Both need to work together for adoption and co-development for the right digital adoption.
Corporates can help build MVPs faster for startups
Corporates can help startups successfully navigate through their challenges and scale-up
Organisations are evolving with changing technology and so are workplaces. With the realisation dawning that employees are in fact, the very first customers of a company, startup or established business, there is a perceptible shift in focus from metric-based to experiential, as far as employee engagement is considered.
To ensure this, companies, particularly larger corporates are engaging with startups for 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 corporates and startups to achieve a successful association when it comes to employee engagement metrics.
Adoption Of Digital Tools
Startups have distinctly innovative concepts. A proof-of-concept is usually one of the best means to ensure relevance and feasibility for the organisations. However, when large organisations that already follow their own technological protocols, it can be a big challenge to ensure seamless adoption.
Meanwhile, startups are also experimenting with the latest technologies and hence have not perfected the process and they learn as they build. Both enterprises and startups need to work together in this journey for adoption and co-development for the right digital adoption.
The 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 segments, it may lead to a longer go-to-market timing.
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 learning and hence helps the startups to propel in the right direction.
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 the long run. Understanding the wallet-share of customers and alternatives available would become very critical to estimate the size of the opportunity.
For B2B startups, it is even more important to understand the ecosystem of the target industries, its sales cycle, the length of a typical contract etc. which may lead to 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 investors 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 connections. Working with large organisations may add to the credibility of startup’s claims of having high growth potential. One also needs to 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 a case, the startup needs 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 corporations, 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 leagues, corporates are a storehouse of knowledge, experience and resources. They can help 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.
Corporates and conglomerates can help startups leverage their domain expertise, corporate access and get startup and tech ecosystem access in return to enable new experiences for employees, customers and consumers. A win-win strategy for all.