How not to partner with startups
This book is written, in large part, to settle a misunderstanding. Tech startups are so alluring these days that everybody thinks they should be a founder, that they need to obsess about startups, and live and breathe technology. Far from it; in truth, many of us would be better off simply adapting the tech innovator’s mindset and building an organizational repertoire that mimics, courts, and most importantly, deeply understands founders and everything that they do, including their frequent failures.
The good news is, this is very doable. As the evidence collected through interacting with thousands of founders, academics, policy makers, and executives will show, the tech entrepreneur’s mindset includes seven key behaviors that anyone can master: being focused, relentless, decisive, reliable, direct, vulnerable, and adaptive. Why is it so rare? Perhaps because we are not talking about teaching this to individuals but teaching them to teams and organizations as a whole. You don’t need a degree in sociology to know that the complexity grows more than n+1 with each new individual added to the mix. But exactly how does that work? And, what about other factors, such as technologies? Innovation is sociotechnical in nature, and requires full awareness of how social and technical aspects interact.
In fact, these innovation attributes are more than traits, behaviors, or “muscles” you can train in isolation. What you need to do, as an innovation leader, is to develop life habits and hone them, and inspire others to practice them. Over time, these “instincts” become commonplace, and you set yourself up for gleaning the kind of everyday insight and social sensitivity needed to detect and utilize possibilities in tech and apply them to your own life, work, and projects. Don’t just train your body; train your mind. Practice behavior that just might lead to innovation. Be in the places where innovation occurs.
Top MIT faculty who find themselves as serial founders of tech companies exhibit these traits but exercise a restraint: they typically let their students or experienced CEOs run with their companies and continue to innovate exactly as before. Nobody thinks any less of them.
Silence is bad for corporate–startup collaboration
There was no easy way to say it. Despite everyone’s best efforts, the startup venture’s efforts to get a trial contract with the large multinational corporation had failed. At least, that was going to be my message to them. We had tried everything. As the lead of the MIT Startup Exchange program, I had introduced them and then reintroduced them to the innovation scout. Andy, the founder, had then met with them. He had introduced them to several corporate business units. There had been several follow-up calls and emails, even two corporate visits with extensive demos and long dinners. Then, silence. Not the kind of silence that happens before a big transaction, but complete silence, the kind of absence of communication that only characterizes the worst of marriages gone wrong. The kind that means someone is actively ignoring you. This had gone on for months. In fact, it was approaching the year mark. I was about to call it.
Then, as I was about to conduct the postmortem together with Andy, the startup’s enthusiastic founder, over an unusually good office espresso (thank you Nescafé), an email ticks in, and soon he gets a phone call. It is the corporate innovation scout. He wants the founder on a plane across the world—tomorrow—for a meeting with the CTO. They are contemplating making the startup their preferred partner for artificial intelligence. The deal is consummated within weeks.
With Regina, founder of another MIT startup with a similar product, the story had been different. I had set up the meeting. The large financial services company had met her for an initial 20 minutes, and she had done the typical startup pitch (e.g., point out the customer pain): “Dear old-fashioned prospective customer in the slow-moving financial services sector, here is my clever fintech solution that will save you a lot of headache and will put you ahead of your competitors.” The meeting had stretched to 45 minutes, upon which the Head of Innovation stormed out of the meeting to make a call. I briefly overheard phrases I later understood the meaning of: “Just plan a trip right away.” He had decided to start a pilot collaboration right then and there after only one face-to-face meeting. Was this company outstanding? Perhaps so, but not more outstanding than the one previously mentioned. Were the circumstances different? Yes, they were, because in this case the decision maker was in the meeting. But that does not explain everything. There was also something about the trust between me as the matchmaker and the innovation executive. But there were also other differences that matter. We will unbundle all these kinds of expectations later. Let’s look at a third example, again from MIT’s corridors.
Clark, the innovation scout from the massive aerospace company I was helping to connect to MIT innovation, came over to me at a reception and suddenly said to tell my startups not to sell so much, have them stop pitching, the sale is already done. He was slightly annoyed that one of our startups had proceeded to present their entire slide deck of 30 slides to one of the EVPs in a strategic business unit even though, in Clark’s mind, the decision was already made. “Trond,” he had said, “you made the intro and said this was one of the top companies spun out of MIT with the type of manufacturing technology we have requested. Why is your startup still pitching? For us, the only decision from there would be, how should we structure the project?” I was thrilled. Innovation flow was at play.
Why should an executive never play bait and switch with a startup? Because rumor spreads that there is no follow-up. Such behavior contaminates public reports of that company being innovative. It is also bad manners and it is unhelpful.