Trent McAree had a vision for a business selling smoothie fruit bowls, but to make a go of selling organic acai blended with fresh tastes, whole fruits and flax and chia granola, he needed a location.
So McAree teamed with the DI Coffee Bar on Tampa’s Davis Islands. He carved out a small corner in the shop and applied his wares, taking advantage of a steady location in a popular strip mall. Meanwhile, the coffee bar got to expand its options.
Now McAree will replicate the model at a South Tampa yoga studio where participants will surely look for a healthy snack after wrapping up a session in the lotus position.
In the end, a win-win for both, and another example of how a collaborative effort can work for a start-up business.
These days, collaboration in the business world most often refers to corporations working with startups. Startup Bootcamp, a global accelerator group, estimates that 70 percent of startups have done business with larger corporations.
Yet collaboration also can involve teaming with another startup or enhancing the effort with experts from a specific field. Either way collaboration remains a key tenet for entrepreneurs.
In short, teamwork can make the dream work.
Here are five reasons every start-up should explore collaborative possibilities, and five ways how they can make it happen.
Why It Works
1) Puts the Start in Start-Up
McAree’s story perfectly illustrates how collaboration can lend advantages to a start-up. He knew he had a marketable product, but how could he go about making it happen while minimizing overhead. Yes, he sacrifices a bit of control, but the coffee shop bridged the divide. The same can be said about other businesses. A start-up desire to connect with a larger corporation may be rooted in a desire to sell the company. Startup Bootcamp estimates 45 percent of start-ups are looking to be purchased by corporations. On the other hand, start-ups may simply be seeking a partnership to help grow the company.
2) Sharpens the Sales Pitch
The pursuit of a corporate partner can help the start-up perfect its sales pitch for actual customers. Just as the entrepreneur must perfect the “why” in capturing the interest of prospective buyers, he has to do so in reeling in a corporate partner. Keep in mind however, the product, app or service doesn’t have to be perfect before you begin to showcase it and look to entice partners. Tampa businessman Chon Nguyen says some focus on making the product perfect or pretty, instead of functional, and never get the business off the ground. Once the partnership is established, the corporate partner can use its experience to help the start-up enhance the pitch.
3) Enhances the Product
The collaborative partnership can help the entrepreneur improve on the product or service they hope to peddle. Nguyen grew his interest into multiple computer-related businesses, but then a friend working in the restaurant business reached out to him about a dilemma. They needed a way to distribute recipes to multiple restaurants in the chain, and paper wasn’t cutting it. Nguyen developed a digital system where the recipes could be reviewed on screens in the kitchen, but Nguyen said they needed to collaborate with the restaurateurs and kitchen staff to perfect the product. “We’re technologists, not chefs.” The partnership came up with the answers and now his company, FusionPrep, provides its system to more than 1,000 restaurants.
4) Brings it to the Market
Partnering with a company or angel investor can be the key to growing a business or increasing the distribution of the product. Mulberry’s Johnny Carter recognized a breakthrough in 2017 when Publix picked up his Johnny B Brown Bar-B-Que Sauce. The deal not only allowed him to sell more sauce, but according to a report in The Ledger newspaper it made it possible for him to partner with a packing company in Clearwater to help deliver his brown, hickory-flavored sauce. It’s a classic example of scaling up, and it harkens back to Nguyen’s advice about functionality over perfection. The larger corporation or collaborative partner can help with the perfection aspects. Make it functional.
5) Creates a Win-Win
The collaborative effort works best when it creates a win-win, but a mutual beneficial relationship often requires a strategic fit that goes beyond a general interest. It’s not just about finding a company with deep pockets. It’s about connecting with a corporation that can truly use your product or service to remain innovative. The startup should look for a company that really could benefit from what its offering and aligns with its values.
How to Make It Happen
1) Make the Connection
Networking remains an important part of any start-up’s path, and it goes beyond attendance at traditional events or joining the chamber. The tech community particularly offers several ways for startups to garner interest in their entrepreneurial ideas, including events specifically designed to connect new companies with established corporations looking to innovate through a start-up. While those approaches remain viable, it also helps to utilize the latest technology. Nguyen suggested using LinkedIn to target specific companies who might benefit from the product.
2) Do Your Homework
The start-up entrepreneur must be a knowledge expert about the targeted field, and he must understand the culture of the specific companies he targets. Nesta, a global innovation foundation, stressed the need for startups to understand how a company functions and the hurdles it’ll need to overcome to partner with a startup. The expert knowledge also will help in creating partnerships with companies to aid the efforts. Some corporations may expect the startup to provide marketing and PR. Understanding what you’re trying to achieve can sway a ancillary company to lend a hand.
3) Don’t Sweat the IP
Some startups worry about the theft of intellectual property when partnering with corporations, but it’s a fear largely unfounded. It’s necessary to take the proper legal steps to assure a sound partnership, but Nesta noted “most firms don’t want to steal your idea and, more often than not, the idea itself is a very small part of the finished product.” Nguyen backed that assertion, noting that the idea is worth a lot less than the execution required to build the product. “Grit and velocity often prove to be the real strengths.”
4) Be Patient
It may take time to find a corporate partner. Consider this statistic from Startup Bootcamp: an estimated 48 percent of startups took six months or more to partner with a corporation. According to KPMG, it takes an average of 9.4 months from the first meeting until a collaboration is established. In the interim seek mentors and other partners who can help you enhance what your selling. This can range from PR practitioners and marketers to web designers and others you might meet in a networking opportunity or at a cowork space.
5) Keep Your Options Open
A start-up may specifically target a company with the certainty that it’s the answer to its dreams. However, in the quest for success, alternative routes may emerge. Carter, the man who convinced Publix to carry his barbecue sauce, operates a restaurant in the same county where Publix is located. He longed for his sauce to be carried by the grocery store giant, but that didn’t lead him to pass up on an earlier chance to peddle his sauce through Publix competitor Winn Dixie, which had a special “Winn-Local” program aiming to assist mom-and-pop entrepreneurs, especially women and minorities.
It’s clear collaborative efforts reduce workloads and create shortcuts. Collaboration also leads to innovation, but start-ups must be positioned to find the collaborators and take advantage of the opportunities. With an entrepreneurial community dotted with successful veteran business leaders, as well as a calendar of networking events, Rising Tide Innovation Center is the perfect vehicle to help start-ups find the right collaborative fuel to drive your business.