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Why Multinationals and Startups Gain More by Working Together

Published 8 October 2018

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According to a Boston Consulting Group study, 95% of startups wish to develop long-term partnerships with corporations. A recent Bain & Company research shows that a relationship with a large company positively impacts the growth of young companies in 93% of cases. Furthermore, a 2016 MassChallenge & Imaginatik report revealed that 82% of large companies now view interactions with startups as important, and 23% say it is “mission critical” to their business.

Even though the relationship between big multinationals and startups is not always straightforward, the enormous benefits of working collaboratively should not be dismissed, especially since doing so often results in a win-win for all concerned. While multinationals are considered financially stable, they are often slow to innovate and generally risk-averse. On the other hand, startups tend to operate in chaos and depend heavily on funding, but they are far more adept at enduring and thriving in digitally disruptive climates.

In order to have the best of both worlds, an organisation would need to learn the lessons of its contenders, with big business adopting innovative approaches such as lean methodologies and startups hiring talent from large multinational corporates. There does, however, exist another more practical solution and this involves collaborative partnerships.

Indeed, from the perspective of the entrepreneur, multinationals are attractive sources of capital, early customers, and market access. In exchange, multinationals get access to innovative products and services and lower investment risks, as venture-funded startups establish new markets and are acquired when mature.

There are many different examples of this. Take, for example, AOL’s startup incubator Fishbowl Labs; their model is simple – to support startups with the resources necessary to operate, from everyday workspace to auditoriums for hosting big events. Alternatively, Samsung’s Strategy and Innovation Center, which invests its capital and expertise to help innovators find solutions within the world of connected devices. Or even GE Ventures and DBS HotSpot – incubators that partner with startups interested in advancing industries and turning great ideas into reality.

In a new video series entitled HCLI Trailblazers, which launched at the Singapore Business Leaders Programme in May 2018, some of Asia’s foremost thinkers, leaders, and innovators, shared their views on trending topics as they relate to Asia, including how the broader ecosystem can support and work with startups.

Magnus Grimeland, for instance, Founder and Chief Executive Officer of Antler – a startup generator with a global mentor network – shares some deciding factors when it comes to supporting startups:

While Venture Capitalist and Founder of K2 Global, Ozi Amanat, talks about what investors look for in tech startups:

The HCLI Trailblazer videos are produced by the Human Capital Leadership Institute (HCLI), a subsidiary of Temasek Management Services, which is wholly owned by Temasek Holdings (Private) Limited and is supported by the Singapore Ministry of Manpower and the Singapore Economic Development Board.

To watch other HCLI Trailblazer videos, please visit our HCLI Youtube channel here.