Over the past two years, spurred on by the restrictions and challenges of Covid-19, digital transformation has taken centre stage. Accordingly, significant opportunities are opening up for startups to take on projects with large companies that want to develop innovative digital products to take advantage of emerging market opportunities; but lack either the capacity or nous in-house to deliver in a timely, high quality, or cost-effective manner.

How can these partnerships benefit both parties?

For those of us who are involved in startups of any level, and are navigating working partnerships with businesses operating on a much larger scale, there is naturally a great deal to learn and be aware of before heading into such collaborations. For instance, founders should consider why exactly a blue chip brand would seek out help from a smaller agency. For me, established enterprises are typically drawn to working with startups become they wish to behave like startups – lean, agile, and market-sensitive.

It is also standard in upscaled businesses to have an in-house tech team, who are concentrated largely on keeping core platforms ticking over, and instituting small evolutions over time. Accordingly, there is often little excess resource to commit to breaking completely new ground, despite big brands typically being keen to invest in digital transformation and innovation. And so, the startup enters to deliver an essential service in parallel to their broader operations.

The startup culture, when compared to larger businesses, lends itself well to the development of tech products in the modern ecosystem. Naturally, given the difference in scale in any partnership of this kind, there are some cultural differences which will need to be compromised – though this should not come at the cost of an equitable and fair arrangement.

In fact, startups partnering with blue chip brands should treat them no differently than if they were a small and medium business (SME) client: bringing ideas to life, at pace, to a high standard, and at a measured cost which will allows for feedback, failure, and experimentation. By refining internal processes to rise to the challenge of a partner on a greater scale, and establishing a meaningfully value-adding relationship, startups stand to benefit from partnerships with big brands in more ways than simply financially.

Adding value

For me, one of the most exciting aspects of working with a blue chip brand is the transformative impact the work can have. As previously discussed, there is often a somewhat contrary lack of in-house resource and capacity for big brands to develop truly innovative and valuable products on top their existing offering.

The difference in value can be seen when working with a startup, where the intent and desire to develop transformative products is universally present, but the customer base or problem set is not scaled to a level where a high-quality digital platform can have a substantive impact. Even if the product turns out great, it still may not attract the customers to merit further experimentation. This is not to say that working with startups lacks advantages, or that partnering with big brands is always preferable – both have their own unique set of challenges and advantages, and in any case the experience brings a lot of value back into the agency.

The most important thing for leaders in startups to note in these cases is to always look for a ‘win-win’ scenario. Naturally, each party will bring something different to the table, and benefit in different ways from the experience. In practice, this should involve taking a more holistic view than the transactional perspective, which takes in only the work delivered and the cost at which it was performed.

Instead, founders should think about what they want from any partnership, what they can provide, and the cultural ways in which that creates a meaningful ‘value-add’. By looking deeper than the matter-of-fact give and take of the relationship, startups can take advantage of how the added value will strengthen their own brand, and align and supplement their strategic positioning.

The cultural differences at play when working with large businesses might, to some founders, appear undesirably opposed to the dynamism on which their startup thrives. Of course, partnerships between distinct businesses will require careful planning and a sensible approach to aligning aims – and this is true of businesses collaborating at any scale. With a considerate approach to the needs and processes of the other partner, startups can find these co-operations to be enriching and value-adding, and gain strategic insight which will prove critical when evolving their own processes as they scale up.