Why early-stage startups should consider securing a corporate partnership
etting a product off the ground can be a complex challenge for startups. That’s why securing a corporate partnership in the early stages can be helpful to kickstart your business idea, according to Bernhard Schambeck, head of BMW Startup Garage.
“A startup may have a functioning prototype, be well financed by a VC or have good support from an accelerator, but they may lack an industry-leading client to make this idea market-ready,” says Bernhard, who facilitates cooperation with startups to maximize the innovation power of the BMW Group.
It is essential for startups in the early stages “to get feedback from the final customer in order to make their idea market-ready and scalable within the industry.”
BMW Startup Garage is the Venture Client Unit of the BMW Group that works with startups through a client–supplier relationship. The four-month program offers startups an introduction to BMW’s key processes and links them up with key decision makers within the wider BMW Group.
Selected startups have the opportunity to become BMW suppliers and work alongside the relevant BMW departments to validate their solution within a pilot project.
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Startups must be extremely clear on what problem they aim to solve in their chosen industry.
Bernhard stresses the importance of a broad network for early-stage startups. “Our program enables startups to speak to BMW experts and engineers and get first-hand guidance from the BMW experts who are using their technology.”
When it comes to approaching a partnership with a corporate company, Bernhard says that there are a number of key things to consider. Startups should be able to demonstrate a well-developed concept behind their product and a long-term vision of how it can scale.
That’s why BMW Startup Garage recommends that startups enter an accelerator program first in order to build their idea, business model and company up to a level that’s acceptable for a venture client program.
“We need something we can invest in, either a functional prototype or a product of your innovative solution,” he says. “Having a vague idea on paper is not enough.”
Moreover, for startups seeking to maximize their chances of being selected for a partnership with a corporate, having a clearly defined focus and USP is also essential. Bernhard says that “startups must be extremely clear on what problem they aim to solve in their chosen industry” and be able to communicate it effectively.
To differentiate yourself from your competitors, Bernhard recommends learning about the other players in the market. “Startups should begin by asking themselves, Who are my competitors? What is their IP? And how do I stand out against them? Being able to answer these questions is fundamental to making yourself attractive to a corporate company.”
While there are abundant ways in which startups can present themselves as an attractive partner to a corporate, it’s also important to select the right company to work with. “It’s wise to team up with somebody who is known as an industry leader and who can offer tailored support,” Bernhard says.
Ultimately, startups should choose the company best positioned to help them make their product market-ready and, further down the line, scalable.
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Once startups have been selected for a corporate partnership, it’s imperative that a relationship of trust is built, and right from the outset.
“When picking a startup to work with, corporates can often be concerned about the ability and commitment of the startup to deliver on time and in the expected quality,” says Bernhard. “It’s crucial for a startup to prove to a corporate that they can reach their expectations.”
In the case of BMW Startup Garage, startups should aim to overachieve project goals in order to establish themselves as a trusted vendor.
BMW Startup Garage aims to create lasting relationships with the startups they work with by continuing to provide support even after the startup has completed the program.
"Startups who have passed into the next project phase within BMW can always reach out to us if they need help or answers to questions,” says Bernhard. “We like to keep our doors open."
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Main photo of BMW Startup Garage by Startup Guide