Open Innovation Works

Making Any Startup Engine Work: Be Founder Friendly!

Photo of a large active elephant facing the camera on a dark and stormy day

In these elephant-and-mouse relationships, as the elephant, you need to be careful not to step on your mouse. That’s easy to do and hard to recover from. And it’s not just for the mouse’s sake. In an environment of dynamic change open innovation is necessary for long-term corporate health. You need to know:  The mice all know each other. Startup founders will ask your prior partners what it was like to work with you. If you develop a reputation for squishing mice, that’s the end of your ability to partner with them, and the end of your ability to use startups to help you reach into the future. 

To be founder friendly, there are really just three commandments:  Thou Shalt Communicate, Waste Not Thy Partner’s Time, and Bring Only Joy with Thy Brand.  Here’s what that means in practice:  

Thou Shalt Communicate:

  • Be findable. Make it easy for potential partners to find the person or process that can bring a partnership forward.
  • Be responsive. Tell founders your time frame for response, and stick to it. Reach out if you run into delays. Say no when you mean no. Say yes only when you mean yes. Provide feedback, even to founders you’re not going to partner with.

Waste Not Thy Partner’s Time:  

  • Pay for time and materials. Often you’ll need a look at what the partner can do before you can commit to anything significant. If your partner needs to spend significant time preparing specialized materials or versions of something just for you, compensate them. It’s great for your reputation and costs an amount of money that matters for them and is a rounding error on a rounding error for you (likely in the hundreds or very low thousands of dollars). You can put this on a company credit card, no procurement process required.
  • Know what processes your partner will face in working with you. This is an important one because corporate innovation teams turn over frequently. A brand new innovation leader might not know what they don’t know about partnerships, for example, how long the vendor process takes or whose signatures are required. Onboarding a new vendor can take months, even up to a year — and a startup can die for lack of funds in that time. So it’s imperative that the innovation team knows what to tell their external partners, in advance. Better yet, develop a fast-track process for startup partnerships and get them paid on time.   

Bring Only Joy with Thy Brand

  • Be aware and intentional about the impact of your brand on your partners’ ability to function with investors and in the market, especially if you’ll appear on the cap table as an equity owner.  Consider carefully: Is it good for your partner(s) to have a strong association with your brand? Will it open doors for them or provide credibility? If so, speak freely about your partnership, give your partner permission to do the same and provide access to your brand assets as they do. On the other hand: could a strong association with your brand cause problems for your partner? For example, if you take a large equity stake in the startup, could that chill attention from competitors who might also invest? Or from general investors who think you’re there to acquire the startup at a discount? Let these considerations shape what you do with startups and how you talk about them.
  • Wield exclusivity carefully. It’s Ok to ask a promising partner to focus on you — but with limits. Keep your exclusivity demands in check so your partner can continue to grow. Limits to consider:  Time (make it temporary), regional (for a limited time, ask to be the only partner in your region – city, state or country for example), industry (for a limited time, ask to be the only partner in your industry).