Photo by William Bout on Unsplash
Startups and large corporations need to work together, but that is not easy. Some pointers today for that. And yes, as usual, I will be looking via the contract management view….
Are you currently navigating the tricky waters of managing the relationship between an innovative startup and a big corporation?
Tip #1: Clearly define the goals and expectations of both parties in the contract. This includes outlining the scope of work, timelines, and deliverables. This will avoid any confusion or misunderstandings down the line. This scope does not need to extremely clear on activity but it should be extremely clear on the desired outcomes.
Tip #2: Establish communication protocols early on. Both parties should have a clear understanding of who they need to communicate with, how often, and via what medium. This ensures that everyone is on the same page and that there are no surprises. Remember that the entrepreneur / founder has a very specific idea and has full autonomy to make all kinds of discussions, dealing as a corporation means you probably need to assign a senior executive with enough authority early on. That should not be the problem because this is unique and innovative right? 🙂
Tip #3: Build in flexibility. Startups are known for being agile and adaptable, while corporations can be more rigid. Make sure the contract allows for changes to be made in the event of unforeseen circumstances or a change in direction. This includes understanding that the exact scope and outcomes will be a variable. Manage for the unexpected.
Tip #4: Protect your intellectual property. Ensure that the contract includes provisions that protect any proprietary information or technology owned by the startup. Too often I see large corporations wanting to own the IP, that’s not the way forward, claim a right of usage.
Tip #5: Have an exit plan. While no one wants to think about it, things don’t always work out. Be prepared with a clear plan for terminating the contract if necessary. Be fair in advance, yes the startup takes an entrepreneurial risk but does that mean they need to pay for everything if it doesn’t work?
In summary, managing the relationship between an innovative startup and a big corporation is all about clear communication, flexibility, protection of intellectual property, and having a plan in place. Don’t let the excitement of a new partnership blind you to the importance of contract management!
Want to talk about this? Talk to Pieter Paul van Oerle or Marco van der Werf or Ocean Conijn they will tell you what the right mindset is to get innovation flowing between a startup and a corporation, ask Linda Tonkes if you want to understand how to make the relationship work.
Arjen van Berkum
Arjen van Berkum is a columnist, keynote speaker and motivator, with an eye for business ecosystems, innovation and disruption. In addition to his work as technology and contract management evangelist, he is a visiting lecturer at Delft University of Technology (TU Delft).
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