There is much to consider when a mature company and a startup decide to work together. And usually it’s an exciting time. Both are interested in knowledge sharing, access to new features and of course the opportunity to explore new ideas. Also often they include some uncertainty.
I recently had the pleasure of speaking at the summit of the biannual collaboration of the Canadian Digital Media Network (CDMN) – a network that brings together leading Canadian incubators startups.
Here are eight tips that I have shared in CDMN on the approach to Thomson Reuters to establish these relationships in a manner beneficial to both parties:
Corporations have no intention of atropellas new businesses, they do automatically. The size of the company, as a client or business partner, can easily overwhelm a company that is starting. We do our best to think like an entrepreneur and avoid adding undue risk to the already risky entrepreneurship.
Yes or no, maybe not
When a startup is approaching an opportunity to join a large company, an application for a license data or even just for selling products, we do our best to give the startup a clear and specific direction. «Yes or No» allows them to progress, «perhaps» keeps them in limbo. New companies tend to see the world through rose-colored glasses – «maybe» is very similar to each other and will continue to pursue something they can never achieve.
There is no free lunch; pays the startup
If you ask a startup do a job for us, either in a proof of concept or market validation, we try to be aware that we are consuming valuable time and resources of the startup – a company that works with the minimum and still can will not be profitable. If you are working for us, we have to pay for it.
You want equity? Invests worldwide
Equity is the only thing a startup must desperately to protect if you have the ambition to be a great company. Trade shares for sales, data or other services is very difficult; disputes that may arise in the assessment and due diligence are even more. The best way to have equity is to participate in a round of funding for the startup. That said, order a coupon of 5 or 10% in the evaluation of a future round of investment in exchange data or services is fair game.
Find the solution win-win-win
Ideally, we can establish a partnership that is good for the startup (aligned with its product plan and strategic direction) for Thomson Reuters (in line with our customer base, product portfolio and technology strategy) and our customers ( the solution must be more valuable to the startup and Thomson Reuters acting together than apart).
Traction is the crystal ball
It is almost impossible to predict what new businesses will be successful and which will not. We guess success does not touch or make statements about what a good idea / bad idea – the market dictates success. We look startups that have traction with customers – the trajectory of positive sales / market adoption is the best indicator of success.
KYS: Know your startup
To assess whether a startup is ready to scale and commit to a larger company, look at the size of the investment to date (min: a startup should be close to the series A), the team size (have enough people to embrace a great opportunity?), try to estimate the rate of loss (if the company is not profitable, what will be lost in a month?), the strength of the team (the founders have a proven track record for execution history?), and of course if the product itself and support teams can handle the load.
Being a good client / good partner
Besides giving an opportunity for startup, there are ways to be operationally friendly with her. Procurement processes, and contracts IT reviews are the three main themes: short courses of billing and payment, realistic policies accommodation / security / support / privacy and simple and direct contracts. In short, procedures and contracts created for suppliers / partners like Microsoft are not necessarily the same procedures and more appropriate contracts for a startup.
* The Thomson Reuters Labs are laboratories of innovation of Thomson Reuters, who collaborate with customers worldwide to solve large problems quickly, design and validate solutions using science and technical data read. The Thomson Reuters Labs working with external partners and are active members of regional innovation ecosystems, offering world-class solutions for customers.
AUTHOR: By Brian Zübert , Director, Thomson Reuters Labs * in Waterloo (Canada)
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