Corporate-startup partnerships, where are we at in MENA? [Report]

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89 percent of large corporations and 94 percent of startups see value in partnering together. [Tweet this]

This is one of many findings from a report published today by Expo 2020 Dubai and Wamda that looks at the status of corporate-startup engagement in the region.

The research draws on data and insights collected from interviews with 130 corporate executives and stakeholders in MENA’s entrepreneurship ecosystem, a benchmark of 300 corporations, and a survey of 758 entrepreneurs in MENA.

The report finds that while there is a large appetite for collaboration, corporations and startups are not aligned when it comes to the value they’re hoping to extract from their engagement. Corporations are primarily looking to work with startups for CSR-purposes (50 percent), but startups are seeking resources to help them grow their business, such as funding (58 percent), new products/technology (55 percent), and new clients (43 percent).

Download the full report here.

Current status

Almost half of large corporations operating in MENA have launched formal programmes to work with startups. [Tweet this] These take on the form of mentorship, sponsorship of events/content, co-development of new products, incubators, accelerators or venture capital funding.

Eighty-two percent of the 11 corporate-venture capital funds operating in the region were launched in the last six years. [Tweet this]

At a high level, these trends in collaborative entrepreneurship (CE) seem promising, but a deeper dive into the initiatives demonstrates that more can be done.

Interviews with corporate executives revealed that even though half of corporations are working with startups, 45 percent are doing so for CSR purposes. [Tweet this]

While strategic engagement (14 percent), like co-developing, incubating/accelerating or investing in startups is evolving, it remains a relatively nascent practice. [Tweet this]

Overcoming barriers

Although CE has great potential impact for corporations and startups, it’s not without its risks. Those entrepreneurs surveyed point to long sales cycles (52 percent), long payment cycles (39 percent), and a clash of corporate-startup cultures (28 percent) as the greatest risks they see to partnering with corporations.

On the flip side, 58 percent of the executives interviewed said that the biggest risk to working with startups is their high probability of failure.

The report suggests that corporations and startups can mitigate these risks through the following:

Corporations should set their CE objective and ensure internal readiness - interviews with corporations and leading entrepreneurship experts uncovered that corporations should define the purpose of these partnerships, align them with their overall strategy, and outline how they will contribute to their long-term corporate goals.

Moreover, internal culture is key. Executives should make sure that their team, budget and outreach strategy are prepared to begin and maintain collaboration.

Startups should understand their competitive advantage, and be flexible - based on the risks corporations identified, startups should craft a clear value proposition, comprehensive and commercially viable solution to potential corporate partners. Moreover, CE requires dedicated resources, preparation and careful implementation, which can accrue both financial and time costs for a young company as it synchronizes with a corporation’s needs.

Download the full report here.

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