Your Corporation Wants to Work with Startups? Buy Their Stuff

Corporates that want to work with startups could do worse than start by buying some of their product – and paying immediately upon receipt of the invoice.

A couple of years ago in the City of London, I walked into a medical technology innovation event hosted by a friend and got an offer I couldn’t refuse.

“Great to see you, Nick”, he said, “I need a favor. Someone just cancelled on a panel we’re hosting tonight and it’d be grand if you could stand in for them.”

“Of course”, I replied, “what’s the panel about and when does it start?”

“Startups and corporates, innovation, that sort of thing. We’re on in five.”

Say anything you want, as long as it’s interesting

It’s important to know your role on a panel. There was a government innovation expert and two senior pharma industry people. I was the only panelist in jeans and a scarf, so I was clearly there to be the startup guy. My role was clear: make things lively.

Sing for your supper

As the mike slowly worked its way towards me, my three colleagues all shared variations on how innovation was vital and they were working jolly hard at it. I was the wild card,  so when I got the mike, I asked the big pharma guys the obvious question. “What do you actually buy from startups?”

Show me the money goes both ways

There were cheers and applause from the startup people in the crowd. It was an after work event and startups love a free bar, so I had a vocal base of support. To their credit, the pharma guys were game. The conversation turned away from the all-too-frequent discussion of what startups need to do in order to be attractive to corporates. It became a more equal talk about what both sides need to bring to a relationship.

Sometimes being rude isn’t rude

There were claps on the back from a couple of folks after the event and talk of speaking truth to power, but the fact of the matter was much more straightforward. You can’t bridge the gap in understanding between corporate innovation and startups without helping both sides see the other’s perspective. The big pharma guys needed to hear my question.

Pro tip: Pay their invoice upon receipt

There’s a varsity-level follow up to the “have you bought anything” question, which is “under which payment terms?” If you’re a corporate and you want startups to love you, pay them upon receipt of the invoice.

But that’s not how we do it normally

Yes, that’s not how your firm pays bills normally, but your usual terms are asking a cash-strapped startup to wait three months or even longer for payment. What seems like a detail to you can cause serious cashflow problems at a startup. Be a hero. Do the right thing. Pay them when you get the bill.

Innovation Theater People

Don’t get sucked into someone else’s ’dog and pony show’

The tinfoil hat segment of the innovation business has always existed. The new crazies that I see in the innovation business work at corporates. They may lack the wild-eyed look, but many hold equally improbable beliefs – and create just as little value. Beware of becoming too entangled with them unless you have a clear value proposition like, for example, they’re paying for the drinks.

Innovation is a big tent and we give away a lot of love, including to some who may not deserve it. I have a hard time figuring out how lots of these people add value. There may be method to their madness though, and I am straight up envious of much of it. They seem have a ball, make good money, and not be judged too hard on results. Respect.

The Hipster

Everyone’s got a Director of Innovation these days. The young-ish, sneaker-clad corporate head of innovation is on stage everywhere, talking about their company’s digital transformation. When pressed, they struggle to name anything specific that’s been implemented or sold, but the sneakers look good and, hey, their employer is embracing disruption. Mind the gap between the slideshow and reality.

The Dealmaker

The dealmaker is looking for startups that have product-market fit, a great team, billion-dollar potential, and a good cultural fit with their company. On a personal level, their preferred mate is a supermodel with a Stanford PhD, who, in the immortal words of  the boy band One Direction, “doesn’t know she’s beautiful”. Beware of the long distance and many cups of coffee between meeting them and cutting a deal.

The Community… Something

This person doesn’t exactly have a seven-word description of how they create value. Despite this, I’ll admit to anyone that cares to ask that this job sounds awesome. The KPIs seem to be ‘keynotes given’, ‘cups of coffee drunk at conferences’, and ‘LinkedIn connections added’. It looks like fun, but beware of anything they’re giving away for free.

The Garage Boss

Apart from workshops and events, I haven’t quite figured out what these people do, but garages are hot. The crowds trekking through Silicon Valley on innovation tours have seen the Hewlett-Packard garage and decided they need one too. “Innovation labs” and ”creator spaces” are also garages and a rose by any other name still smells as sweet.

The architecture is a key identifier. Look for plywood walls, primary colors, cool light bulbs, and bookshelves full of work by the right authors. The garage boss seems to hold a lot of workshops and those books don’t read themselves. Beware of panel invitations to be the ‘fun startup person’ aka the only person not in a suit.

Slide on up to the bar

The Innovation Theater Crowd can steal a lot of your time, if you’re not clear about how they can add value to you. Don’t be an extra in someone else’s show. Once you can see the value, however, make sure they’re paying for the drinks – and enjoy!