Exponential growth focused on solutions and technology has doubled startups' market share in less than a decade.
Corporate behavior and the new way of interacting involve a new model of collaboration with suppliers and startups. When hiring or deciding to build a relationship with a startup, it is important to review concepts such as: governance, culture and mindset, MVP, POC, Agile and other new working methods, transversality, new technologies, budget, and aspects that will be assessed according to the transformation or outcome desired from this partnership.
There are many challenges for large corporations to keep up with market transformations. Innovation and technology focused on solutions and results are the reason why partnering with startups presents itself as a solution.
Understanding the pain point to develop an effective method, taking risks, and shifting the cultural mindset are three fundamental premises.
Unlike traditional suppliers, startups do not have the infrastructure to meet all the bureaucratic requirements that the market demands. This flexibility is essential for establishing a partnership.
Reducing bureaucracy and increasing flexibility are part of this relationship. For startups, for example, there is no traditional “business plan,” and failing is not an option. If it happens, learning quickly from mistakes and correcting them even faster is the logic driven by team collaboration and symbiosis.
With more agile methodologies, startups are not tethered to the core business like large corporations. Another major difference is that corporations operate on annual closes, while startups focus on the perpetuity of tomorrow.
Evolution and Processes
Considering the timeline of interactions and the shifts driven by innovations, it is worth remembering that technology also underwent a process of learning and evolution during the Industrial Revolution, for example.
To innovate, one must understand processes and take risks. Trying to think like a startup can be a way to help drive a mindset shift.
Understanding where a company is missing out on revenue provides insight into how opportunities are being seized by startups, explaining their impactful growth in the market.
Transformations and innovations occurred when companies took too long to recognize external factors. A prime example was the major movie rental chains that were slow to realize the arrival of new streaming technologies. Or photography companies that missed the timing to find a solution to maintain market competitiveness with the advent of digital photography. Blockbuster and Kodak serve as prime examples here, respectively.
One of the evolutions in processes is startups' focus on the user experience! This is the primary mindset shift that must take place.
Learnings and Cycles
The infrastructure of digital ecosystems is ever-changing, just like human relationships. We can consider that the digital transformation has been underway for over a century. Since the invention of the printing press, technology has advanced rapidly, taking major leaps through history.
Keeping pace with the speed of change involves learning cycles where errors are permissible, but correcting them demands agility. In the post-digital era market, we moved from the telescope to satellite monitoring, from the steam engine to hybrid cars, from encyclopedias to search engines, and from cables to Bluetooth technology and Wi-Fi connections. This list only continues to grow.
Computers, technologies, systems, and software increasingly foster interaction, and staying aligned with the timing of these technological developments is part of these new processes and relationship models.
Digital transformation comes in a continuous learning cycle, generating value, revolutionizing diverse business platforms, and guided by experiences that consolidate customer relationships.
Initiatives to build relationships with startups are an effective way to achieve results and develop solutions through new technologies. Supplier relationships are also poised to change. It is worth highlighting, especially for professionals in the procurement sector, that integrating the relationship between startups and suppliers is part of this new learning cycle.
Connections and Investments
Startups' investments are fundamentally built on connections. As companies with innovative solutions that require financial backing, they channel their resources into focused innovation.
Once established, startups influence and even become benchmarks within their specific markets. Focus is their major differentiator. While corporations cling to their core business, startups focus on the solution. With increased visibility, they stand out in the market, add value, and strengthen partnerships with large enterprises.
Identifying the value of a startup and what it will bring to your company depends on the maturity of the solution and technology the startup offers, as well as the feasibility of executing the project, the idea, and the solution.
Before finalizing a partnership with a startup, it is necessary to evaluate the MVP (Minimum Viable Product). The prototype's applicability is also an essential point to consider. From there, the viability of investing can be assessed.
There are many recognized advantages to partnering with startups—from cost optimization to streamlined processes, and much more. However, the true game-changer for businesses is the real, practical opportunity to achieve innovation with greater confidence and accuracy, in less time, thereby gaining greater market share and business control.
Some key points to consider when establishing this connection to safely shorten the path forward include:
- Consciously adapting to the new mindset.
- Speaking the language and understanding the context.
- Managing expectations and having a clear understanding of the metrics and goals intended for the partnership.
- Eliminating bureaucracy and establishing a healthy, consistent pace.
- Maintaining the involvement and commitment of the company's C-level leadership (otherwise, communication breakdowns may occur during the process, hindering results).
- Treating the startup partnership as a strategy rather than the sole source of innovation, keeping in mind that limitations exist.
The cyclical change of the 20th century followed the logic of continuous efficiency improvement. The transformation of the 21st century, however, is rapid and exponential, shifting paradigms and enabling major leaps in technology and innovation.
The objectives of forming a partnership with a startup, like any corporate initiative, must be strategic. The startup journey typically follows four stages: ideation, validation, growth, and scale. In the growth stage, the idea is validated with a tested prototype, requiring funding from professional investors. In the scaling stage, the startup is developing processes to initiate exponential growth as a business and establish itself in the market—an ideal moment to forge a partnership.
Success Stories
Large, legacy companies often struggle to implement innovative concepts. Shifting the mindset is paramount. In the financial market, for instance, Nubank is a prominent example of innovation gaining market share at a rapid pace. Founded in 2013, within five years it was recognized as one of the world's leading companies in its segment.
In the search for innovative solutions, banks partner with startups to expand operations and identify potential M&A opportunities.
To expand its footprint in the agribusiness market, for example, Banco do Brasil has invested in relationships with startups focused specifically on this niche, leveraging their sector expertise to deliver targeted solutions. This relationship functions as a two-way street.
Considering the concept of disruptive innovation, other case studies clearly illustrate these transformations. Apple, Amazon, Facebook, Google, Estácio, Natura, and BASF are just a few examples.
