According to a Boston Consulting Group (BCG) study, 95% of startups wish to develop long-term partnerships with corporations. Recent Bain & Company data shows that a relationship with a large company positively impacts the growth of young companies in 93% of cases.
A 2016 MassChallenge & Imaginatik report revealed that 82% of large companies now view interactions with startups as important, and 23% say it is "mission critical" to their business.
Corporations working with startups isn't new. It's just becoming increasingly more critical. As the earlier referenced MassChallenge report noted, "Connections between startups and corporations have never been more important...it is shaping up to be a startup's most powerful growth hack."
But that doesn't mean those connections are easy. At their core, startups and corporations are very different and always will be. Unfortunately many approach it with the same well-worn strategy.
Almost 99% of startups in the MassChallenge survey said working with corporations is important; yet 50% said their experience working large organizations was mediocre to worse.
None of this research is surprising. The benefits to startup and enterprise interactions are clear but so are the barriers. Former entrepreneur and current Stanford and UC Berkeley professor Steve Blank recently addressed this in his blog post "Why Companies Are Not Startups." A truth from the piece: "Companies looking to be innovative face a conundrum: Every policy and procedure that makes them efficient execution machines stifles innovation."
I've seen this time and again. Often I'm asked why, as a three-time entreprenuer, are you still at Oracle? The answer is I'm seeing Oracle tackle the conundrum above. Pockets of innovation efforts happening all across the company are refueling my entrepreneurial spirit and passion.
A Next-Generation Acceleration Initative
Which brings me back to Oracle's approach to investing in startups. The typical industry method has been fairly standard: Companies take an equity stake in exchange for corporate resources, co-working space, mentoring and guidance. Oracle is taking a different approach: A pay-it-forward model where we don't take equity but do create an ecosystem of co-development and co-innovation across startups, our global customers, and Oracle—where we can all win.
The Oracle Startup Cloud Accelerator is a next-generation acceleration initiative for startups that delivers true peer-to-peer interactions and collaboration. It's about reimagining the startup and enterprise relationship.
According to Bain & Company, the most common top priority for startups is funding: 80% of the startups surveyed rank it among their top three needs. But it is far from their only need. Startups increasingly report the need for help with market and customer access (61%), technical expertise (39%), and business expertise and knowledge (26%).
In all three of my startups, garnering reference customers and revenue was my biggest challenge even before funding. Funding can be found. It's delivering on that customer and market access, as well as technical and business expertise, which will grow in importance to startups. That's why its Oracle's focus.
Rethinking the Startup & Enterprise Relationship
I'm an entrepreneur at heart, with three successful startup exits. But I've also been an executive in large organizations. That blend of startup and enterprise experience allows me to take advantage of learnings from both sides and apply it to Oracle's global startup initiatives. Approaching this program with a startup mentality, as well as an understanding of corporates is key. In fact, almost every member of my team has both enterprise and startup experience. That dynamic is crucial for our program's success.
Our team is like a startup within Oracle. And Oracle is giving us the support and leeway to move fast, test, iterate and learn so we can create a successful and unique global startup program that will spur new thinking and partnerships. To quote LinkedIn founder Reid Hoffman, our team employs a mindset of "permanent beta." We have a strategic plan…but we are constantly learning, iterating and evolving.
Creating an ecosystem of co-development and co-innovation across startups, our global customers, and Oracle is a tall task. One that other corporates have promised but failed to deliver. It's also even harder to scale. It's why we are developing highly functioning ecosystems, focused on smaller, peer-to-peer interactions, where collaboration can truly thrive. And we are already seeing results:
"We've been very impressed since we started working with the Oracle Cloud team—their responsiveness, agility and make-it-happen attitude is brilliant. We're beginning to revolutionize the on-demand computer market for power hungry rendering applications." -Gareth Williams, YellowDog CEO, Oracle startup partner
"Working with Oracle gives us access to a different type of wide network, both with Oracle's global resources and its customer base, which gives us a global reach we would not otherwise have." -Becky Sage, Interactive Scientific, CEO, Oracle startup partner"Oracle provides a gateway to customers – they have large scale customers from all over the world and now we have exposure to that by virtue of our relationship to Oracle." –Tim Kindberg, CEO, Vorb, Oracle startup partner
The next five to ten years promise revolutionary changes that will transform entire industries and create new technology frontiers—from healthcare to education to government and beyond—and it will require partnerships that spur and support collaboration and innovation ecosystems. Startup ingenuity coupled with enterprise expertise will be a necessity.
We are already seeing real progress by engaging our startup partners with our product development teams and global customers. There are exciting technologies emerging, pain-points being solved, and advancements happening across all sectors. And we've only scratched the surface. As an entrepreneur at my core, and one who believes that startups are at the heart of innovation, I'm very bullish about our global startup program, and incredibly humbled about leading it.