Publication date: 30.08.23

Reading time: 5 minutes

Why are corporations after startups?

With support from the startup community, the big guys grope for new winning business models that could beef up their corporate ecosystems.

What corporations expect specifically from open innovation may be summed up in the following list:
● improved business metrics;
● access to new technology and niche markets;
● refined value proposition and perfected customer journey;
● streamlined internal business processes;
● lower operation costs.

If both the corporates and startups win, the former can bring home the bacon with the latter lending them their tech savvy for mutually advantageous market hypotheses testing and PR promotion. This is why corporations scout startups all the time.

What is scouting all about?

Big players scout for startups to integrate them, partner for tech development purposes, or invest.
Many corporations set up their own innovation departments to liaise between the startups they have found and their other departments and divisions that have business/tech pains to cure. Project piloting, startup scaling-up and/or investing may also be on the table.

What basic tools do the large companies use to scout for startups?

1. Peer-to-peer networking within their industry. The method is gainful as information colleagues/peers share about startups comes complete with references and expert opinions, which makes partnerships with such startups easier to establish. However, if a corporation seeks a huge pipeline of worthy startups, this is hardly a way of getting one.

2. Partnerships with VCs, academia, and focused government agencies. If a corporation teams up with any of these players, startups the corporate scouts bring on board are a sure bet to make their day. Apart from simply providing feedback on startups, such partners are innovation savvy enough to suggest unorthodox solutions and ideas the corporation barely considered looking for from the outset. Government agencies are the most eager partners for corporate scouts as helping SMEs and tech newbies is what they have been made for.

3. Events, including pitch sessions and various conferences. The tool is time-consuming, and there’s no guarantee that the startups you have met at an event will make a go of the business. However, such venues are great spots to fruitfully network with industry peers (see above).

4. Posting in the social media and media announcements. In numerous exchanges with Innotechnics corporates voted this tool down as obsolete and barely yielding as scouts typically have to deal with tons of silly responses from irrelevant startups as a result. That said, some social media channels may make a splash – at times.

5. Googling. The tool is cost-effective, but it takes a lot of sweat. To find good startups, Googlers have to hand-pick and scrutinize each startup – a kind of toil that surely tires a scout out to complete exhaustion and makes it next to impossible to put together a real pipeline of suitable teams through inevitable lack of concentration.

6. Tapping neural networks. The buzz ChatGPT is one, a simple and quick-witted helper – unless you screw up with formulating questions. If you do, you may end up getting snowed under tons of misleading data that might take a lifetime to verify.

7. Browsing accelerator and hackathon websites. This has been proven to be a grueling way of scouting as each time you sit down to look for new sources, you have to update the already tapped ones. You will also have to beat the bushes for mountains of supplementary data, as all the websites usually disclose is a name and – if you’re lucky – brief description.

8. Launching a corporate accelerator. Acceleration programs may help corporate scouts identify most interesting projects and see if the solutions plug in well enough in the infrastructure to make good as an asset. However, the tool is a money guzzler, takes time to break even, and as regards prospects for good pilots or scaling with quality startups, its cost-to-success ratio is typically low.
There are many scouting methods, as you can see, and all have their downsides that sometimes make managers question the value of the time and money they’ve invested in the effort.

There’s one more tool that Innotechnics believes can cancel out much of the trouble associated with the conventional methods. It is focused scouting platforms.

How focused scouting platforms can help you win?

What makes such platforms worth tapping:

1. Search speed. With the databases, you can get a pipeline of suitable startups fast and slickly.

2. Contact information available. Focused scouting platforms provide startup contact info for corporate users to be able to approach their best picks right out of the gate. Some platforms even offer “matchmaking” services to ease corporate efforts.

3. Cost-effectiveness. The platforms do all the grunt work and long-/short-list the right startups for a corporate user at a reasonable price.

4. Access to a huge pool of startups. Focused platforms draw on sizable startup DBs that go beyond simply offering startup names and locations; they also collect data on startups’ tech verticals, stage of development, TRLs, prior investments, and other parameters that help corporates pinpoint the best of the best.

5. Expert appraisals. Such platforms often recruit help from industry pros who could advise corporate scouts on startups that appear fit for work.

Such platforms are built around a huge startup knowledge base. Their DBs amass insightful data and provide an array of filters and expert appraisals for users to be able to effortlessly find startups they need. On top of that, these platforms are smart and can find and long-/short-list startups for you all on their own – all you need to do is accurately and unambiguously ask them to.

If you elect to give Innotechnics a try – go here to register and enjoy a comprehensive and truly detailed database of startups with free basic functionality and 10 filters, which covers 60,000 teams in more than 15 countries.