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Partnerships for Open Innovation – Tackling the issues of how startups can work with large companies
By Ruth Thomson - Last updated: Thursday, April 22, 2010Open Innovation is a large company concept isn’t it? Yes, but large companies will be looking to partner with early stage companies as part of their Open Innovation (OI) strategy. Therefore this is an essential topic for startups who need to understand how to make the most of OI and to help them form partnerships with large companies. This was the topic discussed at the Institute for Manufacturing in Cambridge on Tuesday.
The workshop, entitled “Open Innovation for small firms: how to set up and manage collaborations with large firms” was a well attended and lively session. Tim Minshall and his colleagues at the IfM have done a huge amount of work in this area and this was an opportunity to build on this work and disseminate their ongoing findings to the broader community.
I’m a visiting Industrial Fellow at the IfM and have hands-on experience of this topic from my time as Innovations Leader for Kodak European Research, so it was great to be able to help out at this workshop.
In the morning we heard from Chris Moore, now at UKTI and formerly of Kodak, and Billy Boyle from Owlstone, giving both a large and small company perspective and sharing the lessons they’ve learned. Patrick Farrant of Taylor Vinters discussed the IP and legal aspects in managing partnerships and Clennell Collingwood from TTP Ventures gave the investor’s perspective. The presentations and discussion were very pragmatic providing the participants with real practical advice.
I particularly liked the Owlstone story where Billy gave a very honest view of his experiences. His use of video in the early days to convey Owlstone’s vision for their future products was very reminiscent of the discussion about the value of demonstrators at our startup workshop last week.
The importance of understanding partnering was made even more compelling when Clennell Collingwood pointed out that “partnerships are a necessity” for growth, and that, even if the money were unlimited, it would take too much time and be too risky to grow a fully fledged company in isolation. Also, in the current climate, the vast majority of startup exits are from trade sales not IPOs. Partnerships clearly have a significant impact on this exit route – both opening up, and potentially risking closing off, exit options.
In the afternoon we divided into groups to discuss in more detail the challenges of aspects such as contracts and IPR, funding, and culture. I facilitated the group looking at the cultural and communication issues facing startups who are attempting to partner with big companies. How do you get on their radar in the first place? How do you tell your story effectively? Large companies work with intermediaries to identify opportunities so how do you make this most of this? And then once you’ve succeeded in getting in-front of a representative from the company, how do you ‘hook’ them so that they will be an ‘internal advocate’ for you? It is clear that the large company’s timescales will be much slower than yours and you will feel the pain in any delay much more than they will, so it’s important you help your internal advocate to ‘sell you’ internally, and push to move the conversation forwards.
A lot of ground to cover in a short time, and there are no easy answers – but work is ongoing at the IfM on this so watch this space. It was an intense but enjoyable session. Plus we almost had a royal visitation as The Duke of Edinburgh was next door opening the Hauser Forum!
More later on Wednesday’s session, when the event focused on the larger company perspective.
How do you implement Open Innovation? » Consumer Products Said,
April 25, 2010 @ 7:38 pm
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