‘The future of innovative partnerships’ - How can large global corporations and startups form successful collaborations?

Abstract: Startups have emerged as an important source of innovation, since the move from closed to open innovation, disruptive innovations have received more attention, and more actors are starting to engage with startup activities. Previous examples can be seen of large corporations moving from being leaders in their industries to not even being here today that have contributed to many large corporations feeling a sense of urgency to work more with innovation and external actors, such as startups. In this thesis, the relationship between large corporations and startups that are engaging with each other is investigated qualitatively, by making a case study of Company X, a large corporation in an industry going through a rapid transformation. An industry that consists of long and rigid processes shaped through decades of heritage and knowledge, creating difficulties now that a new approach is needed. The researchers are taking the startups perspective on the engagement putting them in the driver's seat. The scope of the thesis was defined by engaging in a pre-study in which the researchers interviewed employees at Company X and the CEO of a local startup, resulting in the literature and themes used for investigating the relationship. Using the preferred customer theory as a base for the research and approaching the startups as suppliers but making a distinction by referring to them as partners to grasp the uniqueness of the engagements. The researchers interviewed twenty people in total inside Company X and different startups and analyzed the material through the usage of thematic analysis. The findings show that there are many challenges for these two actors in order to engage in innovation activities, mainly due to the different nature of the organizations and a lack of understanding for the other party. Difficulties in many cases originate from the difference in size, structures, time-frames, and culture, which creates a need for finding common ground, to bridge the gap between the two worlds and overcome the challenges. The researchers found that the preferred customer theory can be used to describe how to be a preferred partner of startups. However, significant differences are found in what the startups valued as the most important. Startups express a wish for genuine engagements, understanding, adapted processes, high-quality communication, and value. Moreover, the researchers found that large corporations making the effort of becoming the preferred partner of startups and ease startups ways of working with them can enjoy benefits in the form of preferential treatment, ranging from exclusivity to benevolent pricing.