For start-ups, even getting a first 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 start-ups and companies such as IBM, Sony, SAAB, L’Oréal, Scania, Toyota and AstraZeneca. Our observations led to the identification of five best practices to help start-ups generate interest from companies to collaborate after the meeting: 1) Have clear but flexible goals; 2) Respond to 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 chief executive Anna Farberov shared her frustration with the strategic mistakes start-ups make when approaching companies. Having attended 3,500 such meetings, she felt she had the expertise to detail their mistakes. However, the reaction to his post was harsh, with employees and start-up founders keen to point out the issues they face when approaching companies. Both parties clearly wanted to collaborate. But they struggled to find ways to commit to successful and lasting engagements.
For start-ups, even getting a first meeting with a company can be difficult, let alone establishing a partnership. Cold calling is a lottery. Companies are a “black box” for outside contractors, and it can be difficult to get in touch with decision makers. As one serial (and fairly successful) entrepreneur told us, “I couldn’t even walk into their office, let alone start a collaboration.” If even experienced entrepreneurs struggle to get the opportunity to collaborate, one can only imagine how difficult it must be for newbies and start-ups.
Initiatives such as “speed-dating” events, where several start-ups make presentations to company representatives, can facilitate the process. At such events, often organized by intermediaries, corporate “scouting teams” seek to generate a flow of ideas, technologies and solutions for the business. Despite these efforts, start-ups are still unlikely to take advantage of this crucial first encounter.
In the first meeting, early-stage startups need to generate enough interest to get a follow-up meeting. A good performance during this first interaction is essential. There are usually no second chances. But how can start-ups win that critical second meeting?
To answer this question, we attended 150 one-on-one meetings between start-ups 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 start-ups with large corporations. Our observations helped identify the best ways for start-ups to generate interest from companies to collaborate after the meeting. The following best practices have helped the startups we’ve observed secure that all-important second meeting.
Have clear but flexible goals.
Depending on their stage of development, a startup’s goals may include collaboration on a proof of concept, pilot project, sale, or co-creation of products. A start-up with clearly stated goals helps the company see opportunities for engagement. This may lead the company to come up with alternatives that a flexible startup could use to exploit unforeseen opportunities.
For example, a game start-up, Attractive Interactive, has adapted its technology for SAAB to help pilots land in difficult weather conditions. The company’s COO said, “It was exciting to apply our game development knowledge to brand new problems.” This collaboration would have been unimaginable for Attractive Interactive before its meeting with SAAB. Not all startups need to pivot in this way, but those that do may see potential they hadn’t considered before. So, clarity with flexibility is a virtue.
Respond to existing problems and needs.
Start-up team members should understand the company’s needs in sufficient detail before the first meeting. Such preparation may simply involve browsing the company’s website and industry-related materials before the pitch. This aligns solutions with existing business efforts to create customer value by improving current processes, products and services.
In one example, Toyota Material Handling collaborated with IPercept Solutions, a tech start-up that provides AI services for tracking industrial machinery. During the first meeting, IPercept was able to show how its solutions closely match the needs and ambitions of Toyota Material Handling. Implementing these tools has radically improved the latter process, according to Mattias Dahlgren, maintenance manager at Toyota Material Handling.
This example shows how start-ups that solve existing problems and offer innovative solutions can make themselves indispensable to companies.
Address ease of integration and collaboration.
Start-ups must know how to integrate their products into existing business processes. The startup should make it easier for the company to engage with them by first understanding their current workflows.
A start-up has created a machine learning algorithm to help Alfa Laval, one of the world’s leading providers of heat transfer, separation and fluid handling, accurately assess when its heat exchanger needs cleaning. Thanks to this collaboration, the company, founded in 1883, was able to deploy intelligent heat exchangers despite its lack of expertise in this field.
Present use cases and new value propositions.
During the meeting, the start-up must show how it would create new value for the company and its customers. One approach would be to talk about a fictional business-specific use case. Alternatively, real use cases based on the startup’s engagement with other companies could be showcased.
These value creation opportunities should be communicated through simple demo presentations emphasizing the ease of integration of the proposed solutions with existing channels. Collaborative pilot projects with companies are particularly useful for early-stage startups as they increase their legitimacy and help expand their customer base.
To assemble the right team.
Beyond the startup founder(s), it helps to involve business development and technical experts who can engage company representatives in meaningful dialogue. Teams made up of both technically competent members (e.g. CTOs) and people with business development experience are better able to understand how the startup’s technology benefits the business. With the right team, possibilities can emerge beyond start-up technology and business challenges. Founders with a strong technical background but who could not explain their technology or its applications generally failed to generate public interest. Teams should therefore include members who can explain the potential uses of their services alongside those who can answer technical questions.
The list of do’s and don’ts below distills our observations on how start-ups can ensure successful first meetings that lead to follow-ups and collaboration.
What to do during the first meeting.
- Respond to existing problems and needs of the company, as well as those of its industry.
- Tailor presentations to individual businesses and show how your new start-up could help them.
- Focus on ease of integration rather than your technology.
- Present fictional/use cases to show new value propositions.
- Be flexible and be prepared to pivot and co-create when the opportunity arises.
- Bring a team with expertise in technology and business development.
What not to do during the first meeting.
- Don’t just present to them: listen to their current and future needs.
- Don’t use the same pitch for different companies: personalize.
- Don’t just focus on your technology, but 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 engaging with what they know about their business partners. Only then should they focus on co-creating products and services. Startups that have customers who can demonstrate how their technology would help the company are virtually guaranteed to get the company’s interest in follow-up meetings. Their efforts should therefore be aimed at understanding the value streams of the business, its customers, and potential ways to create more value.
This way, start-ups can overcome the challenges of navigating the often complex inner workings of business. They can get to know the company and its working methods. And they can build on that knowledge to receive an invite to a second meeting where both teams can focus on innovation.