By Shameen Prashantham and Anoop Madhok

Startups and large corporations have a lot to offer one another, leading both types of company to seek out mutually beneficial partnerships where each side successfully leverages the strengths of the other. However, this is hardly a partnership of equals; the startup must recognise that it is the smaller, more junior contributor allied to a larger, more multifaceted organisation with greater constraints on its time and resources.

For startups, securing the ongoing attention of their corporate backers is often as important as maintaining their trust. Accessing the larger corporation’s reach and resources all begins with this critical step; without gaining and holding their attention, startups cannot expect to enjoy a lasting, meaningful partnership.

Turning not one, but two heads – Corporate and Divisional managers

When it comes to attracting, securing and maintaining the attention of their corporate backer, startups have a two-stage race to run. Not only must they turn the heads of the corporate managers tasked with running the startup partnering initiative, they also have to sustain the attention of divisional managers in business units (BUs) with whom actual commercial joint activity is forged.

To make matters more difficult, it’s essential for startups to realise that these two sets of managers have different priorities that result in distinct differences in how they pay attention to startups’ actions.

From our research, we found that startups’ success (or lack thereof) to gain the attention of one or both sets of managers can be broadly characterised in the following three ways:

Hares start out strong, successfully attracting attention from corporate managers running the partnership, but then fail to secure attention from divisional managers in BUs. Ultimately, they fall short of the goal of developing a go-to-market strategy with support from the corporation.

Tortoises experience a relatively slow start in terms of attracting corporate headquarters’ attention, but subsequently attract divisional managers’ attention and attain their original goal.

Finally, non-starters are startups who failed to build any momentum, from start to finish, with either corporate or divisional managers, leading to the partnership’s failure and their withdrawal from the partnership.

Overall, the better long-term outcomes of the tortoise startups demonstrate that attracting attention to “mundane” commercial aspects ultimately matters more than “cool” showcasing. In other words, it’s more important for the startup to tangibly demonstrate how it can positively impact the priorities of BUs than to merely present an eye-catching initial concept to corporate managers – though this is also important for securing attention initially.

Rules of the game – How startups attract and retain attention from their corporate partners

In our study of eight startups participating in an elite 12-month startup partnering initiative led by “Gorilla” (a globally renowned software corporation), we found that there were several noticeable trends in the experiences of the hares, tortoises and non-starters, trends that translate into the following “rules of the game”.

Rule 1: Showcaseability: Attention is a quasi-zero sum game; gaining more attention for your startup likely means the corporate partner has less attention for its other prospective startup collaborators, and vice versa. Accordingly, the early period of the startup/corporation relationship is crucial for the startup to attract the attention of the corporate manager through showcaseability – the perceived promise stemming from endorsements from external parties (such as venture capitalists or industry associations). In our study, the three “hares” all attracted the attention of Gorilla early on, leading to increased visibility, networking opportunities and overt endorsements on social media and with interested third parties, among other benefits and resources. By contrast, the “tortoises” failed to grab this early attention and had a slow start as a result with little to show for the partnership in the early months.

Rule 2: Commitment: Beyond surface-level endorsement, startups that want to achieve a deeper partnership and successfully forge a go-to-market pathway – with their backer’s help – need to engage more substantively with the relevant BUs and the division managers who run them. This entails working to a different set of priorities, namely showing commitment to the partnership’s objectives. In our study, the experience was flipped in this instance – the tortoises pivoted to align their initiatives with the agendas of their divisional manager counterparts, even prioritising this over their own, thereby attracting the necessary attention. By contrast, the hares stuck more rigidly to their own agenda, and found that the early attention from the corporate managers did not automatically translate into attention from divisional (BU) managers.

Playing the long game – Commitment wins out over time

These experiences demonstrate that while a startup’s showcaseability is important – especially in the early stage of the relationship with its corporate partner – the attention that it brings is simply a signal from the corporation that it recognises the potential of the startup. Demonstrating commitment, however, is essential as it allows for the realisation of that potential. In our study, the tortoises could afford to fail in the first stage of the race, and despite the resultant lack of early attention, their continued efforts to understand and align with Gorilla’s objectives kept their corporate backers involved and ultimately interested in helping them.

So, is it better to be aggressive or humble? In a sense, it’s both – but aggression without humility will likely lead to the experience of the hare, rather than the tortoise that ultimately wins. This is because, in the end, it is a high level of attention from divisional managers that ‘does the trick’ – i.e., achieves the potential of the partnership. Accordingly, startups seeking to extract value from partnering with large corporations need to thoughtfully manage the distinct attentional demands of both corporate and divisional managers. However, they must also refrain from being too self-absorbed in their own priorities and be willing to overtly demonstrate their commitment to those of their partner.

This article is based on a paper entitled “Corporate-Startup Partnering: Exploring Attention Dynamics in Asymmetric Settings” published in the Strategic Entrepreneurship Journal here.

Shameen Prashantham is a Professor of International Business and Strategy and Associate Dean of MBA at CEIBS. Anoop Madhok is Scotiabank Chair in International Business & Entrepreneurship and Professor of Strategy at Schulich School of Business, York University.