For startups, even getting an initial meeting with a company can be difficult — let alone establishing a partnership. To understand what works, the authors attended 150 one-on-one meetings between startups and companies such as IBM, Sony, SAAB, L’Oréal, Scania, Toyota and AstraZeneca. Our observations helped identify five best practices to help startups generate corporate interest in working together after meetings: 1) Have clear but flexible goals; 2) Dealing with existing problems and needs; 3) Dealing with ease of integration and cooperation; 4) Current use cases and new value propositions; and 5) Gather the right team.
In a LinkedIn post shared last year, PepsiCo Labs general manager Anna Farberov shared her frustration with the strategic mistakes the startup made when pitching to companies. Having attended 3,500 such meetings, he felt he had the expertise to detail their mistakes. However, the response to his post has been overwhelming, with employees and startup founders keen to highlight the issues they face when approaching companies. Both sides clearly want to work together. But they struggle to find ways to engage in successful and lasting engagement.
For startups, even getting an initial meeting with a company can be difficult — let alone establishing a partnership. Cold calling is a lottery. Companies are a “black box” to outside entrepreneurs, and establishing relationships with decision makers can be difficult. As one serial (and quite successful) entrepreneur told us, “I wouldn’t be able to walk into their office, let alone start a collaboration.” If even experienced entrepreneurs struggle to get opportunities to work together, one can only imagine how difficult it is for first-time startups and startups.
Initiatives such as “speed dating” events, where multiple startups pitch to corporate representatives, can facilitate the process. At such events, often organized by intermediaries, corporate “scout teams” seek to generate an inflow of ideas, technologies and solutions for the company. Despite such efforts, startups are still unlikely to capitalize on this crucial first encounter.
At the first meeting, the early-stage startup must garner enough interest to secure a follow-up meeting. A good performance during that first interaction is important. There are often no second chances. But how can a startup get that critical second meeting?
To answer this question, we attended 150 one-on-one meetings between startups and companies including IBM, Sony, SAAB, L’Oréal, Scania, Toyota and AstraZeneca. The meeting was organized by Ignite Sweden—a non-profit initiative that aims to foster innovation by connecting technology startups to large corporations. Our observations help identify insights on how startups can best generate corporate interest in working together after a meeting. The following best practices help the startups we observe secure that all-important second meeting.
Have clear but flexible goals.
Depending on their stage of development, a startup’s goals may include collaborating on a proof of concept, working on a prototype, making a sale, or co-creating a product. A startup with clearly stated goals helps companies see possibilities for engagement. This can lead to companies offering alternatives that flexible startups can use to take advantage of unexpected opportunities.
For example, one gaming startup, Attractive Interactive, adapted its technology for SAAB to help pilots land in severe weather conditions. The company’s COO said, “It’s exciting to apply our knowledge of game development to brand new issues.” This collaboration was unimaginable for Interesting Interactive before its meeting with SAAB. Not all beginners need to pivot this way but those who do may see potential they never imagined before. Therefore, clarity with flexibility is a virtue.
Address existing problems and needs.
Initial team members should understand the corporation’s needs in sufficient detail before the first meeting. Such preparation may simply involve perusing corporate websites and industry-related documents prior to the pitch. This aligns the solution with the corporation’s existing efforts to create customer value by improving current processes, products and services.
In one example, Toyota Material Handling partnered with IPercept Solutions, a deep-tech startup that provides AI services to track industrial machines. In the initial meeting, IPercept was able to show how their solution perfectly fits the needs and ambitions of Toyota Materials Handling. The implementation of this tool radically improves the latter process, according to Mattias Dahlgren, Maintenance Manager at Toyota Material Handling.
This example shows how startups that tackle existing problems and provide innovative solutions can make themselves indispensable to companies.
Addressing ease of integration and collaboration.
Startups must know how to integrate their products into the corporation’s existing processes. Startups should make it easy for corporations to engage with them by first understanding the company’s current workflow.
A startup created a machine learning algorithm to help Alfa Laval — a leading global provider of heat transfer, separation and fluid handling — accurately assess when its heat exchangers need cleaning. Thanks to this collaboration, the corporation, founded in 1883, can use smart heat exchangers despite the lack of expertise in this domain.
Current use cases and new value proposition.
During the meeting, the startup should demonstrate how it will create new value for the corporation and its customers. One approach is to talk through corporate-specific mock use cases. Alternatively, real use cases based on the startup’s engagement with other companies can be presented.
This opportunity to create value should be conveyed through a brief demo presentation that emphasizes the ease of integrating the proposed solution with existing channels. Pilot collaboration projects with companies are especially useful for early-stage startups as they increase the company’s legitimacy and help grow their customer base.
Assemble the right team.
Beyond startup founders, it’s useful to involve business development and technical experts who can engage corporate representatives in a fruitful dialogue. A team consisting of technically competent members (eg, CTO) and those with a business development background are better able to understand how the startup’s technology benefits the corporation. With the right team, possibilities can emerge beyond the startup’s technology and company challenges. Founders with a strong technical background but unable to explain their technology or its applications usually fail to attract an audience. Therefore, the team must include members who can explain the potential use of their services along with those who can answer technical questions.
The list of dos and don’ts below distills our observations on how startups can ensure a successful first meeting that leads to follow-up and collaboration.
What to do in the first meeting.
- Address the existing problems and needs of the corporation, and their industry problems.
- Tailor the presentation to individual companies and show how your new startup can help them.
- Focus on ease of integration rather than your technology.
- Present a mock/use case to demonstrate the new value proposition.
- Be flexible and ready to pivot and co-create when the opportunity arises.
- Bring in a team with expertise in technology and business development.
What not to do on a first date.
- Don’t just pitch: Listen to their current and future needs.
- Don’t use the same pitch for different companies: Customize.
- Don’t just focus on your technology but show how it will help the corporation.
- Don’t just send technical staff on highly technical presentations.
New companies can achieve the desired level of engagement by first engaging with what they know about their corporate partners. Only then should they focus on creating products and services together. New companies that have customers who can demonstrate how their technology will help the corporation are practically guaranteed to gain their interest in follow-up meetings. Therefore, their efforts should be directed towards understanding the value stream of the company, its customers, and potential ways to create more value.
In this way, startups can overcome the challenge of navigating the often complex inner workings of a corporation. They can get to know the corporation and how it works. And they can build on this knowledge to receive an invitation to a second meeting where both teams can focus on innovation.
