Why corporates and startups are better together
Here at Luminous, we proudly work with both international corporates and startups. In fact, we’ve seen that these businesses often do best when they work together.
Corporate accelerators and incubators are becoming increasingly common, especially in the tech sector. We’ve worked with many a tech startup that began life in the incubator of a global corporate. But what exactly are incubators and accelerators? And how can they benefit both corporates and startups? Let’s take a closer look…
Incubators: not just for babies
A business incubator is an organisation that exists to support startups, by providing them with services like office space or business management advice. It’s a bit like a greenhouse – it provides the optimum conditions for a startup to grow and develop.
Typically, an incubator provides services that a startup may not be able to provide for themselves. Each incubator may provide different services, but will likely include help with things like marketing, compliance, technology, networking, education, and presentation skills.
While there’s not usually a limit on the amount of time a startup can spend at an incubator, accelerators are a little different. Generally, a business will be offered a space at an accelerator for a predetermined length of time – often several months. During this time, startups will work with mentors to develop their business quickly – their growth is ‘accelerated’. Businesses have to apply for places at accelerators, which are often hotly competitive.
While incubators are often associated with non-profits, or are run as businesses in their own right, it is accelerators that are more typically associated with larger corporates. For example, TechStars, Microsoft Accelerator, Red Bull Amplifier, and Wayra by Telefonica. That’s not to say that incubators are any less valuable, though. For businesses that are not ready to scale quickly, they provide a better long-term solution. We’ve worked with businesses based in a number of these spaces in the past, including TechHub (co-founded by the editor of TechCrunch), The Imperial College Incubator, Level39, and Innovation Martlesham. There’s an exception to every rule, though: Barclays’ Eagle Labs is often featured as an incubator, despite being backed by one of the UK’s largest banking corporations.
What’s the point?
On the face of it, Corporates and startups don’t have a lot in common – what could they gain from working together? Quite a lot, it seems.
Perhaps the biggest asset to a startup is its smaller size: they are usually leaner and more agile than large corporates. This means they are able to be more innovative, and come up with creative solutions quickly. Large corporations, on the other hand, can typically be weighed down with bureaucracy. They may have talented teams and larger budgets, but it’s much more challenging, not to mention time and labour intensive, to kickstart these large corporate machines into action.
By working with startups, corporates get access to the fresh thinking and cutting-edge ideas they simply couldn’t harvest easily in-house. It provides them with innovative new solutions to industry problems that they can apply to their own businesses, allowing them to stay ahead of their competitors.
It’s not just the corporates that benefit, either. For startups with a B2B offering, a large corporation could be their dream client. These tend to promise long-term contracts, of significantly higher value – a guaranteed income that would be invaluable for a startup looking to scale. Working closely with a corporate in their incubator or accelerator scheme could allow startups an ‘in’ with a corporation they wouldn’t usually get to work with. Not to mention the business support up for grabs during these schemes. Startups gain easier access to funding and mentoring, as well as the opportunity to pick the brains of those at the top of some massive corporations.
Clearly, any scheme that puts startups and corporates in closer proximity to each other is a great arrangement for all involved.
While the majority of these incubators and accelerators are based in London, we’re heartened to see more pop up across the UK. In fact, some organisations are dedicated to opening accelerators and incubators across the country. TechHub has facilities in London and Swansea, as well as Bangalore and Bucharest, while Barclays have six Eagle Lab Incubators across the UK, and four Maker Spaces. We’re particularly excited to see a Maker Space launch in Norwich – a city with a soft spot in our hearts.
Maker Spaces provide startups with access to creative technology they wouldn’t usually get to use – the Norwich Maker Space is kitted out with a 3D printer, laser cutter, vinyl cutter, and a whole host of other creative kit. We can’t wait to have a go and get stuck in!
Follow us on Instagram for the first look at any Luminous creations from the Norwich Maker Space!