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Startup and corporate co-innovation: The pros and cons

Tech City News and Cisco event

Partnering with large corporates can be of great benefit to tech startups, according to Chris Wallis, co-founder of Intruder.io.

Speaking at an event, hosted by Tech City News in collaboration with Cisco, Wallis explained how his cybersecurity startup had benefited from accelerator programmes in the past.

“[By partnering with corporates] you get recognition. If you can say that a company believes in you, that gives you credibility, the kind that might just get your foot in the door,” he added.

Help with scaling and distribution

The panel discussion, moderated by Tech City News’ editor Emily Spaven, featured Tom Kneen, head of business development – British Innovation Gateway at Cisco; Siddharth Bannerjee, policy researcher/analyst, digital startups at Nesta; Ben Kott, CEO and founder of Energy Deck; and Simon Calver, a partner at BGF Ventures.

Kott, whose startup is based at IDEALondon – a post accelerator run by Cisco, DC Thomson and UCL –  echoed Wallis’ thoughts, noting how partnering with bigger firms, can help smaller tech companies succeed.

“We’ve been going for five years. The biggest reason [for partnering] for me is being able to achieve distribution,” said Kott, adding: “How do you get into the market and scale? Working with Cisco has been amazing for us.”

Bannerjee agreed, adding that partnering with corporates would also give startups visibility and publicity whilst enabling them to access new markets.

Forging the right partnership

Calver spoke about the need for startups to do their research before embarking on any kind of partnership with corporate firms.

“First of all, tech startups should understand the objectives of the corporate and why they’re willing to get involved,” said Calver.

“Do not cede control [to the corporate],” he advised. “If you do partner with a corporate firm, think about your commercial relationship [with them] first,” added Calver.

Kneen spoke about Cisco’s relationship with tech startups and the kind of criteria that is used to establish a formal partnership with them.

“We like to have a triangle which includes us [Cisco], our customers and the startup,” said Kneen, adding: “Is a startup going to broaden our solutions to our customers without overlapping too much with what we do?”

According to Kneen, this is something that needs to be mapped out from the onset, without interfering with the natural evolution of each startup.

Value added and timing

“Not all accelerators are equal,” said Calver as he urged tech entrepreneurs to think about the added value they could get from each one, depending on what stage of development they were at.

With this in mind, Kott encouraged those in the room to “look at the terms sheet” before making a decision to partner with a larger firm.

Bannerjee agreed, encouraging people in the tech sector to evaluate all the options available to them, whilst highlighting the need for entrepreneurs to get legal help early on and to avoid cutting corners, as this would have a negative impact in the long run.

Gaining a mentor’s support, Bannerjee added, is also useful but these kind of relationships should be approached cautiously. “Find out whether the mentor is really willing to lend their help or if they’re after equity.”

Finally, Wallis warned tech entrepreneurs against the dangers of over-committing when their startup is in the early stages. “Taking part in a corporate accelerator programme takes up a lot of your time. They are a massive time commitment.”

If you can’t commit the time, don’t do it, concluded Wallis.