Most newly founded companies initially want to go it alone and aim to blaze their own trail to ultimate success. Generally, somewhere along this adventurous and frequently arduous journey, it often becomes clear that the path to making a major dent in the world would be significantly shortened by partnering with others that have special assets which can bring the ultimate goal closer, such as product development expertise, complementary offerings, market access, deep pockets, etc.
Of course, for young companies, finding well-suited partnerships is not as easy as snapping one´s fingers. In addition to possessing an attractive innovation, young companies need to build a solid foundation that engenders trust from larger corporations, which will always be weighing the potential benefits of cooperation against the risks to their business that a partnership can introduce. Probably the most delicate balance start-ups must master is advancing their development at lightspeed while also establishing the structure, reliability, discipline, and security that are essential prerequisites for engaging in sincere discussions with larger corporate partners. Innovative companies that do this well are able to establish proof-of-technology, proof-of-market, and proof-of-compatibility with strategic partners seamlessly along their journey.
For young companies that manage this balance and become attractive for corporates, determining the right time to sacrifice partial (or complete) autonomy for enhanced chances of success by gaining access to these special corporate assets is rarely crystal clear. However, a general rule is that a partnership only makes sense when the combined forces dramatically increase the impact that a product or solution can have in the world. There will inevitably be frictions involved in sharing the steering wheel, so it is important that the benefits are large and clear in order to keep everyone driving toward the shared goal.
Ultimately, a business´ value should be determined by its positive impact on society and joining forces with a corporate partner can often be the best way for innovations to drive meaningful change and thus create significant value. We are extremely pleased with the three excellent partnerships with corporates that our Investee-Partners achieved so far this year, precisely because we are certain that in each case even greater value creation lies ahead.
Your bm|t Team