Tips on How to Make Corporate-Start-up Partnerships Work
With good communication, openness, and adaptability, there’s space in the corporate pond for the big fish and the little fish
PHOTO CREDIT: Getty Images
There’s value in working with people from diverse backgrounds. And when it comes to tackling significant business challenges, corporations are finding that teaming up with start-ups can be a good idea.
Take the case of consumer goods giant Unilever and Singapore-grown start-up Next Billion.
Says Barbara Guerpillon, the Southeast Asia and Australia head of the corporation's innovation platform, Unilever Foundry, “You have on one side big brands and expertise in marketing, and, on the other side, start-ups who are agile, who have the latest technology, and who can move very quickly. So, individually, they are interesting, but if you put them together, amazing things can happen.”
Oliver Gilbert, Next Billion’s managing director, says one challenge corporates face is reaching rural communities in emerging markets, where 1.2 billion new consumers are expected to move out of subsistence poverty by 2020 and, for the first time, have disposable incomes of over US$5,000.
This is where the aptly named Next Billion comes in. It is a for-profit, social enterprise that builds technology and data platforms to help companies understand and engage these consumers, says Gilbert. The company is a subsidiary of Newton Circus, a technology and social enterprise builder based in Singapore.
Through its venture, Mobile Movies, Next Billion bridges entertainment, education, marketing, and market research by equipping local micro-entrepreneurs with portable cinema kits. These micro-entrepreneurs, acting as Next Billion agents, organize pop-up cinemas for the community and use these gatherings as an opportunity to screen educational content from NGOs or commercials for relevant brands, conduct live demonstrations on proper hygiene, distribute product samples, or collect input from the community, says Gilbert.
Next Billion's first pilot program was with Unilever brands Lifebuoy and Pepsodent in Bangladesh in 2013. According to company data, the program helped increase hygiene awareness in the community and was found to have been 40% more cost-effective than alternative marketing options such as flyer distribution or hiring activation agencies.
Gilbert clarifies that they want to make sure that the brands they work with also value social impact. “For example, when we're working with local sanitation non-profits in rural Myanmar, Indonesia, or Vietnam, it's easy to work with [these brands] because hand washing and oral care are so closely aligned with sanitation needs. Likewise, we work with several food partners where, by delivering great nutrition education, there’s been a clear alignment with nutritious products or consumer healthcare products,” he says.
Currently, Next Billion is working with Unilever on projects in Bangladesh, Myanmar, Philippines, and Thailand. For 2018, it is partnering with Unilever Foundry to scale its business and work with over 50 of the company’s brands.
Making the partnership work
Of course, as much as diversity can fuel innovation, it also introduces some challenges.
To make sure the working relationship remained smooth, Gilbert says it was important to communicate effectively, to set up clear practices, and to be adaptable and open-minded.
Because corporations and start-ups may differ in terms of pace and their very definitions of scale and success, clear communication is a must.
Says Guerpillon, “We realize very often that start-ups may not understand how scalable a solution needs to be [in order] to be useful to Unilever. [We] are the world's second-biggest advertiser, we have two billion people using our products every day in the world, [so] when we talk about scale, it’s really massive. And, sometimes, start-ups struggle to envision that scale.” She says this is where clear communication is vital.
Gilbert says they had to learn how to best match their KPIs with that of Unilever’s and figure out how to best align their goals. He says that the two companies share the same vision of “creating sustainable commercial and social impact,” and it's typically in the tactical side of things — timelines, areas of interest, etc. — where gaps may exist.
Define clear practices
The novelty of the solution also meant that there was no clear path ahead. Says Oliver, “Building new things with new partners in any context always typically means that you don't have a standard roadmap, and this is especially true for our line of services, which is tech-enabled activation and data in rural emerging markets.”
As such, it was important to set up clearly defined practices for execution, growth, and progress. “Clearly define what progress means, and set up a process for achieving it. It was always helpful to plan out the complex details when we're starting out a new project,” says Gilbert.
Be responsive, adaptable, and open-minded
Gilbert also stresses the importance of listening well and keeping an open mind when it comes to dealing with the different brands they’re working with.
He says, “No two brands and no two companies have the same interests in the exact same markets, which is why it's really important to be dynamic, responsive, and open-minded.”
For Guerpillon “Yes, there is an element of risk [when working with entrepreneurs and new technologies], but it's a controlled element.”