborating with a big player has its obvious perks—you get access to more funds, better technology and a wider customer base.
Big companies have been in the industry for years so they have a sound understanding of how the business works. Startups are bound to benefit from this knowledge, especially if they’re planning to expand operations. A bigger partner would also provide bigger opportunities in the long run.
Image Courtesy– Pivot Point
4. Merge to Move Forward
As seen in the case of Nike, Coca-Cola, MasterCard and many others, large companies are actively looking towards startups to add value to their brand. In several instances, startups have been acquired by corporates and given complete autonomy in operations but with one catch—to do what they do under the umbrella of the company name. Some have accepted this idea with zeal since it gives them the funds and resources that they desire along with the security of a large company name. Others have been hesitant because the whole point of a startup is being your own boss and acquisition by a corporate will undermine that. Entrepreneurs are also vary of idea theft and disproportionate benefit-sharing when they consider collaborating.
When you think about Siri, you’re instantly reminded of Apple and the same goes for Android and Google but these iconic products weren’t created by those companies.
These were creations of startups (named Siri and Android Inc.) and were later acquired by Apple and Google. This is why the future of most startups is promising, if not gloriously bright.
Image courtesy– Slash Gear
Regardless, working together whether it be with customers, peers, startups, big players or within the enterprise itself is universally being accepted as a good call when it comes to startups. There are several factors to be considered before forging a partnership and it is important to pay due diligence to it but one thing is for sure—collaboration is the way forward.