Blossoming relationships between start-ups and enterprises

Chris McCullough looks at the potential that start-up and enterprise relationships have, and how the two should work together.

Something interesting is happening with the dynamic of business partnerships. While it’s a familiar rule for the big kids on the playground to play together, the past few years have seen more mix and matching. Established companies with experience, sturdy infrastructures, heritage and a solid reputation are turning their sights to nimble new businesses with maverick ways of thinking and operating.

So do opposites really attract?

Partnerships between start-ups and large enterprises are surprisingly natural. Start-ups have the ability to adapt to set ways, and enterprises have the funds to turn the most innovative ideas into reality. Whilst both parties need to remember that there will be cultural, financial and social differences, the fact that large companies are so robust whilst start-ups tend to colour outside the lines can be an incredible asset.

There are potential downsides, too, of course. The ‘new vogue’ is for businesses to innovate like start-ups, but often the sheer size of an organisation (and the resulting implications) makes this difficult. Start-up incubators and accelerators – organisations, or branches of organisations, dedicated to helping start-up companies develop by providing them with training, office space, and/or funding – have as a result been growing in popularity. Whilst start-ups inject fresh air and innovation into traditional businesses, the start-up-to-multinational relationship needs more than a temporary offer of advice, space and/or money to succeed.

Part of the reason why incubators have been popping up across the country is because, whilst large organisations are intrigued and attracted to start-ups, they still pose a significant risk. Enterprises view the step from ‘somewhat invested, but definitely curious, friend-with-benefits’ to ‘long-term committed partner’ as a significant one, and as with all relationships that’s understandable. Young companies often have little security, and the financial threat is real. Without an established brand, all a business has is its product and team. Enterprises are backed by a reputation, a heritage, and years and years of experience. But to a certain extent, this is exactly what defines and brings out the best in a start-up.

‘Try-hard’ is part of start-up entity

When we first started working with O2, it was an opportunity 15 times larger than our then biggest client. Our team, though passionate and determined, consisted only of three people. And yet within six months, our team had expanded, refined our product-market fit and ultimately saved O2 £2.5 million through better scheduling. What’s more, 96 per cent of O2 staff rated RotaGeek good to excellent. But the relationship began with trust; we needed to build trust and credibility with O2. Openness and honesty enabled a real partnership to develop and, on top of this, we meticulously planned and worked incredibly hard to over-deliver. Our company was extremely eager to create something the client couldn’t live without, and in a way that is what has defined our strategy to date. Because after all, delivery, execution and our idea are all we had to build on. Eventually, after making this our company’s philosophy for years, it became integral.

Start-ups that grow to become successful and significant players in a market will always have this innate characteristic of entrepreneurialism and eagerness about them, because as they tried to break into an industry that was the one weapon they had.

Today we deliver uptime guarantees in excess of many mission-critical software systems and the average time to answer a support request is three minutes, and this despite growing four-fold year-on-year. We have an incredibly individualised approach to every client or partner and this fits around enterprise infrastructure and workflows perfectly. This approach also allows a much more effective working relationship with clients. In a particularly tricky negotiation, a misunderstanding led to some tension between us and a client. So I showed up at the next meeting with chocolates and flowers, a recognition that we had screwed up early in the relationship. We got the relationship back on track and the partnership continues to this day.

Start-up agility and adaptability makes this group of businesses able to work around set ways to best apply their product to a set system. Tech start-ups are used to doing this – after all, they are rarely creating new industries. They are more often coming up with better ways for existing industries to operate. And one thing that enterprises need to realise is that this type of relationship, where one partner is able to adapt and build around existing processes, should not come with ownership or leveraged power. It is crucial that partnerships remain balanced and fair interactions, and never monopolised on either side. After all, there is a reason why industries are seeing such outstanding innovation from entrepreneurs who left enterprises to create something new, ambitious and undistracted by enterprise restraint.

Start-ups need funds, and challenges

While it may seem needless to say why start-ups need enterprises, there’s an important point to be made here, too. Of course, the financial aspect is a significant one, as is the fact that enterprises can act as truly valuable points of reference to potential investors and clients. But there are so many things start-ups can learn from enterprises. The professionalism, size and structure of large businesses sets new goals for start-ups, it stretches their capabilities and is absolutely integral to product development. The majority of start-ups today are centred on solving old questions with new solutions – and this can only be done through continuously and collaboratively tackling these challenges that industries face.

All industries need to see more collaborative and committed partnerships between enterprises and start-ups if they want to see technology and entrepreneurialism empower business, society and governments.

Conversation and reciprocity, as well as the awareness that both parties benefit, are the building blocks to achieve this.

Chris McCullough is CEO and co-founder of RotaGeek.

Further reading on enterprises

Ben Lobel

Ben Lobel

Ben Lobel was the editor of from 2010 to 2018. He specialises in writing for start-up and scale-up companies in the areas of finance, marketing and HR.

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