Innovation at Scale- How Startups and Big Businesses Can Create Win-Win Partnerships
March 2020, the Prime minister calls for a complete nationwide lockdown. The COVID-19 pandemic has brought the entire country to a standstill, with the streets eerily silent and businesses shut down. Life, as people know it has been turned upside down, with individuals confined to their homes, schools, and universities, closing their doors, businesses struggling to stay afloat amid the economic downturn, and people facing the harsh reality of job losses.
Yet amidst that chaos and uncertainty, there’s one story that shines through, a story of innovation, collaboration, and breakthrough. It involves an unlikely partnership between a German startup and a 173-year-old multinational corporation, coming together and collaborating to find a solution to the disruptions created by this global pandemic. The Pfizer-BioNTech COVID-19 Vaccine was a result of this collaboration between startups and big businesses, both using their respective strengths and coming together to provide a solution to the needs of the market.
BioNTech provided its technical knowledge on mRNA molecules while Pfizer brought their years of experience in manufacturing it on a large scale and distributing it to the world.
We know that startups thrive when disruptions create new opportunities for innovation and growth. Over the past few years with disruptions such as the covid pandemic and lockdowns, changes in technology, market conditions, geopolitical issues, and supply chain constraints, startups have been able to quickly pivot their business models and strategies to adapt to the changing market landscape and provide innovations at scale.
They are willing to take risks and think creatively to capture market share. They take advantage of new technologies or business models often using them to build from the ground up, using these new technologies to give them a competitive edge over other companies.
They are characterized by their agility, creativity, risk-taking appetites, and their ability to drive innovation. They are often at the forefront of developing new technologies and products that can disrupt established industries and markets, creating new opportunities for growth and development, and playing a crucial role in creating jobs and promoting entrepreneurship, particularly in emerging markets or sectors. Startups thrive in areas of market disruption because they can identify and seize new opportunities that arise from these disruptions. They are more agile, flexible, and willing to take risks than larger, more established companies.
On the other hand, Big traditional businesses are established companies having typically achieved a significant level of success and stability. They often have established processes and systems like supply chain management, customer service, and marketing in place that can help them operate more efficiently and effectively in the market landscape.
They can leverage their resources and financial stability to invest in research and development, acquire new companies or technologies, and expand into new markets. They provide stability and employment and often have a large customer base with established distribution channels and can operate on a much larger scale.
They have a well-known brand and reputation that helps them attract customers and compete with other companies more effectively and an existing customer base that they can leverage to generate revenue and grow, providing a level of stability and predictability that startups may not have.
Although it may seem that big traditional businesses and startups lie completely on opposite sides of the business spectrum, by coming together, interacting, and collaborating, big businesses and startups can create a win-win partnership, sharing their ideas and best practices to create a symbiotic relationship, rooted in innovation, that allows them to leverage their unique strengths, grow together, and find out novel solutions to the problems they’re facing.
Big businesses can provide the necessary guidance and stability that startups critically need giving them access to financing, customer data, and their establishes processes, while startups can help the big businesses innovate, stay ahead of the competition, navigate market disruptions, and access new technologies. They can help them transform their work, increase their agility, and even give access to talent acquisition.
The Indian government has undertaken various programs to promote startups under the Startup India initiative across the country such as The Action Plan comprising 19 action items spanning areas such as “Simplification and handholding”, “Funding support and incentives” and “Industry-academia partnership, and incubation, the Fund of Funds for Startups (FFS) Scheme, with a corpus of Rs. 10,000 crores, to meet the funding needs of startups and the Credit Guarantee Scheme for Startups (CGSS) among other initiatives.
With all these schemes bearing fruits and the country seeing phenomenal growth in the number of startups and unicorns, India now has the 3rd largest startup ecosystem in the world, expected to witness consistent annual YoY growth of 12-15%1 with startups capturing a large market share. To further promote growth in the sector and help startups find the stability and security they direly need to survive in the initial years, we must also work on promoting collaborations between startups and big businesses.
The government can do so by creating networking opportunities like events and conferences that include panel discussions, workshops, and networking sessions, that bring people together and encourage dialogue and collaboration. Additionally, we can establish innovation hubs that bring together startups, big businesses, universities, and research institutions, to offer access to funding, mentorship, and further networking opportunities.
The partnership between startups and big businesses can create a win-win situation for both parties by leveraging their unique strengths and unlocking greater gains for the market. Such collaborations will enable startups to find the stability and security they need to survive in the initial years, promoting growth in the sector, and prosperity for the populace.