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.

Fear and Shame Kills Corporate Innovation

How well do your people deal with failure?

Most corporate innovators I meet happily point to the Apples and Ubers of the world when they talk innovation. They don’t mean the Apple that launched the Newton or the Uber that treated female engineering staff scandalously.

To talk of success without discussing failure misses a vital ingredient in creating innovation. It almost guarantees they will fail in their attempt to innovate. How do you treat failure? I’ve met it and I know. Do you? Do your people?

Luck can be fickle

We don’t like to admit how much we owe to luck. It’s uncomfortable to think that we might be where we are because of who our parents knew or that we were at the right spot at the right time. Fortune isn’t always random, but sometimes it is.

We embrace failure for a reason

Some see our embrace of failure in startups as arrogance, but this completely misunderstands the case. We understand failure is unavoidable. No amount of analysis can predict the future perfectly. We believe that experimentation is necessary to prove or disprove a business hypothesis. We think real arrogance is believing that proper attention to detail can separate good prediction from bad.

Look to Fuckup Nights

One of my all time favorite event series is “Fuckup Nights”, where startup people retell some of their biggest failures. I’ve spoken at the Copenhagen event twice. Last time it was within an hour of admitting my latest project wouldn’t make it. We do it in part to share the lessons learned, but just as importantly to take the sting out of failure, so we can use the failure to build what we do next.

Startups learn with childlike fearlesness

I have a theory that little kids are great at learning because they’re rubbish at everything. They consequently don’t stress perfection. My four-year is more interested in playing with his monolingual English-speaking cousins than in correctly conjugating their verbs. His mission is to play with them and at this he succeeds wildly. My eight-year old can be a shy English-speaker, but with her cousins, she’s more eager to play than she is shy, so she chatters away.

Guess who the self-conscious teenagers are?

Startups are fearless little kids and corporates are cautious teenagers. When young kids learn to speak a second language, their grammar is just as imperfect in the new language as it is in their mother tongue. Teenagers are self-conscious in all things and struggle with foreign languages, especially because their peers laugh at their mistakes.

Mistakes get you fired

A teenager’s fear of ridicule is real, because the pain of social exclusion is acute. The cost of a mistake in a corporate is just as real. You don’t get hired to make mistakes. You get fired for making mistakes. Couple this with the fact that most corporates hire very selectively, and the fact is that very few corporate employees have ever made a mistake.

If you want your corporate warriors to think innovation, teach them to manage the shame and embarrassment that comes with making mistakes. Teach them how to fail.