Corporations and startups don’t mix. They are like strangers in the night that pass and glance at each other. There is intrigue between them, but no one has a good opening line to get the conversation started.
The way corporations and individuals can act to form a startup community is different, but similar. At out InsightPD event, I spoke briefly about this.
There are things that every single individual person can do to help a startup community get going without investing a dime. Everyone has networks. Use them, free of charge. No toll taking, no success payments. Put your hand in your pocket, and don’t put it in the pockets of others.
- Make an introduction. Use your Rolodex. You don’t have to be a bigshot to do this and you will find that by using your connections, you will make more of them. Your personal network will expand.
- If you can become a customer of a startup-become one. Revenue is far better and cheaper than venture capital.
- If you can introduce a startup to a potential customer, do it.
- Download their app, use their product. Give them feedback after using it.
- Talk about the local startup community at work, parties, with neighbors, friends and at church. Just making people aware will help the entire community. Post things about local startups to your Facebook ($FB), LinkedIN($LNKD), Twitter($TWTR), Tumblr.
If you want to go deeper, donate your time.
Work with local accelerators and academics to mentor local startups. Hold office hours and talk to them for thirty minutes at a time, utilizing your expertise. Important: Do this free of charge. Give before you get.
Lastly, if you have the means add some fuel to the fire. Angel invest, or put your money in a fund that invests in local startups.
You may feel like all you are doing is giving and startups are free riding on your expertise and network. However, there are several ways to monetize it. No one said everything was free. There are many cases where individuals have set up lucrative consulting businesses after starting down the path of mentoring and working with startups.
For corporate aircraft carriers, it’s a little different. They aren’t as flexible. Using startups can really help their business because it’s innovation they don’t have to develop internally. Startups will have an impact on the creative juices of their employees. Corporations can have a massive impact on the community for very little cost. Here are five things they should do.
- Appoint an ombudsman, or even make it a paid position. That person’s job is to be the “connecting API” for startups to begin to navigate through the corporation. They help startups get to the right people that can help them quickly. The ombudsman goes to events and becomes a connector. The advantage to the big corporation is they have some boots on the ground, very close to the cutting edge innovation that is happening. It becomes a cheap information source and will help decision making processes inside the company.
- Partner with local academics and accelerators and have staff mentor startups. Corporations have a lot of internal knowledge (that’s non secretive/proprietary) about marketplaces that startups can use to further their business. Sometimes this will create an ecosystem around the big corporation, creating additional barriers to entry for potential competitors.
- Use startups in pilots. Test them. Especially in the healthcare industry. A startup that has a successful pilot can attract outside investment easier. The big corp gets information, and might find a better way of doing things, benefitting shareholders.
- If you can, become a customer. Integrate the startup into your supply chain. Introduce them to potential customers.
- Corporations have suppliers. Introduce them to a supplier that could buy product from them.
- Tell the community what you are doing through your social media outlets. This will spur more activity.
- Become a place where people who have failed in the startup world can seek some short term employment. Hire failed startup employees as 1099 contract workers and put them to work on projects that have short time horizons. It’s a safety net that benefits both sides.
- Acquire them earlier and integrate them. Actively buy startup companies that fit your business model. The company will save money by acquiring earlier, and will get more upside on the potential of innovation.
Some corporate executives will simply shake their head and look at the costs. This is an “accounting view” of the world, not an “economic view”. The economic upside and benefit far outweighs the budgetary costs of engaging with startups.
If both sides do these simple things, an entire startup community will develop quickly around the activity. Additionally, if you truly want to make America a better place by creating jobs and opportunity, it is imperative that everyone work together to play their part.