Startups are created because there is certain opportunity to be seized.
In the case of technology startups it is because some market, industry or process is ready to be distributed. Distribution can mean improving a process or a product and it mainly comes back to the same factor – innovation.
This innovation is channeled because the entrepreneur wants to solve a problem they have recognised and even experienced themselves.
It takes a lot of time, work and sweat to come from the idea of the innovation to the actual product. But once reached, this product can disrupt a specific company that never knew it was at risk.
Most companies used to feel a level of comfort and the lack of internal innovation is a big risk for a traditional business. One of the most known cases of all times is Nokia. Nokia was the leader in mobile phones for the longest of all times and they felt comfortable. This comfort and lack of internal innovation allowed a huge opportunity for distribution.
When Apple launched the first iPhone in 2007 it has disrupted the whole mobile industry. At that point, Nokia was still dominant be the reason they were not able to keep up was the lack of agility.
It is these two factors that cause a company to be fully distributed by innovation:
- Lack of internal innovation
- Lack of agility to react to the market innovation
Companies worldwide have now realised this and are actively seeking partnership with startups because they understand that it is the startups in their space that creates the innovation and disruption. They much rather be part of it from the beginning and actually utilise it then being hurt by it.
This crucial partnership between corporates and startups is still very uncommon in the Middle East.
Corporates are hesitant to it as they do not know it but also many times they do not realise that it is required.
Through my last three years of running SnappCard, I have experienced many cases where corporates are not interested in the partnership with us due to many reasons. The most common is that they do not feel they need to partner with startups. They think they could create something of their own by investing a lot of money in it. Even if they have the necessary resources to create something of their own – they do not have the long term vision. They do not understand that a startup will always be innovating, will always be improving and will always be more agile. Furthermore they never see the full scope of products like ours.
In our case we were able to convince some of them that is more beneficial, effective and cheaper to work with us but most of the time they committed to the decision that they will create something of their own. Now, after quite some times, they reach out back to us and in many cases they have burned a lot of many already and realised down the road that it is actually more beneficial to partner with us.
Corporates in our region have to understand that working with startups is not only support the startups but more importantly helps them to stay above the curve and therefore survive in a competitive world.
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