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It can even be difficult for startups to set up a first meeting with a company — let alone establish a partnership. To understand what works, the authors participated in 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 collaborating after the meeting: 1) have clear but flexible goals; 2) address existing problems and needs; 3) Address ease of integration and collaboration; 4) Present use cases and new value propositions; and 5) Assemble the right team.
In a LinkedIn post shared last year, PepsiCo Labs CEO Anna Farberov shared her frustration with the strategic mistakes startups make when approaching corporations. After attending 3,500 such meetings, she felt she had the expertise to detail her mistakes. However, backlash to her posts has been intense, as startup employees and founders have been keen to highlight the issues they faced when reaching out to companies. Both sides obviously wanted to work together. But they struggled to find ways to engage in successful and lasting engagements.
It can even be difficult for startups to set up a first meeting with a company — let alone establish a partnership. Cold calls are a lottery. Corporations are a “black box” for outside entrepreneurs and reaching out to decision makers can be difficult. As one (and fairly successful) serial entrepreneur told us, “I couldn’t even walk into their office, let alone start a collaboration.” If even seasoned entrepreneurs struggle to secure a chance to collaborate, one can only imagine how difficult it must be for newcomers and start-ups in the early stages.
Initiatives such as “speed dating” events, where multiple start-ups meet company representatives, can facilitate the process. At such events, often organized by intermediaries, company scouting teams try to generate an influx of ideas, technologies and solutions for the company. Despite these efforts, startups are still unlikely to benefit from this crucial first encounter.
Early-stage startups need to generate enough interest at the first meeting to secure a follow-up meeting. Performing well during this first interaction is essential. There is usually no second chance. But how can startups win this crucial second meeting?
To answer this question, we participated in 150 one-on-one meetings between startups and companies including IBM, Sony, SAAB, L’Oréal, Scania, Toyota and AstraZeneca. The meetings were organized by Ignite Sweden – a non-profit initiative that aims to foster innovation by connecting tech startups with big companies.
Of the meetings we attended, only 6% resulted in a commercial collaboration. Our observations helped provide insights into the best ways for startups to generate corporate interest in collaborating after the meeting. The following best practices helped the startups we mentor secure the all-important second meeting.
Have clear but flexible goals.
Depending on the stage of development, the goals of a start-up can include collaborating on a proof of concept, working on a pilot project, selling or co-developing products. A start-up with clearly formulated goals helps the company identify opportunities for engagement. This can result in the group offering alternatives that a flexible start-up could use to capture unforeseen opportunities.
For example, a gaming start-up, Attraction Interactive, adapted its technology for SAAB to help pilots land in harsh weather conditions. The company’s COO said, “It was exciting to apply our knowledge of game development to brand new themes.” This collaboration would have been unthinkable for Attractive Interactive before meeting SAAB. Not all startups need to pivot in this way, but those that do may see potential they hadn’t previously imagined. So clarity with flexibility is a virtue.
Address existing problems and needs.
The start-up team members should have a sufficiently clear understanding of the needs of the company before the first meeting. Such preparation could simply involve reading the company’s website and industry-related documents before pitching. This aligns the solutions with the company’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 for tracking industrial machinery. At the first meeting, IPercept was able to show how its solutions fit the needs and ambitions of Toyota Material Handling. According to Mattias Dahlgren, Maintenance Manager at Toyota Material Handling, implementing these tools has radically improved the latter’s process.
This example shows how start-ups that tackle existing problems and offer innovative solutions can make themselves indispensable for corporations.
Make integration and collaboration easy.
Start-ups need to know how to integrate their products into the existing processes of the group. The start-up aims to make it easier for the group to deal with them by first understanding their current work processes.
A start-up has developed a machine learning algorithm to help Alfa Laval – a global leader in heat transfer, separation and fluid handling – estimate exactly when its heat exchanger needs cleaning. Thanks to this cooperation, the company, founded in 1883, was able to use intelligent heat exchangers despite a lack of expertise in this field.
Present use cases and new value propositions.
During the meeting, the start-up should show how it would create new value for the company and its customers. One approach would be to talk through a company-specific mock use case. Alternatively, concrete use cases could be presented based on the start-up’s engagement with other companies.
These value creation opportunities should be communicated via simple demo presentations that emphasize the easy integration of the proposed solutions into existing channels. Pilot collaborations with companies are particularly useful for early-stage startups, as they reinforce their legitimacy and help expand their customer base.
mount the right team.
Beyond the start-up founder(s), it makes sense to involve business development and technical experts who can engage company representatives in a fruitful dialogue. Teams composed of both technically competent members (eg, CTOs) and individuals with business development backgrounds are better able to understand how the startup’s technology benefits the business. With the right team, opportunities can emerge that go beyond the startup’s technology and the challenges facing the business. Founders with a strong technical background but unable to explain their technology or applications typically failed to capture audience interest. Teams must therefore have members who can explain potential uses of their services, as well as those who can answer technical questions.
The following list of do’s and don’ts summarizes our observations on how startups can ensure successful first meetings that lead to follow-up and collaboration.
What to do at the first meeting
- Address the existing problems and needs of the company and its industry.
- Customize presentations to individual companies and show how your new startup could help them.
- Focus on easy integration, not your technology.
- Present dummy/use cases to show new value propositions.
- Be flexible and prepare to rotate and co-create if the opportunity arises.
- Bring a team with expertise in technology and business development.
What not to do at the first meeting.
- Don’t just pitch: listen to their current and future needs.
- Don’t use the same pitch for different companies: match.
- Don’t just focus on your technology, show how it will help the business.
- Don’t just send technical staff on a highly technical presentation.
Startups can achieve a desirable level of engagement by first looking at what they know about their corporate partners. Only then should they concentrate on the joint development of products and services. Startups that have customers who can demonstrate how their technology would help the company are almost guaranteed to attract their interest in follow-up discussions. Your efforts should therefore be focused on understanding the company’s value streams, its customers and potential avenues for value creation.
In this way, start-ups can master the challenges of navigating through the often complex internal processes of the company. You can get to know the company and how it works. And they can build on that knowledge to earn an invitation to a second meeting where both teams can focus on innovation.
