How Corporations Can Support Startups

There has been a lot of discussion around the best ways corporations can engage and support startup communities the right ways. I was recently asked by Scott Case who is leading Startup America, to reflect on the best ways companies can support startups and innovation.

Startup communities around the world are comprised of the most influential, picky, and innovative makers and do-ers out there in entrepreneurship. Through Startup Weekend, I’ve had the chance to work with hundreds of companies that what to be in the startup space. Few companies do this extremely well, so I wanted to point out what I thought the best practices were for those that were most admired and supported by our community.

1. Be Platform Agnostic. As a large corporation or even a small company, you must welcome competition. The community is the ultimate winner when they have the choice, and when corporations participate in programs that allow choice, the invaluable and intangible brand benefits are truly the win. When Microsoft and Amazon both attend or sponsor a program, their is almost a scandelous vibe in the air that both excites and unites people around the greater good. This scenario will provide the most raw and valuable feedback about how consumers genuinely use and make decision about your products. Microsoft supported our event where an iPhone app was built on their campus, and I’ve never heard so much praise for Microsoft come from anything else. Believe me, the startup community respects this and it goes a long way for building brand equity!

Lesson: Sponsor the key initiatives that are supporting startups, entrepreneurs, and developers in your area despite who else is there.

2. Support Non-Corporate Initiatives. It’s clear that a Google Hackathon or Facebook Dev Camp somehow has the best interest of the party leading it. Does it have the best interest of the greater community at large? Community led initiatives & programs are more likely to incorporate more players from the ecosystem at large, and the outcomes are not confined to any specific interests that can potentially drown out great people & ideas. Have you ever seen Apple’s logo as a supporter on a non-Apple centric initiative? This isn’t a cult, it’s a community.

Lesson: Don’t look at internal initiatives that include the community as the primary source of your programs that “support startups.” Live a little and open your doors to some fresh perspectives not just from your fanboys.

3. Empower Community Leaders. Let the people who are already leading the independent programs and grassroots initiatives make the decisions…. Don’t re-invent the wheel.

Lesson: Find the real community leaders and have them help advise you on what programs really are having the highest impact and are most supportive for startups.

4. Find Your Best People. Truly connecting with your community isn’t done by having the biggest banner, longest speaking spot, or slickest evangelists. It’s about the human connections that representatives of your company have with influential community members. Most corporate employees are 9-5ers, but this is a great opportunity to find those within a company that are truly connecting to the outside world. My bet is that these are the people within any company with the greatest potential and best ideas.

Lesson: Don’t just send people from corporate teams or business units to talk. Find the ones that are rolling up there sleeves and interacting with the influencers.

5. Forget your KPI’s. Don’t make things difficult for everyone. Weather it’s your managers or the community leaders you are working with, the more tangibles and statistics you require, the more friction and work it creates for everyone. If you truly want to foster early stage activity, understand this is a discovery phase. If you can take an ecosystem perspective, accept that you can’t always track the exact number of people using your platform, signing up for your mailing list, engaging with your brand, etc. Ultimately, if you look at your support programs for startups more as a charitable program & R&D and don’t demand a lot in return, you will see a much larger impact…. the question then becomes what levels of support to you provide for the audiences you reach AFTER they attend/participate in these other programs.

Lesson: Ask what can you do for the startups, not what can they do for you. Focus on building relationships and then providing support to help them solve their problems & reach their goals.

6. This is the Best R&D you will ever get. LISTEN & ANSWER. Corporations spend far too much time guessing about how real humans will use their product or looking at spreadsheets of usage statistics. If you can’t answer the questions startups are asking, understand how they are making adoption decisions, or sit down and watch how startups interact with your products, you are wasting your time.

Lesson: If you are a corporation looking to get involved in the startup world, take off the tie, roll up your sleeves and go hang out, work, troubleshoot, code, whatever it takes! These are the people that will shape all of our futures, so the more you are engaged and connected to them on a human level, the more successful you and your company will be.

4 Responses to How Corporations Can Support Startups

1. Jim Anning says:

   Pay Quickly.

   It’s so easy for large corps to forget how difficult cashflow can be for a startup. 60 days payment terms, may seem reasonable for mega-corp, but when you are small and bootstrapped 60 days can be the difference between life and death.

   Lesson: If you are a corporation looking to get involved in the startup world, don’t just focus on developing your community links, check if your accounts department fast-tracks payments for small companies.

   In other words… put your money where your mouth is
2. Enrique says:

   Marc,

   This is a great post. Thanks to Eric Apse who tweeted it.

   I very much agree with your perspective. Large corporations have the resources to assist emerging companies in developing and scaling their businesses with a relatively small investment in time of key executives and financial and non-financial resources.

   Our own startup, startupblvd.com, is based on this premise. Large corporations are actively trying to reach out to the entrepreneurial community BEYOND the traditional venture portfolios and banker referrals. They are seeking bootstrapped “tidy little businesses” that can be developed and grown into multi-million dollar business lines leveraging the corporation’s vast resources and networks.

   Companies exemplifying this include IBM, Microsoft, Google, Verizon Business, Fidelity Investments, P&G, Coka-Cola, Battelle, to name a few. These corporations are either strongly committed or beginning to commit significant time from senior executives to support early stage companies.

   We have found there is plenty of room for improvement in enabling those connections. Especially regarding your first point: platform agnostic. The moment entrepreneurs smell there is an intent from the large corporation to have a lock-in in the startups/small company’s business, they start to question the corporation’s real motivation. Comments like: “they want us to pay for expensive hardware down the road.” or “our valuation will suffer due to less marketability at the time of liquidity” surface, hampering the development of healthy partnerships between the large corporation and the small company.

   Entrepreneurs like to work with people who are truly passionate about solving real problems in the market. Thus partners who are willing to work for the greater good, and not just with self-interest in mind, will develop a healthy brand image and good will in the innovation ecosystem.

   I would love to connect with you to get your reaction to our project and find ways to collaborate.

   Best,
   Enrique
3. Marc says:

   Hey Enrique, it’s always a bit of a game, certainly! Looking forward to connecting and discussing further!

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