COVID-19  •  Analyses & Studies

Collaboration between start-ups and corporates: opportunities in times of coronavirus

‘Unprecedented. New normal. Once in a lifetime.’ Those are the oft-heard clichés of our times. But they are nonetheless appropriate to describing the impacts of the outbreak of coronavirus on the start-up ecosystem, and by extension, how entrepreneurs and start-ups are working with larger corporations and organisations.

A recent meeting of the French Chamber’s Start-up Club brought together two representatives of London-based accelerators and an entrepreneur to discuss how to foster relationships between corporates and start-ups, including how to create new revenue streams and how to find new customers together.

According to Richard Hammond, founder of UnCrowd, a tech start-up which measures customer preferences in the retail space, the first challenge for any start-up in a period of disruption is to secure the business. This means having a firm understanding of costs and where your support is coming from, including making use of government support to keep operations afloat.

The next stage is to review every aspect of your current offer to see how you can adapt to meet the immediate – and changing – needs of your clients.

‘At the outset of the crisis, as group of founders of start-ups working in retail got together, and we realised that our clients were experiencing a similar urgent need to do more online, and that this was sucking away from other conversations.’

This meant that looking for paying clients was no longer the priority and Hammond began to provide his platform for free on a temporary basis to his existing clients.

‘We need to help each other get through this crisis,’ says Hammond. ‘Some of our clients might convert to a paying license in two months’ time. But we are not thinking about the conversion right now – we are thinking about their needs, swallowing some costs in the short term, and build to the future together.’

Opportunities

‘Many of the larger corporations went into panic mode at the outset of the crisis,’ says Andrew Humphries, co-founder The Bakery, an accelerator which connects corporations with innovative start-ups. This mean that they saw collaborating with start-ups at this time as a risk.

Humphries and his team put together a series of reports which showed their clients a range of off-the-shelf solutions to their immediate challenges being offered by start-ups across sectors.

According to Humphries, coronavirus has been a catalyst for large corporates to change their routes to market and business models. ‘They want to understand how they can get closer to customers and compliment their traditional offers – and there is less resistance internally to get this done,’ says Humphries.

From a start-up perspective this means that start-ups have opportunities to help create big umbrella solutions for customers, including in logistics, AI, healthcare and range of other tech arenas.

It’s a view echoed by Rachel Peck, Global Lead Start-up Business Development at Microsoft, who noted that perceptions around innovation and digital transformation within larger businesses has undergone a sea change since earlier this year.

‘If we pause and go back to December and January, the perception was that innovation was needed but companies were unsure about the direct impact on business,’ says Peck. ‘Now it’s clear that digital innovation cannot be ignored – or pushed to next year – it is the here and now.’

Peck offers three models used at Microsoft for start-ups to sell to corporates. The first is a question of scale: how can you transact and deploy your solution at scale in a marketplace? The second is about selling through partners, from accelerators to systems integrators. And the third is engaging directly with customers and clients to make sure that their needs are understood in these challenging times. 

A consensus immerged from the meeting that partnering at this time is not only beneficial to corporations and start-ups, but that it is crucial to survival.

The Start-up Club session was organised by the French Chamber with Early Metrics, Microsoft for Start-ups and The Bakery.