Munich Startup: Why does it make sense for companies to work with startups?
Carsten Rudolph: The reasons are manifold – one of the most important is that industrial companies are constantly working to position themselves for the future. This future security is only partly based on existing business and its further development. It is becoming increasingly important to pursue completely new ideas and approaches. This requires a look outside. For example, to institutions such as universities, entrepreneurship centers, research institutes or even networks such as Baystartup – Contacts with these players are crucial in helping established companies assess the world of startups and their thinking. And, of course, they also get to know good startups early on.
Munich Startup: What is the big advantage of an established company compared to a startup?
Christoph Rommel: Established companies have a particular advantage when it comes to market access. They have established a sales structure, controlled production, and established contacts within the industry—they simply have a company history to look back on and draw on. Startups typically start from scratch and must use the appropriate tricks and gimmicks to enter the market.
Munich Startup: What are the advantages of a startup over an established company?
Carsten Rudolph: The greatest challenge is also the greatest opportunity: Startups have no company or market history yet and don't have to take that into account. They first have to invent and reinvent their business model, can fully focus on "the new," and have the opportunity to achieve great things with the latest technologies. They can consciously ask themselves where gaps exist in the market, exploit them, and become highly successful with new opportunities at the right time. Of course, it's important to work with partners or potential customers early on to determine whether an idea will actually work.
Partner instead of investor
Munich Startup: To what extent can cooperation between startups and established companies help – or is it more about competition in the market?
Carsten Rudolph: Of course, there's always competition in the market. But there are also almost always many opportunities to achieve more together. Startups can act as suppliers or contribute to the innovative power of SMEs as technological partners. This doesn't require investments, as is often assumed – the established company is simply a customer or partner. This is where Baystartup comes in, because the potential of collaboration with startups is often underestimated.
Munich Startup: Why does Baystartup promote collaboration between startups and industry?
Carsten Rudolph: On the one hand, we see strong interest from both sides, and on the other, the topic furthers our goal of accelerating the entrepreneurial development of startups. And, based on our close support of around 500 startups in Bavaria each year, we have a very in-depth knowledge of the startup scene in a wide variety of industries.
Munich Startup: How do you implement cooperation projects?
Christoph Rommel: We actively connect industrial companies with suitable startups and aim to specifically encourage them to collaborate with startups. We have developed a range of services around industrial collaborations that also targets SMEs with fewer than 1,000 employees. It is often difficult for them to hire startup specialists or even set up their own accelerator.
Munich Startup: What are the problems for startups when it comes to collaborating with established companies?
Carsten Rudolph: Startups often find it difficult to identify and then establish contact with potential partners from medium-sized businesses, in addition to large DAX-listed corporations. Furthermore, startups often have overly high expectations, firstly regarding timelines, then regarding decision-making structures, and also the paths of potential collaboration. Simply presenting their own product doesn't trigger an established company's ideation process about what they can do with it. Here, the startup itself is called upon to come up with creative proposals that fit the larger partner's business model.
Cold Lead or Hot Lead
Christoph Rommel: To ensure that startups are well prepared for discussions with established companies, we have developed our Coaching offers Overall, it is more focused on collaboration between startups and industry. For example, in our online tutorial "Collaboration with Corporates," we teach simple tools on how startups can contact established companies in the B2B sector, what customs apply here, what the typical expectations of established companies are, and how startups can professionally prepare and follow up on contact so that, ideally, a collaboration or contract results. Furthermore, we show which metrics they can use to determine whether it is a cold lead or hot lead is.
Munich Startup: In your experience, what is needed on the company side for good collaboration?
Christoph Rommel: Firstly, it is important that I, as a company, engage with the technologies used by startups – in the spirit of classic benchmarking or competitive observation. Secondly, a sensible innovation strategy makes sense, one that relies both on innovation from within the company, i.e., from within, but also on innovation from outside. This requires a willingness to try to develop innovations with external partners such as startups. Thirdly, I need sufficient human and financial resources. Top management should commit to startup engagement. And last but not least, it is important to approach the topic long-term. Ultimately, as a company, I should embrace the dynamic structures of startups and plan sufficient time to establish an open and aligned corporate culture.
