As open innovation gains remarkable prominence, corporate-scaleup collaborations reaffirm their pivotal role in channelling innovation.
In our recent “Mastering Corp-Up cross-industry” webinar on September 6th, Match-Maker Ventures explored these strategic partnerships with cross-industry leaders and innovative scaleups, uncovering their significance, challenges, and successes.
Missed the event? Click below to access the webinar on demand!
To discuss how leading companies make scaleup-corporate collaborations succeed, we brought together representatives of leading corporates and scaleups.
What did we learn?
Corp-Up collaborations hold immense potential for innovation, combining the agility of scaleups with the resources of established companies. However, these partnerships come with their unique set of challenges and opportunities. Here’s what we’ve learned:
Setting the foundation for collaboration: Governance and Sponsorship
In successful scaleup-corporate collaborations, a solid governance structure and the presence of the right sponsor are paramount. As Andras Fischer, Director of Innovation at OTP Bank, emphasized, “In a solid governance structure, the sponsor is at the top of the chain.” Their role is pivotal in pushing collaborations forward.
Building trust and managing differences
On the scaleup side, working with corporates can be challenging due to lengthy sales cycles. Scaleups need to be clear on their objectives, roles, and timelines from the outset. As mentioned by Georg Tsaros, CEO at Eyeonid Group AB, “Researching the corporate’s pain points and preparing thoroughly before approaching them can expedite the process.” Orly Glick, CEO at ESGgo, highlighted the importance of transparency and patience in building trust: “Trust is built over time (…) and it’s important to revisit discussions after a few years if necessary.”
Understanding corporate needs
In addition to building trust and aligning on expectations and timeline, scaleups must align with corporate goals and grasp the core products and services. Chris Halton, VP of Product Strategy & Innovation at Verizon, advises focusing on adding value to the customer and understanding where you fit within the corporate landscape. As Chris humorously puts it, “Verizon does not build rocket ships. There are so many ideas that come to our doorstep. But just because we can do it doesn’t mean we should do it. You have to understand where you fit”.
Europe VS US – Perspectives on innovation
Europe and the US have distinct innovation ecosystems. In Europe, competition is fierce, necessitating constant out-of-the-box thinking, according to Paolo Murri, Head of Business Development & Open Innovation at TIM Italy. Conversely, the US has a complex competitive environment, requiring innovative services to enhance the customer experience beyond telco products.
Margins and innovation
As noted by Paolo, smaller margins in innovation pose industry challenges. Chris, on the other hand, highlights margin variability based on whether a feature serves retention, competition, or revenue generation. Despite modest margins in banking, operational efficiency and customer retention solutions yield significant savings. The message is clear: while margins matter, the strategic value of innovation should never be underestimated.
Top-Down vs. Bottom-Up Innovation
Innovation models vary across industries. Banking leans towards top-down approaches, with corporates identifying pain points and seeking scaleups. Telcos adopt a mixed approach, embracing top-down for operational improvement and bottom-up for revenue growth. “You don’t know what are new things until you find them and open innovation is a must in these days”, said Paolo Murri.
In relation to this, Verizon launched an internal open innovation portal fostering a culture of innovation, assessing ideas based on key criteria. “We look at ideas in the same way and we measure them across a set of different criteria before we engage further – product placement, technical maturity and market opportunity. If we can’t answer these questions, we can’t do anything”.
As mentioned by Georg “It’s a mix and this is what makes it challenging. Otherwise, you would have a blueprint on how to do it with every client. It’s never the same”.
Let’s wrap up!
In conclusion, the webinar highlighted how successful scaleup-corporate collaborations require clear governance, trust-building, alignment with corporate goals, and a deep understanding of the industry landscape, regardless of the specific vertical or size of the company.